Aon Risk Solutions released its 2011 Construction Industry Report, which reflects the input of 60 global construction industry respondents to Aon’s 2011 Global Risk Management Survey. While survey respondents cited senior management’s intuition and experience as the primary method to identify major risks, the report underlines the importance for organizations to embrace an enterprise-wide risk management approach that is optimized on a global basis.
The industry’s top risks as identified by survey respondents are included in the report, with the economic slowdown leading the list. Rounding out the top four risks are increasing competition, damage to reputation/brand and failure to attract or retain top talent. Regulatory/legislative changes and third-party liability tied for the fifth spot.
“In today’s business environment of high supply and limited demand, it has become especially vital for organizations in the construction sector to effectively manage risk,” said Henry Lombardi, executive vice president of Aon Construction Services Group. “Relying exclusively on gut instinct could result in a significant loss as leaders may miss an emerging risk.”
Mary Ann Krautheim, client strategy officer of Aon Construction Services Group, added, “The construction industry is expected to grow by 67 percent by 2020. Business leaders who use an enterprise-wide approach to identifying and assessing risks today will emerge from the economic storm in a stronger position with a larger market share.”
Additional findings of the 2011 Construction Industry Report include:
- Construction companies have invested and committed significant resources to risk control/safety practices to help lower the frequency and severity of loss, and according to the survey, they would like to see recognition of this investment by carriers in the form of lower premiums
- Capacity has been steady over the past three to four years with continued low rates. General liability/third-party liability continues to be a key issue for construction companies, most likely caused by concerns over construction defect claims and court interpretations of insurance coverage available to pay these claims
- Heavy industrial, engineering, procurement and construction contractors continue to enjoy strong backlogs, but are experiencing increased global competition
- While ranked number 11 on the list of top risks, political risk/uncertainties is expected to grow as the construction sector expands into developing countries
- Contractors’ abilities to compete with new project delivery methods, such as public-private partnerships, prove to be a challenge and an opportunity. Many non-U.S. contractors understand the value of bringing equity to the deal. This is a trend expected to continue as public bodies lack resources to invest large sums into infrastructure. BD+C
Related Stories
Green | Nov 13, 2022
NREL report: Using photovoltaic modules with longer lifetimes is a better option than recycling
A new report from the U.S. National Renewable Energy Laboratory (NREL) says PV module lifetime extensions should be prioritized over closed-loop recycling to reduce demand for new materials.
Green | Nov 13, 2022
Global building emissions reached record levels in 2021
Carbon-dioxide emissions from building construction and operations hit an all-time high in 2021, according to the most recent data compiled by the Global Alliance for Buildings and Construction.
University Buildings | Nov 13, 2022
University of Washington opens mass timber business school building
Founders Hall at the University of Washington Foster School of Business, the first mass timber building at Seattle campus of Univ. of Washington, was recently completed. The 84,800-sf building creates a new hub for community, entrepreneurship, and innovation, according the project’s design architect LMN Architects.
Architects | Nov 10, 2022
What’s new at 173 architecture firms for 2022
More than 295 U.S. architecture and architecture-engineering (AE) firms participated in BD+C's 2022 Giants 400 survey. As part of the Giants survey process, participating firms are asked to describe their most impactful firm innovations and noteworthy company moves in the past 12 months. Here is a collection of the most compelling business and project innovations and business moves from the 2022 Architecture Giants.
Giants 400 | Nov 9, 2022
Top 30 Data Center Architecture + AE Firms for 2022
HDR, Corgan, Sheehan Nagle Hartray Architects, and Gensler top the ranking of the nation's largest data center architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Giants 400 | Nov 8, 2022
Top 110 Sports Facility Architecture and AE Firms for 2022
Populous, HOK, Gensler, and Perkins and Will top the ranking of the nation's largest sports facility architecture and architecture/engineering (AE) firms for 2022, as reported in Building Design+Construction's 2022 Giants 400 Report.
Industry Research | Nov 8, 2022
U.S. metros take the lead in decarbonizing their built environments
A new JLL report evaluates the goals and actions of 18 cities.
Hotel Facilities | Nov 8, 2022
6 hotel design trends for 2022-2023
Personalization of the hotel guest experience shapes new construction and renovation, say architects and construction experts in this sector.
Green | Nov 8, 2022
USGBC and IWBI will develop dual certification pathways for LEED and WELL
The U.S. Green Building Council (USGBC) and the International WELL Building Institute (IWBI) will expand their strategic partnership to develop dual certification pathways for LEED and WELL.
Reconstruction & Renovation | Nov 8, 2022
Renovation work outpaces new construction for first time in two decades
Renovations of older buildings in U.S. cities recently hit a record high as reflected in architecture firm billings, according to the American Institute of Architects (AIA).
