\n<\/p>\n
JOHANNESBURG\/LONDON\/MUNICH\/NEW YORK\/PARIS\/SAO
\u00a0<\/p>\n “Covid-19 has brought about a new age for the construction
\u00a0<\/p>\n The
The Asia Pacific infrastructure market is expected
Downsides
The
Upscaling
“Huge
The
Ultimately,
The
Better protection of
Meanwhile, water damage
The Asia Pacific infrastructure market is
expected to grow 7 \u2013 8% a year over the next decade. Current shortage
of materials and skilled labor add to long-term challenges around new design,
materials and building methods driven by sustainability and net zero strategies. AGCS analysis of \u20ac11bn
worth of construction and engineering claims over five …<\/p>\n","protected":false},"author":1,"featured_media":19118,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[60],"tags":[],"_links":{"self":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts\/19117"}],"collection":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/comments?post=19117"}],"version-history":[{"count":0,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/posts\/19117\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/media\/19118"}],"wp:attachment":[{"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/media?parent=19117"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/categories?post=19117"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/eodishasamachar.com\/en\/wp-json\/wp\/v2\/tags?post=19117"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nPAULO\/SINGAPORE<\/span>\u00a0– <\/b>Media OutReach<\/a>\u00a0–\u00a0<\/b>30 November 2021 – The global construction market
\nis set for a sustained period of strong growth post-Covid-19, driven by
\ngovernment spending on infrastructure and the transition to a net zero society.
\nHowever, the switch to more sustainable buildings and infrastructure, the upscaling
\nof clean energy facilities and the adoption of modern building methods will
\ntransform the risk landscape, with radical changes in design, materials and
\nprocesses. These challenges add to currently-stressed supply chains, shortages
\nin materials and labor
\nand increased costs, which all come against the backdrop of years-long tight
\nmargins in the industry. A new report from Allianz Global Corporate &
\nSpecialty (AGCS), <\/span>Construction risk after Covid<\/i><\/a>, explores both acute and long-term risk
\ntrends for the construction sector.<\/span><\/p>\n
\nindustry,” says Yann Dreyer, Global Practice Group Leader for Construction in
\nthe global Energy & Construction team at AGCS. “While construction projects
\ncontinued during the pandemic, and further growth is to come, the overall environment
\nhas changed fundamentally. The industry faces new challenges around supply
\nchain volatility and spiking material costs, skilled workforce shortages and
\nthe heightened focus on sustainability. In addition, the accelerated deployment
\nof cost-cutting strategies and implementation of new technologies and designs
\nmay well result in accelerated risks for construction companies and insurers
\nalike. Continued risk monitoring and management controls will be key moving
\nforward. Together with our clients, we will help manage these challenges as
\nAGCS is committed to the construction industry as a key target sector for our
\ngrowth initiatives.”<\/p>\n
\nstrong growth outlook for the sector is based on a number of factors, such as
\nrising populations in emerging markets and significant investment in
\nalternative forms of energy such as wind, solar and hydrogen, as well as power
\nstorage and transmission systems. The shift to electric transport will require
\ninvestment in new plants and battery manufacturing facilities and charging
\ninfrastructure. Buildings are not only expected to improve their carbon
\nfootprint, but will also require improved coastal and flood defences and sewage
\nand drainage systems in many catastrophe-exposed regions in response to more
\nfrequent extreme weather events. At the same time, governments in many countries
\nare planning major public investments in large infrastructure projects to both stimulate
\neconomic activity after the pandemic crisis and drive the low carbon
\ntransition. In the US, a $1 trillion+ infrastructure package touches everything from bridges and roads to
\nthe nation’s broadband, water and energy systems. At the same time it
\nhas announced\u00a0plans<\/a>
\nto invest in a number of large infrastructure projects around the world in 2022
\nin response to China’s ambitious Belt And Road
\nInitiative<\/a>, which could stretch from East
\nAsia to Europe. Four countries \u2013 China, India, US and Indonesia
\nare expected to account for almost 60% of global growth in construction<\/a>
\nover the next decade<\/a>.<\/p>\n
\nto grow 7
\n\u2013 8% a year<\/a> over the next decade, reaching US$5.36
\ntrillion a year by 2025.<\/p>\n
\nof the construction boom<\/b><\/p>\n
<\/b>
\nThe expected boom brings specific challenges in addition to benefits. In the
\nmedium term, sudden surges in demand could put supply chains under additional
\npressure and exacerbate existing shortages of materials and skilled labor, causing
\nschedule and cost overruns. In addition, many in the industry may need to
\naccelerate the implementation of efficiency and cost-control measures if profit
\nmargins have been impacted in the Covid-19 economy, which can often impair
\nquality and maintenance levels and increase susceptibility to errors. Analysis
\nby AGCS shows that design defects and poor workmanship are one of the leading
\ncauses of construction and engineering losses, accounting for around 20% of the
\nvalue of almost 30,000 industry claims examined between 2016 and the end of 2020<\/a>.
\n<\/p>\n
\nenhanced sustainability and net zero focus will strongly influence the
\ntraditional risk landscape in the construction sector. According to the UN
\nEnvironment Programme<\/a>, buildings and the construction industry account for
\n38% of all energy-related carbon dioxide emissions. In order to cut carbon
\nemissions, existing buildings will need to be refurbished and repurposed.
\nAdditionally, new materials and construction methods will need to be introduced
\nacross the market in relatively short periods of time. This will bring an
\nincreased risk of defects or may have unexpected safety, environmental or
\nhealth consequences. For example, as a sustainable and cost-efficient material,
\nthe use of timber in construction has increased in recent years. However, this
\nhas implications for fire and water damage risks. AGCS claims analysis shows
\nthat fire and explosion incidents already account for more than a quarter (26%)
\nof the value of construction and engineering claims over the past five years \u2013
\nthe most expensive cause of loss.<\/p>\n
\nclean energy \u2013 renewable risks<\/b><\/p>\n
<\/b>
\nExpanding clean energy brings new risks, too. Offshore wind projects are growing
\nin size, moving further out to sea and into deeper waters, meaning the costs
\nassociated with any delays or repairs is increasing. Offshore wind farms, as
\nwell as onshore wind and solar projects, can also be exposed to serial losses.
\nA design or manufacturing fault in a turbine, for example, can impact many
\nprojects. There have also been large claims from faulty foundations in solar
\nparks and farms.\u00a0Repairs to undersea cables, which weigh thousands of tons
\nand require special ships to lay, can take more than a year. An offshore
\nconverter station alone can cost as much as $1.5bn, comparable to an oil rig. A
\nfire or explosion involving a converter, as seen recently in China, can result
\nin a total loss.
\ninvestments in green energy will mean larger values at risk, while the rapid
\nadoption of prototype technology, buildings methods and materials will require
\nclose cooperation between underwriting, claims and risk engineering in-house,
\nas well as between insurers and their clients,” says Olivier Daussin,
\nConstruction Underwriting Lead in AGCS’s global Energy & Construction team.<\/p>\n
\ntwo sides of modular construction<\/b><\/p>\n
<\/b>
\nThe size of the global modular
\nconstruction market size is projected to grow from $82bn in 2020 to $109bn by
\n2025, at a combined annual growth rate (CAGR) of 5.75%. In terms of value and
\nvolume, permanent modular construction is estimated to dominate the market and
\nsteel is tipped to be the fastest-growing market segment. The healthcare
\nindustry is projected to be the fastest-growing end-use sector through to 2025,
\nwith the Asia-Pacific region set to grow at the highest CAGR of any region
\nduring this period, followed by Europe and North America.<\/p>\n
\nmodern building
\nand production methods have the potential to radically transform construction,
\ntransferring more risk offsite and incorporating greater use of technology. Modular construction
\nin particular provides many benefits such as controlled factory-based quality
\nmanagement, less construction waste, a construction timeline cut in half
\ncompared to traditional methods, and reduced disruption to the surrounding
\nenvironment. However, it also raises risk concerns about repetitive loss
\nscenarios. “There is an increased risk of serial losses with modular and
\nprefabricated methods as the same part could be used across several projects
\nbefore a fault is discovered,” Daussin explains.<\/p>\n
\nshortage of skilled labor in the construction industry is likely to further the
\ntrend towards offsite manufacturing and automation. At the same time, digitalization
\nof construction creates cyber exposures which engineering and building
\ncompanies need to strengthen their defenses against. Today, the numerous
\nparties involved on a construction site are interconnected through various
\nshared IT platforms, which increases their vulnerability. Cyber risks can range
\nfrom malicious attempts to gain access to sensitive data, to disruption of
\nproject site control and associated theft, to supply chain disruption, to potential corruption of project
\ndesign data, resulting in delays and ultimately reputational risk for parties
\ninvolved.<\/p>\n
\nbuilding sites against natural hazards<\/b> and water damage<\/b><\/p>\n
<\/b>
\nThe need to
\nreduce greenhouse gas emissions will not only drive a more sustainable approach
\nto residential and commercial buildings as well as infrastructure but may also
\nhasten the trend as the industry looks to achieve efficiencies and minimize
\nwaste. Construction sites also need to give more consideration to mitigate the
\nimpact of climate-driven events, such as wildfires, flash flooding and
\nlandslides. AGCS claims analysis shows that natural hazards is already the
\nsecond most expensive cause of construction losses, behind fire and explosion,
\naccounting for 20% of the value of claims over the past five years. <\/p>\n
\ncontinues to be a major source of loss during construction. AGCS has seen a number
\nof surprisingly large losses from leaks from pressurized water or fire systems
\nthat go undetected or occur out of business hours, on weekends or during
\nperiods when site personnel are not present. Water leak detection and
\nmonitoring systems can help reduce the frequency and severity of water damage,
\nmitigating expensive repairs and project delays.<\/p>\n<\/p><\/div>\n\n
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