The “increasingly competitive” construction insurance market will see similar challenges over the course of 2017, an expert has said.
Last year, like many insurance sectors, construction saw an over-supply of capital putting downward pressure on premium rates and new market entrants seeking to make their debut by offering broader policy wordings.
While opportunities in the market existed for smaller, specialised firms, Shane Sheppard, head of construction at ATC Insurance Solutions, said that he believes 2017 will be more of the same in the construction market.
As reinsurance rates decrease and fewer catastrophe claims roll in, insurers and underwriters will look to other means to grow their market share.
“Insurers will also be looking to improve their technology to further streamline the issuing of their products, sometimes with less human underwriter oversight,” Sheppard told Insurance Business.
“Disciplined underwriting is paramount.”
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Some in the industry are already seeing green shoots as markets begin to harden after one of the toughest troughs in recent memory.
In construction, as Queensland and Western Australia slowdown in both the construction and mining sectors, the market could remain a challenge.
Sheppard believes that there are still opportunities for growth in the construction market, particularly for smaller firms with sound knowledge and underwriting capabilities.
Specialised firms will look to place both standard and hard-to-place risks and may branch into other complementary areas of insurance such as plant and machinery.
With the sector facing both challenges and opportunities over the coming year, Sheppard stressed that some things will never change.
“Long term sustainability and profitability must be at the forefront of insurers’ minds.”
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