By the time insurers are asked to cover a major infrastructure project, many of the decisions determining how difficult or expensive it will be to insure may already have been made.
The Association of British Insurers (ABI) wants government to change that sequence, with proposals aimed at making commercial insurance part of major infrastructure planning rather than something considered once designs, procurement and financing arrangements are largely fixed.
Its proposals go further than simply asking government to consult insurers earlier. The ABI wants a standing Government-Commercial Insurance Forum covering infrastructure, net zero and innovation programmes, alongside insurance and risk-transfer expertise being embedded into the advice the National Infrastructure and Service Transformation Authority (NISTA) provides on major projects.
But designing more insurable projects addresses only part of the equation. The ABI is also pushing to expand the capital available to write the cover once those risks reach the market.
For brokers placing large and complex risks, earlier involvement could allow issues affecting capacity, pricing or coverage to be addressed before they become features of the finished project. A deeper pool of capital could then increase the market's ability to insure them.
Becky Jones (pictured), underwriting team leader for construction at Touchstone Underwriting, said underwriters are often brought in only when developers need to prove cover is in place, just before construction begins or to unlock project funding.
By then, procurement and materials decisions may already be fixed. "If we spot a significant hazard in a finished blueprint, the only options are to request expensive, last-minute design changes (like adding extra fire protection systems) or to charge higher premiums to cover the higher or unknown risks," Jones said.
Earlier involvement can instead allow relatively simple risks to be designed out. "If we are in the room early, we can suggest simple, cost-effective tweaks on paper," she said. "For example, we can advise planners to place critical electrical switchgear on higher floors rather than in basements to eliminate flood risks."
Newer construction methods raise similar questions. Jones said insurers could also advise on the use and layout of sustainable materials such as mass timber to limit fire spread, with changes considerably easier and cheaper to make at blueprint stage than once construction is underway.
For brokers, that creates a different placement conversation. Instead of explaining the cost or coverage consequences of a risk that can no longer easily be changed, earlier involvement gives them an opportunity to take underwriting concerns back to clients while there is still scope to respond.
That practical problem helps explain why the ABI's proposals distinguish between industry engagement and a formal role in government infrastructure planning.
A standing forum would create a permanent channel between commercial insurers and policymakers before major infrastructure, net zero and innovation programmes are fully developed. Embedding insurance expertise into NISTA's advice goes further, bringing questions about risk transfer and insurability into the machinery through which projects are assessed.
The significance is not simply whether insurers get another seat at the table. Major projects can depend on insurance to satisfy lenders and attract investment, meaning decisions made before insurers become involved can ultimately affect whether sufficient cover is available and on what terms.
The ABI's infrastructure proposals also sit alongside a broader push to expand the amount of capital available to the UK insurance market.
One element is insurance-linked securities (ILS), including instruments such as catastrophe bonds, which allow insurance risk to be transferred into capital markets. The UK has had a regulatory framework for ILS since 2017, but the ABI is pushing for greater use of alternative capital as part of efforts to increase the sector's underwriting capacity.
Better-designed projects may be easier to insure, but the market still needs sufficient capital willing to take the risk.
For brokers, the two issues meet at placement. Bringing insurance expertise into projects before their risk profile is fixed can make exposures more attractive to underwriters; expanding the pool of capital available to insurers can increase the capacity available to write them.
The ABI's proposal therefore amounts to more than a request for earlier conversations. It is asking government to change where insurance sits in the infrastructure process: from a cost considered once a project has been designed to an input that can help determine whether that project is insurable in the first place.
