Engineering and construction projects around the world have experienced significant growth spurts in recent years. Project sites are now much larger, more expensive and much more complex, meaning more is at stake if things go wrong. According to Allianz Global Corporate & Specialty (AGCS), there are several major trends driving large losses in engineering and construction projects worldwide.
Projects boom in size
The first trend is that higher values bring larger loss impact. According to the insurer, as engineering and construction projects grow in size and longevity, the sums insured are also inflating massively. As Raymond Hogendoorn, global head of property and engineering claims at AGCS, pointed out: “Projects with values of $5 billion to $10 billion are not unusual, meaning claims can be in the tens of millions of dollars.” In a recent report into ‘Engineering and Construction Claims and Insurance Trends,’ AGCS gave the example of flooding during construction at the Hidroituango hydropower dam in Colombia in 2018. That event is estimated to have cost insurers around US$1.4 billion, making it one of the largest engineering claims ever recorded.
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