Page 18 - 2016 State of the Market from AmWINS
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18 | Am1W6 IN| SASmtaWteINoSf SthteatMe oafrktehte Market
INDUSTRIES
CONSTRUCTION &
BUILDERS RISK
Aggressive market presents opportunity for retail agents
looking to build their construction book
Although there are signs the market construction and engineering projects, Underwriters are also considering lower
may soften and the pace of building has particularly heavy civil engineering along deductibles than in the past and are
fallen a bit from 2015, most segments with power stations, oil and gas, cement willing to broaden terms and conditions.
of construction continue to do well. U.S. plants, and other large technical projects.
construction starts for 2016 are still “Underwriters know they are in less of
projected to rise 6 percent to $712 billion, London continues to be an aggressive a position to drive terms,” says Frank
according to Dodge Data & Analytics. player on the property side, especially on Catalano, executive vice president and
CAT-exposed business and projects with property broker at AmWINS Brokerage
When combined with strong capacity contract periods of more than 30 months. in Chicago, Illinois. “There are still
and a broad underwriting appetite, these disciplined underwriters out there, but
conditions create continued opportunity “With a limited number of CAT losses, they know somebody else is willing to ask
for agents and brokers in both builders risk improved contractor experience and risk fewer questions to get the deal done.”
and construction casualty. management, and continued low interest
rates combined with excess cash in the While some pockets of construction
BUILDERS RISK global system, the insurance industry casualty business remain challenging,
remains an attractive berth for capital,” as long as interest rates are low and
In builders risk, an abundance of says Steve Willsmer, managing director of demand is high, casualty remains a
inexpensive capital equates to increased the construction and engineering division buyers’ market. New market entrants are
capacity in the marketplace. “A year ago, at THB Group in London. increasingly aggressive, and long-term
there was adequate capacity; now there markets are throwing in coverages that
is a flood of capacity,” says Grant Chiles, As a result of capacity growth, previously required a premium-bearing
senior vice president and property broker builders risk rates are at 10-year endorsement.
at AmWINS Brokerage in Atlanta, Georgia. lows. In particular, rates continue to
feel downward pressure on better “With retail-focused markets aggressively
Overcapacity is creating increased construction and CAT-exposed business. seeking business in a soft market, we
opportunities for agents and brokers to Some markets are also increasing their have had success placing traditionally
work with carriers who are aggressively appetite in wood-frame construction, difficult risks, such as Florida condos,
looking to expand their books. There which has negated a premium spike
is strong appetite for all types of seen in that segment 12 months ago.
