Both the construction and the re/insurance industry face disruptive changes in the near future.
And both industries need to prepare.
The two industries gathered for this event will be faced with disruptive changes in the near
future. There are multiple players in the construction industry looking at different
construction methods, new materials, innovative processes and better ways to
communicate and collaborate along the value chain. The exact form these
developments would take is still unclear.
In the Expert Hearing that I organized, a key observation emerged in discussions was
the high degree to which new technologies in the construction will challenge insurers to
develop new approaches to understanding and evaluating risk on the construction
site. Reinsurance covers have not substantially changed for over 30 years and
are dated in many ways. However, reinsurers have previously demonstrated a willingness
to work with industry to come up with new coverages and solutions. One example is
solar panel warranty.
As it comes out, asymmetry of information and misalignment of interests between contractors
and insurers is the biggest barrier to overcome. The exchange of secure, reliable
and transparent data is a key to overcome many of these hurdles and all the
participants agreed that leveraging such data sources is the best way to
prepare for the future. Consequently, most experts in the room believed Building
Information Modelling (BIM) will have a major impact on the construction
industry in the near future. Reinsurers need therefore consider getting more
involved on this topic. For instance, in industry initiatives related to
standards on BIM as the information required to calculate new risks sit in
these integrating systems. It seems to me indeed that the access to relevant
data is the point of entry for Engineering Underwriters to start attacking
recurring loss causes and developing new products.
It is vital to stay closely involved with key industry players and continue to learn
as much as possible about the innovative technologies and practices that are
shaping the future of construction. But what could be the form of new construction
insurance products and how can they materialize?
Location: Rüschlikon, Switzerland