WTW Report Highlights Shifting Dynamics in Global Construction Insurance Market

WTW's Q1 2025 Global Construction Rate Trend Report offers a comprehensive update on insurance rate trends and market dynamics across key global regions. According to the report, the construction insurance sector continues to navigate numerous challenges, including labor shortages, inflationary pressures on material costs, and regional economic variations. Despite these headwinds, WTW notes emerging signs of a softening market in specific regions and lines of coverage.

Per the report, North America is experiencing rate reductions in builders risk, with some high-quality accounts seeing up to 20 percent decreases. General liability remains stable, while excess liability shows a continued softening trend. Workers compensation is noted as a bright spot for buyers, with favorable pricing and market appetite. However, labor shortages and increased scrutiny of project costs and schedules remain significant concerns in the underwriting process. WTW estimates the region will need an additional 500,000 skilled workers to meet construction demand, leading insurers to more closely examine project feasibility and labor plans.

According to WTW, the UK construction insurance market is seeing rate reductions for property and construction all risks (CAR), although public liability and professional indemnity are generally stable. Insurers remain selective in the design and engineering professional indemnity market, particularly for projects with limited documentation or elevated risk profiles. The United Kingdom continues to face challenges related to labor availability and inflation, both of which are influencing underwriting decisions and pricing.

In Europe, general market conditions vary, but WTW said there is downward pressure on CAR and third-party liability rates across several countries, including France, Germany, Italy, and Spain. The report notes that project size, quality, and client risk management practices remain important factors in determining rates and terms. Labor shortages are a recurring theme throughout the region, contributing to elevated project risks and underwriting scrutiny.

Per WTW, the Asia-Pacific region reflects rate stability with softening in certain territories. Australia is seeing a modest softening in some property and CAR placements, particularly in residential and infrastructure sectors. This is being driven in part by government initiatives promoting affordable housing. In Singapore and Hong Kong, insurers remain cautious, especially with respect to civil works. The construction sector in Asia is benefiting from continued government and private sector investment, particularly in energy and infrastructure.

According to the report, Latin America's construction insurance market remains highly competitive, with rate decreases across multiple lines, particularly for CAR and liability. Brazil, Mexico, and Chile are identified as countries with continued soft market conditions. However, WTW notes that economic and political instability in countries such as Argentina and Venezuela is reducing insurer appetite and capacity in those markets.

WTW also highlights that the Middle East continues to show softening trends in CAR and liability coverage, especially for large, well-managed projects. However, political risk and project execution challenges still affect underwriting. The report notes that the region's construction activity is heavily concentrated around major infrastructure and energy developments, which tend to attract more favorable terms due to robust risk management and scale.

Globally, the report underscores how inflation, skilled labor shortages, and geopolitical volatility are impacting project risk assessments. According to WTW, rising costs of building materials—driven in part by tariff impacts—are increasing total project values, which in turn raise premiums since many insurance rates are linked to declared construction costs. Insurers are requiring more detailed information on schedules, budgets, labor resources, and supply chains to underwrite effectively.

Despite these challenges, WTW states that buyers are benefiting from improving conditions in certain markets. Softening rates and better terms are becoming available, particularly for clients with strong risk management programs and favorable loss histories. However, the report emphasizes that insurer appetite remains highly variable by region and line of coverage, and careful market navigation remains essential.