Majority of the projects will be in emerging markets.
According to AIG, more than 60% of global construction is going to take place in emerging markets by 2025, and construction in these emerging markets is now outpacing developed markets for the first time.
As Asia’s insurance hub, Singapore-based firms are expected to underwrite US$4.5 billion worth of construction projects this year, a 22% increase over the past five years, and set to increase to US$6.5 billion by 2018.
This figure not only represents the increasing number of projects being undertaken across Asia, but also highlights the multiple risks involved in these projects.
“Today projects involve a global supply chain, where materials and equipment are sourced all over the world and this inherently increases the risk, when the complexity of multiple jurisdictions is introduced, different legal exposure, contractual obligations, tax and compliance issues, and cultural norms such as work safety have to be taken into consideration,”
stated Rudi Spaan, AIG’s Head of Broker & Client Management.