Rates

• Rate increases slowed slightly during 2021 and whilst we expect them to continue to rise, it will be at a slower level of increase during 2022. Certain types of risks, however - particularly those with potential impact of water and projects involving timber frame or cross laminated timber (CLT) - are seeing higher rate increases as capacity is reduced and increased losses continue to be experienced.
• Sublimits and limits for extensions in cover remain reduced from those available in the soft market, but ‘adequate’ levels can usually be negotiated.

Appetite

• Underwriters’ appetite remains generally broad and most types of risks are considered, however heavy civils, tunnelling and timber frame/CLT projects are tougher to place. We are seeing an increased focus on the use of social impact reports from a number of key markets, which are implemented at a corporate level and can also effect underwriters' appetite.

• For standard four walled building projects, water damage mitigation and fire protection measures continue to be of upmost concern for underwriters. Our successful approach is to work with insureds to understand these risks for their project and recommend measures in place that would ultimately reduce deductibles and/or rates. An understanding of the CIREG code and draft Water Management Plan has been beneficial to many clients.

Capacity

• Capacity in London for well-presented risks remains strong. Risks are generally taking longer to place as there remains few lead markets willing to quote, and follow markets can still determine the final terms and total cost in order to commit their support. High quality underwriting information is still crucial to get the best terms and most effective responses from underwriters, as well as early engagement on programme renewals or upcoming opportunities.
• Wood frame/CLT capacity has significantly diminished. A few markets will provide follow support to selected leaders who impose strict security terms.

• There remains sufficient capacity and appetite for larger construction projects.
  
  

For further market information, or to discuss insurance for your construction project, get in touch.