What we have seen in June renewals
June renewals for project lifecycle businesses were highly dependent on balance sheet quality, debt maturity, pre-sales, counterparty resilience, construction controls and project pipeline. The Budget makes this more important because tax reform may shift investor behaviour and affect feasibility assumptions.
There continues to be surplus capacity across most classes of insurance. In addition, the slowdown in the construction sector has led to fewer opportunities to deploy capacity, meaning there is significant competition in the market for well managed risks and residential and commercial projects from insurers.
Premium pricing trends
Pricing has been falling across all major construction lines, including material damage (down 5-15%), construction liability (down 10-25%), and professional indemnity (down 10%).
This time in the market is where premium savings can be achieved and policy enhancements available. It is also a key time for policyholders to select their insurance partner for the next 3-5 years for stability when the market cycle turns.
Insurer behaviour
Insurers are still competing, but quality underwriters are looking harder at liquidity, financing, valuations, development assumptions, subcontractor exposure and management capability.
Insurers are working to achieve budgets in an environment where the construction market has cooled, and as such growth must come from new business, not organically. This has led to markets fighting to win business.
Talent for underwriters continues to be a concern. Many insurers have vacancies due to the unavailability of staff. This has led to both longer turnaround times on submissions, and terms being issued by less experienced underwriters who may not have the ability to fully consider exposure prior to issuing terms.
Claims trends
We continue to see water damage losses affecting the market. Significant events ($100M+) have occurred with water damage usually arising from internal loss of water, not weather events. Insurers are looking more closely at risk management in relation to water as well as applying more significant deductibles.
Loss adjustors and TPAs have often performed sub-optimally when engaged by insurers. This is leading to policyholders seeking their own representation to prepare a claims submission. This is covered under the claims preparation cost sublimit but is leading to increased claims costs, which could be avoided if better outcomes were being experienced.
Worker to worker losses continue to affect contractors and insurers. There is little that can be done in relation to avoiding these claims (given most contractors would suggest they have high standards in respect of safety) and as such the losses are often paid with little defence being offered. With insurance deductibles increasing, many policyholders are starting to self-manage these losses and mount a more rigorous defence.
Legal and regulatory developments
Brambles/Nuix, Halifax/Shangri-La and Aquamore all matter in this ecosystem. Budget reform adds a further layer by affecting investor demand, pre-sales, capital gains decisions and transaction timing.
AI and technology impact
AI is being rolled out across multiple sectors of the construction industry. From CAD modelling, site safety systems, site diaries, toolbox talks, there are many contractors taking advantage of AI in their businesses.
We would expect this trend to continue, and expect that used properly AI will have the potential to greatly improve construction quality and reduce costs.
What policyholders should do now
Insurance markets are cyclical. During a soft market, insurers compete aggressively on price, but when capacity tightens or claims increase, premiums can rise sharply and coverage may become more restrictive. Builders that have invested in strong risk management, maintained stable insurer relationships, and demonstrated good claims performance are generally better positioned to secure more favourable terms through these harder market conditions.
For medium to large construction businesses, the goal should be to treat insurance as a strategic business investment rather than a commodity purchase. Companies that consistently demonstrate sound governance and risk management often experience less premium volatility and greater access to quality insurers over the long term.
Key strategies include:
- Build long-term insurer relationships
- Invest in risk management
- Maintain accurate financial reporting
- Improve claims performance
- Purchase appropriate limits (noting that buying adequate protection during a soft market is often far more economical than increasing limits during a hard market)
- Review deductibles strategically
- Provide high-quality underwriting information
- Avoid frequent insurer changes
- Work with a specialist construction broker
- Develop a long-term insurance strategy.
Continue reading our full range of market updates:
- Insurance Market Overview: July 2026
- Claims
- Workplace Risk
- Corporate and Multinational Risk
- Construction, Property and Development
- Financial Lines
