Heavy competition, job scarcity and a buyer’s market will continue to stand out as the top challenges facing the construction-risk segment this year.
Another key area of concern: the possible repercussions for commercial general liability policyholders from pending legislation that could again considerably alter the definition of an “occurrence” in contract language in yet another state.
He characterized the residential construction market in California overall as terrible, with flat growth rates continuing through 2011—although there are pockets of growth in some areas, especially in parts of Southern California, he said.
For insurers, however, surplus remains at high levels, allowing them to continue to remain competitive. Builders and developers see strategic opportunities during 2011 to develop land into finished lots, with construction beginning in 2012 and the insurance market returning to a seller’s market around 2013.