The massive influx of projects the construction industry is enjoying these days hit home for me not in New York, where I live, but overseas.
Last summer I visited Lloyd's of London to conduct interviews and shoot video for our “Inside Lloyd's” project, which provided a rare look inside the inner workings of the world's leading specialty insurance market. On July 9, 2016, I had the chance to gaze upon the city from one of the Lloyd's building's exterior-set glass elevators. One would be hard-pressed to find a more spectacular view of London.
As we climbed and the panoramic view spread out before us, the entire cityscape was dotted with cranes, nearly as far as the eye could see.
That's when it was hammered home to me that the “construction boom” I’d heard about was a very real thing indeed.
Too much of a good thing?
Construction is very much on our minds this month, with Joyce Ann Grabel's cover feature delving into the challenges and continued opportunity presented by the building boom of the last several years. It's still a very busy time for construction companies, perhaps too much so; for every job they accept, other projects have to be taken on by someone else — and that “someone else” isn't always the first choice or the best choice. Not every firm is a good risk, and their protections have to be underwritten carefully.
Even the “good” firms have to be watched closely, as they’re understandably eager to take on more projects — they have to strike while the iron is hot — but even with their best intentions they can't always meet their commitments when multiple jobs are happening simultaneously.
Years back, when the Great Recession set in and belts were tightened, many building projects had to be delayed for lack of funding. Some jobs simply ran out of money and had to be put on hold. In the time since, many of the more mature, skilled laborers who’d worked in construction for decades decided it was time to pack it in or take up another line of work. They had mouths to feed, and waiting around for years for the industry to pick up again wasn't an option.
Shallow talent pool
Now with the construction industry firing on all cylinders, that pool of specialized talent has become more shallow. That's good news for those workers, as they’re in more demand and in some cases can command a bigger fee — but bad news for the business at large because there isn't enough of that talent to go around. Good workers are badly needed for a variety of projects.
In addition to mounting losses on the Commercial Auto side, bodily injury claims are the biggest loss category in construction. On many job sites, you have two types of workers at risk: new ones who in some cases don't yet know all the ways to become injured and learn the hard way, and older ones who aren't as nimble or strong as they used to be and end up hurt on the job.
I’ll be attending IRMI's annual Construction Risk Conference, set for Nov. 5-8 in Indianapolis at the J.W. Marriott, a terrific event with educational sessions and panels featuring some of the top minds in this field. One of the featured speakers is one of my favorite insurance executives, XL Catlin CEO Mike McGavick, a straight shooter who I always enjoy the chance to speak with. He will host a talk titled “Insurance Innovation: No Longer the Road Less Traveled,” on Monday, Nov. 6 at 8:45 a.m. Another friend of NU, Tim East, director of risk management for The Walt Disney Co., will speak on Wednesday the 8th at 12:50 p.m. about “Aligning Owner and Contractor Interests.”
Beginning Nov. 3 on PropertyCasualty360.com, we’re going to be hosting a weeklong content hub devoted exclusively to construction-related content, featuring contributed insight from industry experts at Aon, Willis, Burns & Wilcox, Philadelphia Insurance Companies, Chubb, Starr Companies, Lockton, XL Catlin, USI and many others. This special hub will run in concert with the IRMI conference, and PC360 staffers will be on hand bringing you news from the show as well. If construction-related content is of interest to you, you won't want to miss a minute of it.