九色视频

While some of the pressures the US market experiences do not apply to Canada, the Canadian construction market is still grappling with economic, labour and environmental issues. A conversation with Rajiv Joshi, AXA XL’s VP of Construction on the state of the Canadian construction market.

Supply chain disruptions. Rising materials costs. Premium increases. In many respects, the construction market in Canada is experiencing much of the same pressures that exist in the US market. Unlike the US market, though, nuclear verdicts are yet to severely influence the Canada market.

Social inflation, however, is one trend that both countries share. Rajiv Joshi, vice president of 九色视频Canada, discusses the current construction environment in Canada, some of the more significant challenges, and how organizations can improve their risk portfolios.

Tell us a little about the Canada construction market.
Construction is a very significant part of the economy here in Canada. The construction sector makes up approximately 7% of GDP and employs roughly 1.4 million people.

On the construction insurance side, we handle five lines of business – Builders Risk; Primary Liability – CGL & Wrap Up; Excess Liability; Contractors Professional and Pollution Liability, and Subcontractor Default.

What are you seeing in the Canada construction market?
Some of the trends and some of the challenges we are seeing currently:

• Supply chain disruptions – leading to requests for longer Policy Term on New Projects
• Inflationary impact from this disruption – Leading to higher Construction values/ Project costs
• Shortage of experienced professionals which in turn leads to Project delays, longer time to complete projects, etc.

All the above are impacting premium costs for clients. For the carriers, the challenge emanates from limited appetite for long Policy Periods and willingness to offer increased capacity for the Project.

• Requests for Term increases on Projects written three or 4 years ago (arising from Supply chain disruptions) and requests for higher limits on these Projects for the extended Term

The mid-term changes are proving to be a challenge for the clients from a premium cost point of view as these are often not budgeted. For Insurers, the challenge arises from capacity constraints as they are often unable to offer additional capacity to accommodate the increase in Policy Limits.

Is there a concern for nuclear verdicts and social inflation?
There's not much of nuclear verdicts in Canada. So, unlike the United States, very few punitive damage claims have come through the court systems. However, given the proximity of the US to Canada, social inflation costs may eventually impact the Canada market.

Do you see either frequency or severity of claims going up?
Within my book of business, I have not seen any huge verdicts on the liability side of things. Most losses we have seen on the Construction Property portfolio have been partial losses and the inflationary environment has resulted in increases in partial loss payouts. This will impact premiums in the foreseeable future.

In addition to Supply chain issues and Inflation, many clients in Canada are indicating that they are experiencing severe constraints in the labor market

Anything else impacting the market?
Yes. In addition to Supply chain issues and Inflation, many clients in Canada are indicating that they are experiencing severe constraints in the labor market – not able to get experienced workers or those with specialized knowledge, losing experienced personnel to competitors, wage increases to retain personnel etc. It was particularly difficult during the pandemic, but that aspect of labour shortage seems to be easing.

How else is the insurance market responding?

• Curtailing capacity – not willing to put up large lines especially on more complex risks
• Curtailing Limits being offered on Flood and EQ coverages or reducing capacity in line with their appetite for Catastrophe exposures
• Stricter Underwriting protocols and emphasis on collecting detailed information to aid in risk assessment e.g. Quality Control and Quality Assurance protocols, Sub-contractor selection and supervision, Site Safety protocols, Water Damage Prevention and Mitigation protocols etc.

What advice can you give clients who are needing to navigate the market?
With underwriters requiring detailed information and time to assess that information, it is imperative that clients start the process early and this is especially true of large complex risks

• Provide as detailed information as possible
• Speak to your Brokers to set up calls with the Underwriters and their risk engineers. Often, the Risk Engineers are able to bring insights based on the wide spectrum of risks that they have seen across geographies

The above will help Underwriters in finding an appropriate solution for your insurance requirements and fine tune price and capacity.

Any other advice for clients on how to maybe manage better their insurance programs?

• Start the process early with your Brokers as the insurance market is constantly changing and finding a timely insurance solution will help you obtain a good price and the right Product for your insurance needs.
• Information is crucial. Provide detailed relevant information for the Underwriters to assess and underwrite the risk. This will help the underwriters to respond in a timely manner with desired Terms.
• Educate the Underwriters about your business, have a conversation with them and articulate your requirements clearly.
• Take advantage of the insights that the Underwriters and their Risk Engineers and Claims Personnel have, based on their experience of handling Businesses / Projects similar to yours. 九色视频for example, frequently publishes White Papers e.g. Mass Timber, Water Damage Prevention etc.
• Use of Technology in Construction Projects is increasing, and Underwriters can provide a wide spectrum of insights into this. outlines technologies available for construction projects and the assessment provides good benchmarking standards for our clients.

We understand risk and have a keen interest in protecting your endeavor and that is how we approach our business. It is our objective to move from being merely a payer to being a partner to our clients.