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Global construction rate trends


March 17, 2021

While the overall marketplace remains very difficult with continued upward rate pressure, we are seeing the emergence of different outcomes for clients.

The economic downturn caused by COVID-19 has resulted in many contractors forecasting lower exposure bases; sales, payrolls, contract revenue, vehicle count, etc., but as exposures decline, insurers are raising rates at an increasing pace to grow or at least maintain overall premium. Effective use of analytical tools will be critical to driving sound risk management decisions.

Regional insights

The market for construction general liability (GL) continues to trend upward. However, while for several years insurers have signalled GL as the “next auto,” drastic rate increases have not always materialised.

Commercial auto remains one of the most challenging lines or insureds, with persistent rate increases and program structure changes. While most construction firms have encountered a flattening of workers compensation rate reductions and premium offsets, the line continues to run well for most insureds and insurers.

The umbrella and excess marketplace for construction remains extremely challenging. The pace of rate increases is accelerating. Contractors are also experiencing significant restrictions in coverage. We expect these conditions to continue well into 2021.

Pushed by increased reinsurance rates and diminishing capacity, controlled insurance programs (CIP) pricing continues to increase. We anticipate rates will continue to escalate in the coming months.

The builders risk market continues to remain challenging, as insurers rebalance their portfolios in pursuit of underwriting profitability after years of global losses and soft market conditions.

The U.S. construction professional indemnity/liability market remains relatively competitive, although insurers are evaluating capacity deployment and retention levels and applying added underwriting scrutiny to certain coverage enhancements.

With construction activities looking to make a rebound from projects delayed and suspended by the COVID-19 pandemic, the utilisation of contractor’s pollution liability (CPL) will likely be at an all-time high in 2021. Fortunately, the CPL market (comprised of more than 25 insurers globally) will be ready to meet this demand.

Work delays and uncertainty resulting from the pandemic are likely to impact subcontractor risk and default into 2021. This trend has created increasing interest in subcontractor default insurance (SDI) coverage, resulting in additional insurer capacity entering the market.


Each applicable policy of insurance must be reviewed to determine the extent, if any, of coverage for COVID-19. Coverage may vary depending on the jurisdiction and circumstances. For global client programs it is critical to consider all local operations and how policies may or may not include COVID-19 coverage. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal and/or other professional advisors. Some of the information in this publication may be compiled by third party sources we consider to be reliable, however we do not guarantee and are not responsible for the accuracy of such information. We assume no duty in contract, tort, or otherwise in connection with this publication and expressly disclaim, to the fullest extent permitted by law, any liability in connection with this publication. Willis Towers Watson offers insurance-related services through its appropriately licensed entities in each jurisdiction in which it operates. COVID-19 is a rapidly evolving situation and changes are occurring frequently. Willis Towers Watson does not undertake to update the information included herein after the date of publication. Accordingly, readers should be aware that certain content may have changed since the date of this publication. Please reach out to the author or your Willis Towers Watson contact for more information. Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, Willis Towers Watson offers insurance products through licensed subsidiaries of Willis North America Inc., including Willis Towers Watson Northeast Inc. (in the United States) and Willis Canada, Inc.

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Global Head of Construction

North America Construction Broking Leader

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