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NASHVILLE, Tennessee — The construction industry and the insurance brokers that serve it will need to adapt rapidly in the face of global trends, Willis Group Holdings P.L.C. CEO Dominic Casserley said Tuesday.
Delivering the keynote address at the International Risk Management Institute Inc.'s 34th Construction Risk Conference in Nashville, Tennessee, Mr. Casserley indentified several trends that are reshaping the construction industry.
One of the most important trends for builders is the global move toward urbanization, Mr. Casserley said.
“Urbanization is a global phenomenon as city populations are surpassing rural populations around the world, and the trend is inexorable,” he said. “By 2025, we believe cities will need to construct floor space equivalent to 85% of today's urban and commercial buildings.”
While most of the world's fastest-growing cities are in Africa and Asia, North America will not escape the affects of the urbanization trend as millennials flock to cities, Mr. Casserley said.
“The millennial generation will only perpetuate this trend and create significant opportunities for construction and also significant stresses on our resources,” he said.
A related trend, Mr. Casserley said, is a need for renewed investment in infrastructure, noting a recent survey conducted by McKinsey & Co. that estimates $57 trillion in global infrastructure investment will be needed by 2030 to support projected economic growth.
“Infrastructure of all types is under enormous stress,” he said. “Significant investment in infrastructure is required just to keep up.”
A more worrying trend for the construction industry is finding enough workers to do the work. “The construction industry needs highly skilled engineering talent to join it and seek long-term careers,” Mr. Casserley said. “The problem is that this engineering talent these days has a lot of options. These people are also highly sought by technology firms and financial institutions.”
As the challenges faced by the construction industry evolve, so, too, must insurance brokers, Mr. Casserley said.
Citing a recent energy plant construction project in North Africa that required the expertise of a variety of Willis employees, including people from their utility and construction practices as well as their U.S., regional and London offices, insurance brokers must emphasize collaboration.
“The insurance broker of the future who will handle this sort of risk will have to be analytical, specialized and also aware of geographic differences,” he said. “The skills required in a global, more complex and multifaceted construction industry have to be enormously collaborative.”
The construction services group at Aon Risk Solutions has launched a web-based tool to help clients manage the risks posed by working in multiple locations.