QBE Insurance has released its Australian Construction Sector Outlook report, addressing the economic uncertainties impacting the sector and stressing the importance of proactive risk management to navigate these challenges.
A central theme of the report is supply chain resilience, with disruptions from the COVID-19 pandemic, international conflicts, and trade issues highlighting the need for robust contingency plans.
Dale Gleeson, general manager of elders insurance and heavy industries at QBE Australia Pacific, emphasised the importance of staying current with geopolitical developments and exploring alternative procurement strategies to mitigate supply chain risks and minimise disruptions.
“Global supply chain disruptions are likely to continue, so understanding the structure and geographic concentration of suppliers can help businesses assess and identify vulnerabilities within their supply chain,” he said. “We recommend businesses consider diversifying their suppliers, and when engaging new suppliers, do so with quality control front of mind, as poor-quality supplies could lead to future complications.”
He also highlighted the necessity of understanding the organisations within the supply chain to ensure compliance with sustainability targets. This includes evaluating supplier financial health, location, transportation methods, and affiliations.
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The report also addressed additional risks, such as higher interest rates, which have dampened new building activity and increased labour and material costs, and a significant rise in skilled labour shortages since the pandemic.
“The Australian construction sector is facing a mix of challenges and opportunities that are reshaping how the industry operates. Cultivating a culture of preparedness is essential for navigating this rapidly evolving environment. By understanding the emerging risks and opportunities, businesses can better position themselves for the years ahead,” Gleeson said.
Since 2019, QBE has seen a 130% increase in average claim sizes across contract works policies for construction companies, underscoring the need for businesses to carefully consider their insurance coverage as part of their risk management strategies.
“At QBE, we partner with our customers and brokers to not only identify and protect for their unique risks, but to develop tailored mitigation approaches and build resilience,” Gleeson said. “We encourage businesses to consult their insurance broker to ensure they have the right insurance coverage for their individual risks.”
The Australian Construction Sector Outlook report, prepared by Oxford Economics and Control Risks for QBE Insurance, can be accessed on the QBE website.
In other news from QBE, the insurance giant recently improved its claims support services by using lessons from the 2022 east coast floods and recent severe weather events.
