Construction industry showing signs of recovery: Aon

Over the past year, for the lines of coverage reviewed, the construction industry has averaged single-digit rate decreases, Aon reported in its 2009 Construction Industry Report.
Overall, the construction companies surveyed by Aon appeared to have maintained their retentions.
For umbrella/excess liability, the average limit purchased by construction companies is US$82 million. The highest limit purchased was US$400 million, while the lowest limit purchased was US$4 million.
Forty-two per cent of construction companies surveyed reported having an active captive or Protected Cell Company. The most common coverages currently underwritten are general/third party liability, property and professional/errors and omissions liability.
“Of particular interest is that 33% of construction companies surveyed report that they intend to use a captive to underwrite environmental/pollution coverage over the next five years, up from 0%,” the report says.
Sixty-six per cent of the construction industry respondents reported having a formal risk management department.
Senior management’s intuition and experience was the primary method cited for identifying the construction company’s major risks. Methods for assessing risks was split between “intuition and experience” and “business unit quantitative analysis,” Aon found.