Singapore faces rising insurer scrutiny on construction risks, Aon says

Asia Pacific is still amongst most active construction region.

Singapore and the wider Asia Pacific (APAC) region are facing increased insurer scrutiny around construction governance, catastrophe exposure, and project complexity, amidst structural shifts in the global construction insurance market, according to Aon plc.

Aon said insurers are placing greater emphasis on risk governance, data quality, and project controls as construction activity becomes more complex, particularly in infrastructure and digital asset development.

The firm noted that globally, the construction insurance market is moving away from a prolonged hard cycle, with increasing competition and rising capacity contributing to softer pricing conditions in many segments.

However, underwriting discipline remains in place for natural catastrophe-exposed and technically complex projects.

It added that Singapore is part of a regional trend where insurers are increasingly focused on high-value, technology-driven developments such as hyperscale data centres and semiconductor facilities, which carry higher delay and operational risk exposure.

Aon’s head of commercial risk for Asia Pacific Terence Williams said Asia Pacific remains one of the most active construction regions globally, with insurers paying closer attention to governance frameworks and how data supports risk decisions.

Aon’s head of construction and infrastructure for Asia Vincent Banton said insurers are increasingly prioritising projects with clear governance structures and defined risk ownership, particularly for complex infrastructure developments.

Globally, Aon said the construction sector continues to benefit from investment in digital infrastructure, power generation, and other critical assets, even as risk conditions become more demanding.

It added that the global surety market is expected to grow by around 5% annually in the coming years, supported by adequate capacity for strong credits and competitive pricing in most major markets.

Aon said contractors and project owners are increasingly adopting data-driven approaches to project selection and risk management, alongside improved scheduling, cost control, and climate resilience planning.

The report also cited estimated global economic losses from natural disasters of about $332.82b (US$260b) in 2025, underscoring ongoing volatility in the sector.