Regional update
Pacific
Insurance landscape
Last year saw an increase in capacity from existing insurance markets, heightened appetite, and the arrival of new entrants, while messaging around underwriting scrutiny and challenges in construction insurance remained static.
Despite inflationary pressures in 2025, adjusted capacity remained below its 2017 peak. Notwithstanding these developments, underwriting scrutiny continued, and catastrophe-exposed locations, along with high-risk sectors, presented significant challenges.
While rates saw some downward pressure, terms and conditions generally held steady. Reductions were typically observed on more straightforward risks, whereas larger and more technical risks maintained stable terms.
Contract works
Increased capacity and insurer appetite were observed, particularly for project-specific placements without natural catastrophe exposure, and rate reductions of between 5% and 10% on annual placements. This was welcomed by insureds following an extended period of increased premiums, reduced coverage, and higher retention levels.
Insurers remained particularly concerned about water damage, largely due to extensive claims activity, which led to increased premiums and, in some cases, sub-limited or restricted coverage. In response, some clients explored the use of automatic water detection systems as a risk management measure to mitigate the threat of internal water damage.
Underwriters asked more questions and sought data-driven responses regarding historic claims activity and loss patterns, and typically required higher level approvals for large or complex risks.
While the number of lead insurers remained limited for high-risk and/or high-value projects, or those with construction periods greater than 36 months, following capacity was more readily available and turnaround times were generally under 72 hours.
Construction liability/ Casualty
The construction liability market remained positive for organizations, with both local and overseas insurers offering coverage. This was particularly evident in the excess of loss segment, where capacity and appetite notably increased. Primary insurer capacity was also available, supported by a diverse range of insurers seeking to participate in this sector.
Despite this positive outlook, the market faced challenges from rising workers’ compensation losses, including an increase in psychological injury claims. These claims were a concern for underwriters, as they contributed to higher overall loss ratios and increased claims volatility. Insurers closely monitored these trends and appeared to adjust their underwriting approaches in response.
While the construction liability space benefited from high levels of insurer competition and capacity, the ongoing rise in workers’ compensation and psychological injury claims underscored the need for continued vigilance. Insurers and firms alike should remain proactive in risk management and claims mitigation within this evolving market.
Professional indemnity
The construction insurance market saw insurers generally offering more favorable terms and increased capacity, particularly in primary liability and professional indemnity lines.
Clients who demonstrated a proactive and strong risk management approach generally benefited from these underwriting trends. Insurers remained cautious on accounts with deteriorating claims experience and on natural catastrophe-exposed portfolios.