May 2025 Edition

Resilience Under Pressure: Construction & Engineering Insurance in Transition

South Africa’s engineering and construction insurance sector is being tested under intense pressure but remains remarkably resilient.

Our compilation of expert insights, featuring voices from Consort, SHA, Bryte, Firedart, Unison, and COVER, paints a dynamic portrait of a sector adapting to change while anchoring national development.

Chris Charlton (Consort) compares the industry’s resilience to a concrete cube strength test, where economic strain, political uncertainty, and rising input costs have not resulted in collapse, but rather revealed the market’s core strength. Buoyed by government’s R1.03 trillion infrastructure allocation and a push toward clean energy, recovery is underway, with a projected 3.5% growth in 2026. Brokers and insurers must now align offerings to emerging needs, particularly cyber and digital risks.

Koketso Shabalala (SHA) adds that while challenges like skills shortages and project delays remain, upcoming PPP and renewable energy projects are creating demand for innovative underwriting. Solutions that retain premiums in the local market, like modular public liability and non-cancellable long-term policies, are enabling both large and SME contractors to participate in growth opportunities.

Zain Hoosen (Bryte) outlines a shifting underwriting landscape shaped by cybercrime, climate volatility, and technological evolution. He emphasises the need for data-powered underwriting, advanced catastrophe modelling, and urgent skills development to mitigate a looming talent drain.

Prisha Bhoola (Firedart) highlights a quiet but significant transformation: the rise of decentralised, fast-moving, tech-driven projects. This trend necessitates deeper technical underwriting expertise, collaborative training for brokers, and a contextual understanding of South Africa’s infrastructure risks. Adaptability, not tradition, will define success.

Lucien Mundie (Unison) underscores the vital role of construction guarantees in promoting trust and market access. These instruments not only de-risk projects but enable smaller contractors to scale, foster professionalism, and attract investment. Legal developments now reinforce their enforceability and independence.

Finally, Tony van Niekerk (COVER) explores the critical role of Contract Works, Comprehensive All Risks (CAR) insurance amid a volatile environment. Risks such as underinsurance, project mismanagement, criminal syndicates, and renewable energy complexities call for policy innovation, broker collaboration, and smarter underwriting.

Together, these perspectives urge the industry to evolve beyond legacy practices, embracing agility, partnerships, and innovation to shape a stronger, more inclusive future.