Zain Hoosen, Bryte Insurance: Engineering Specialist
Engineering insurance has undoubtedly played a crucial role in South Africa’s infrastructure development, providing financial security and fostering growth in major projects, including the Gautrain, Eskom power stations, FIFA World Cup stadia and the evolving Sandton skyline. Its resilience and profitability have made engineering insurance attractive, drawing new entrants and strengthening competition. In the last decade, we note the inauguration of at least five new engineering underwriters.
The industry’s robust knowledge and skills base—supported by reinsurers, insurers, brokers and consultants—has driven local growth and expanded its learning and technical expertise across Africa. Institutions like the South African Insurance Association (SAIA) and South African Association of Engineering Insurers (SAAEI) continue to play a pivotal role in skills development, helping to ensure that professionals in the field stay abreast of changes in the field and are well-equipped to handle complex risks. The combined efforts of all the above interested parties helped to develop and produce an era of par excellence engineering underwriting on the continent.
However, amidst success and resilience, a challenging environment is rapidly evolving—the market waits to see how these developments will shape the future of engineering underwriting. The perfect storm of emerging threats reshapes the risk landscape, and the engineering insurance industry is beginning to feel the heat. Emerging risks such as cybersecurity threats, climate change, supply chain disruptions, skills shortages, political and social unrest, economic instability, and rapidly advancing technology are already impacting claims and livelihoods. Each of these forces presents unique challenges, but it’s their interconnectedness that further complicates matters.
Cybersecurity—the increasing frequency and severity of cyber threats and ransomware attacks have significant implications for the insurance industry. The potential consequences of these attacks can be far-reaching, such as a compromised critical installation. Deliberate breaches resulting in bypassing overcharging protection in a solar battery storage facility or overriding speed protection controls on a wind turbine are highly plausible scenarios impacting the claims and underwriting profitability. Cyber event identification and investigations require a blend of forensic skills, which is arguably in scarce supply and can be costly.
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Climate change intensifies natural catastrophe (NatCat) events, leading to significant insurance losses, particularly in civil engineering and renewable energy risks. The frequency and severity of these events have surged, with insured NatCat losses rising. This trend underscores the fundamental need for advanced NatCat modelling, data intelligence, and portfolio steering to adapt and support underwriting to climate risks. The ability to assess insured locations with high granularity enhances risk selection and ensures precise underwriting whilst managing exposure effectively. Insurers face heightened risks without such technology, threatening business profitability and sustainability. NatCat modelling engines provide insurers with high-resolution risk assessments, improving risk selection, pricing accuracy and long-term profitability.
Skills shortage—the engineering insurance industry is grappling with the looming retirement of a golden generation of senior underwriting experts, thereby losing institutional expertise, experience, and knowledge. This loss will undoubtedly create a complex void to fill, which poses a significant challenge to the industry. Loss adjusting and claims processing are indeed crucial to the underwriting process. Similar skills shortages in these areas can lead to delayed claims settlements, increased costs and decreased customer satisfaction. Companies will struggle to maintain services and prudent underwriting. Failure to address these issues could result in loss of competitive edge, operational inefficiencies, increased regulatory risks and difficulties in customer retention, jeopardising the long-term sustainability of businesses. However, the ongoing upskilling efforts of the various stakeholders are encouraging. Businesses should prioritise and invest in skills development, mentorship programmes, succession planning and talent retention. Embracing a skilled and youthful talent pool will likely drive innovation and succession planning and enrich agility, business continuity and efficiency.
Technology leaps—The insurance industry is indeed data-intensive, and technology is radically transforming the sector, notably through Artificial Intelligence (AI) and Robotic Process Automation (RPA). Access to these technologies is driving significant process efficiencies. AI is revolutionising the way insurers analyse and utilise data. Automating the underwriting process with AI-powered tools can significantly streamline the quoting process. These tools can auto-populate risk forms by quickly scanning and analysing large amounts of data. On the other hand, Robotic Process Automation (RPA) is a game-changer in an industry where the key differentiator is service levels. Through the automation of repetitive tasks, RPA enables underwriters to streamline processes and improve productivity.
By leveraging technologies and digital tools, underwriters can improve data accuracy and productivity and enhance the customer experience.
Conclusion
Underwriting is crucial to the insurance industry, requiring a delicate balance of risk assessment and expertise. Effective underwriting involves technical skills, strong collaboration, and access to a range of tools. The landscape has shifted from process-driven to embracing a data-powered underwriting evolution. The insurance industry’s traditional underwriting practices, which may have been effective in the past, are no longer sufficient to address today’s complex risks. The rapidly evolving nature of these threats demands a shift in the underwriting approach—this might involve innovative insurance products, specialised underwriting expertise, cutting-edge risk management strategies, and leveraging advanced data analytics and other digital tools to understand better and assess price risk.
To stay ahead of the curve, engineering insurers must think outside the box and develop new approaches to policy design, underwriting and claims management. Clients are expected to play an important role in risk participation in place of risk transfer.
Through innovative risk mitigations, the risk protection partnership will translate into proactive risk management, reduction in losses and downtime and greater profitability and sustainability for the industry and country.
Editor’s Thoughts
Engineering insurance has long been the quiet enabler behind South Africa’s most ambitious infrastructure projects—yet today, it stands at a crossroads. As Zain Hoosen aptly outlines, the landscape is no longer shaped solely by concrete and steel but increasingly by data, cyber threats, and a rapidly shifting climate. The future of engineering underwriting will depend not just on technical expertise, but on agility, innovation, and a commitment to developing the next generation of specialists. The article is both a wake-up call and a roadmap—urging insurers, underwriters, and industry stakeholders to adapt before disruption becomes disintegration.
Are we equipping the next generation of engineering insurers with the tools, skills, and mindset they need to thrive in a risk environment we’re only beginning to understand?