The rise of the megaproject: Why construction’s new scale demands more from brokers and carriers

📊 Insurance News Analysis: Our editorial team has analyzed recent developments from insurancebusinessmag.com in the Insurance sector. This report covers key insights related to car insurance, life insurance, health insurance and emerging industry trends that professionals should monitor closely.

The Insurance landscape is evolving, with recent reports indicating notable changes. By Gia Snape
The global construction industry is entering an unprecedented era of megaprojects: multi-billion-dollar builds that stretch over years, span continents, and test the limits of human expertise and supply chains. With record infrastructure spending, explosive growth in data center construction, and new demands from the energy transition, construction risk has never been more complex or more collaborative. Experts told Insurance Business that the new scale of global construction is reshaping how risk is managed, priced, and shared among stakeholders.

“Just three or four years ago, billion-dollar projects were rare,” stated Douglas Schrift (pictured on the left), global head of infrastructure at Liberty Mutual. “Now we see multiple projects of that size every month, and they continue to grow.”
Schrift pointed to a surge of activity driven by energy transition projects, airports, roads, dams, and especially the boom in data centers needed to power AI and digital infrastructure. According to McKinsey & Company, global capital expenditures on>WTW cited third-party bodily injury claims and design-build/alternative project delivery as the leading factors behind a continuing trend of severity claims on roads and highway/infrastructure projects. “A bodily injury claim today can cost two or three times what it did five years ago,” stated Aldo Fucentese (pictured on the right), senior vice president and chief underwriting officer for the construction practice.

“Third-party litigation funding and aggressive advertising by plaintiff attorneys are driving nuclear verdicts. That cost burden ripples across the entire insurance system.”
According to the Liberty Mutual specialists, the insurance market is responding to persistent challenges with heightened scrutiny and disciplined capacity deployment, especially for property risks tied to catastrophic (cat) exposures. While casualty pricing remains competitive for projects like data centers, property capacity is tightening, said Fucentese. “A $10-billion (data center) project needs enormous capacity.

No single market can take that on, so it’s typically written on a quota-share basis across multiple carriers,” he explained. “Capacity is generally available unless the site is in a catastrophe-prone area.”
Cyber and technological risks are also emerging as critical considerations, especially in data center builds. Insurers are still grappling with how to assess and allocate liability for data loss, service interruption, or security breaches following construction completion.

“If something happens after completion and data is lost, who is liable? How is that risk transferred?,” Fucentese stated. “It’s an evolving area.”
As construction project size and complexity grow, both executives agreed that the key to effective risk management lies in intentional collaboration among contractors, brokers, and insurers.

Evidence suggests that that philosophy underpins Liberty Mutual’s creation of its global infrastructure solutions practice, led by Schrift, in September. The practice brings together underwriting, risk engineering, and claims experts to deliver customized solutions for large, complex projects. Data shows that “We don’t want a brushstroke approach; it’s about being surgical,” Schrift explained. “We’re building deeper relationships with customers to tailor solutions that meet their specific needs and risks.”
Fucentese added that while data center construction is currently the hottest segment, the company is mindful of maintaining balance.

“Some contractors are even walking away from billions in data center work because they don’t want to overextend resources or neglect other clients,” he stated. Sources indicate that “This boom won’t last forever.”
Both leaders underscored that the era of megaprojects demands a holistic, lifecycle approach to risk spanning design, construction, operation, and decommissioning. “These projects require visibility across all stakeholders, and the sooner partners are brought into the conversation, the better. Sources indicate that this is especially important as the landscape shifts,” stated Schrift.

“Relationships and expertise will matter more than ever.”

Experts suggest this represents a significant moment for the Insurance sector, with implications extending beyond immediate stakeholders.

— Based on reporting from insurancebusinessmag.com

💡 Key Industry Insights

The insurance industry is adapting to changing risk profiles and customer expectations in a digital-first environment.

Specifically regarding best insurance, market observers note continuing evolution in service delivery, pricing models, and customer engagement strategies that merit close attention from industry stakeholders.

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Analysis Note: This comprehensive overview synthesizes current market intelligence from insurancebusinessmag.com regarding life insurance and related sectors. Stay informed about ongoing developments in this rapidly evolving landscape.