Demand for Infrastructure Fuels Growth of International Construction Projects – InsuranceNewsNet

InsuranceNewsNet

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home
Topics
  • Life Insurance
  • Annuity News
  • Health/Employee Benefits
  • Property & Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Content
  • INN Exclusives
  • Newswires
  • INNsider
  • INN Exclusives
  • NewsWires
  • Magazine
Sign in or register to be an INNsider.
  • INN Exclusives
  • NewsWires
  • Magazine
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Susbcribe

Get Social

  • Facebook
  • Twitter
  • LinkedIn
Insider
 Archive: 
Order Prints Share
January 19, 2015 No comments Views: 13

Demand for Infrastructure Fuels Growth of International Construction Projects

Sponsored By

By Magaly Olivero
AIG

Rising demand for transportation and energy infrastructure around the globe has spurred an increase in the volume of international construction projects. Click here to view our infographic now.

This trend similarly increases the opportunities and exposures of property owners, architects, engineers, contractors and manufacturers from nearly every continent.

“In order to compete, companies need to start expanding their presence abroad,” said Matthew Schardt, multinational energy and construction casualty leader at American International Group Inc. The global construction industry is growing at unprecedented levels. “Companies that haven’t gone international yet must have it on their radar,” he said.

Increased complexity stemming from these large, multinational construction projects has necessitated world-class risk management solutions. More global projects mean more risk. It’s more important than ever for construction firms to engage with providers that can help them make informed decisions about the protection they need locally and abroad.

Global insurance organizations such as AIG provide an array of products and can adapt coverage to address a client’s multinational needs.

Emerging markets command attention

Rising populations, mass urbanization and fast-paced development in emerging markets are fueling demand for improved infrastructure and construction services.

According to the World Economic Forum, global infrastructure demand is $4 trillion annually. In less than a decade, emerging markets have gone from posting a third of the world’s construction work to just over half the industry’s total revenue. Industry experts predict that in the next decade nearly two-thirds of all construction activity will occur in these rapidly developing nations.

Leading the way is China, home to seven of the world’s 20 largest global construction firms. China’s urban populations are due to increase by more than 300 million by 2030. The mass migration of people to cities has created a robust demand for transportation, housing, energy and other infrastructure projects.

Advertisement

“A lot of what is driving construction growth in China is the fact that they are spending up to 12 percent of their gross domestic product on infrastructure,” Schardt said.

Even countries with smaller populations, such as Malaysia, are investing in state-of-the-art infrastructure and seeking expertise from outside vendors to gain what Schardt calls “value for money.”

“They want a strong product and strong return on their investment, so they’re looking for whoever can provide the greatest value for their citizens,” he said. “That knocks down some of the borders between countries and makes it a competitive environment for all contractors to bid abroad.”

Crossing international borders

Large domestic firms have become subcontractors to multinational companies that operate across borders. Production is taking place in numerous countries. A project’s supply chain can involve multiple nations. Some firms bring their own workforce to support large-scale projects in Africa, Latin America and the Middle East.

Examples of the interconnectedness of these global projects are plentiful. Consider the Makka (Mecca) transportation project in Saudi Arabia, where a Chinese construction company excavated and laid the tracks, a German firm built the power supply system, and a New York design firm owned by a British corporation consulted on engineering and construction.

“Projects are no longer bound by borders,” Schardt said.

Managing risks on a global scale

Schardt believes that the pace of global construction projects will continue to increase. “With this tremendous need to upgrade infrastructure occurring all over the world,” he said, “we are just at the beginning of a very big and ongoing trajectory of growth.”

Global construction projects pose risk management challenges. Many issues stem from complying with local tax and regulatory environments – as well as from cultural norms – that can vary greatly across countries.

“AIG can provide local coverage and on-the-ground resources to meet the unique needs of our clients, wherever their next construction project takes them,” Schardt said.

“The future of many businesses lies in their global capabilities,” Schardt said. “But you need to manage that risk sustainably in order to participate on that global scale. Above all else, companies are interested in protecting their workers and keeping them safe.”

Advertisement
Older

Insurance Choices for Multinationals Vary

Newer

Demand for Infrastructure Fuels Growth of International Construction Projects

Advisor News

  • How The Joe Biden Presidency Could Impact Your Money
  • Financial Planning Confessions Of A Bull Market Genius
  • The Salvino Wealth Management Team Launches RIA With $2.2B In Assets
  • Real Estate Sales Are Booming; Estimated To Exceed $160B In 2021
  • Millennial Money: Crafting Smarter Money Goals In 2021
More Advisor News

Annuity News

  • Jackpot Winner In $730M Powerball, None In Mega Millions
  • Million-Dollar Lottery Ticket Sold In Atlantic City
  • North Dakota Best Interest Rule Passes Key House Committee
  • Schwab Introduces Two Custom-Built VAs
  • New York Life Launches IndexFlex VA
More Annuity News

Health/Employee Benefits

  • Employees: We Want Greater Benefits Security And Reduced Costs
  • Biden’s COVID-19 Plan: Masks, Testing, More Vaccine Supplies
  • Amazon Offers Assist With US COVID-19 Vaccine Distribution
  • COVID Vaccine Scams: Here’s How They Work And What You Should Do
  • Florida Surgeon General: Senior Vaccines The Way Ahead
More Health/Employee Benefits

Life Insurance

  • Judge Tosses Lawsuit Accusing MetLife Of Defrauding Investors
  • Trump Pardons Ex-GOP Leader At Center Of Greg Lindberg Bribe Case
  • Life Insurance Fraudster Among Those Given Clemency By Trump
  • McKinsey To Insurance: Get Younger, Get Digital And Get Flexible
  • Despite Commutation, California Man Denied Parole For Murdering Wife In 1980
More Life Insurance

Topics

  • Life Insurance
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire

Top Sections

  • Add Press Release
  • INN Exclusives
  • Full Online Magazine
  • INN Insider

Our Company

  • About
  • Editorial Staff
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2021 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • Sitemap
  • AdvisorNews

Sign in with your INNsider Account

Not registered? Become an INNsider.