Mega losses are now about three times the size of those observed in the previous three years. Indeed, 12% of the largest losses of the past 30 years occurred between 2023 and 2024.
色多多视频 and reinsurance coverages are vital enablers of the largest and most complex engineering and construction projects in the world. Risks are evolving and the sophistication and financial value of many projects is increasing all the time.
The International Association of Engineering Insurers, known as the IMIA, is a global network of engineering insurance experts. Each year, it produces four indices, including one that captures the movement of engineering insurance rates from a base point in 2010.
The data collected for this rate-change index is anonymous and weighted according to the size of the book of business that the individual companies that contribute underwrites. The data covers the range of coverages for both engineering projects and operational lines of insurance business, including construction and erection risks and the operational risks in specific sectors, like power plants and heavy industries.
I had the great honour, in my role as leader of the IMIA’s Data and Statistics sub-committee, of presenting the most recent statistics for the first three quarters of the year at IMIA’s annual conference in Madrid. The indices are powerful tools for underwriters to help understand trends and reflect upon risk appetite.
Mega losses on the rise
The index showed that the number of ‘mega losses’ is on the increase. The IMIA defines a mega loss as one which is excess of $30 million from the ground up.
According to the index data, mega losses are now about three times the number observed in the previous three years. Indeed, 12% of the largest losses of the past 30 years occurred between 2023 and 2024.
The average size of a mega loss has increased between seven and eight-fold over the last 15 years, according to the index data. Losses caused by natural catastrophe losses have followed a similar pattern.
In addition, the IMIA indices show that loss ratios for operational losses are much higher than they have been at the same stage in previous underwriting years, illustrating the impact that losses are having.
Overall, the indices showed rates for engineering coverages, for both construction and operational phases, have continued to rise on average in 2024, although at a slower rate then they did in 2023.
Large and complex projects
One reason for the increasing size of losses is the magnitude and complexity of many of the engineering projects and operations that insurers and reinsurers now cover.
The sheer size of a project, like a renewable energy facility, coupled with the new and emerging risk areas involved in getting such a project off the ground, means that sums insured have increased rapidly in many cases.
Added to that, some of these very complex engineering projects can take several years to complete and sites are often much larger than they previously were.
The scale of the sums insured in many such projects mean that claims can potentially run into tens of millions of dollars in many cases.
The risk environment is changing
The severity and nature of weather-related events is evolving all the time and unprecedented natural catastrophes are affecting many lines of reinsurance, and this now includes engineering and construction lines:
The historic floods that hit the United Arab Emirates in April this year were a dramatic example of how an out-of-the ordinary weather-related event can result in outsize losses specifically in this line of business.
Dubai, the most populous city in the region, suffered its heaviest rainfall since records began when a cluster of four large storms hit and the data showed that construction and engineering projects were impacted.
As with nat cat exposures, many engineering and construction projects may face increased risks associated with supply chains, particularly in the case of highly complex and specialised projects.
Building the future
Insurers and reinsurers are working closely with their clients to understand this evolving risk picture and the challenges and opportunities of emerging technologies and projects around the world.
Data, like that included in the IMIA indices, are an incredibly powerful tool for underwriters to gain deeper knowledge about global industry trends which affect underwriting decisions.
This increasing knowledge enables us to better support our clients as they navigate the changing risk environment.
