Exploring advanced technologies in engineering insurance

Highlights

• Introduction
• Role of advanced technologies in upgrading engineering insurance
• Key product launches

Engineering insurance offers financial shielding for physical damage to equipment, third-party liabilities, unpredicted events that impact or disrupt engineering projects, and cost overruns due to project delays. It offers protection for high-value projects in the engineering industry, ensuring seamless operations in challenging circumstances and protecting stakeholders from financial losses. It comprises a diverse range of claims designed for prevalent hazards in these industries, such as construction risks, machinery breakdown, issues generated from engineering activities, and project delays.

The global engineering insurance industry is anticipated to display a notable CAGR of 9.2% by 2032. This growth is attributed to regulatory compliance, global infrastructure development, and technological advancements.

How advanced technologies transformed the engineering insurance industry?

Risk assessment

Engineering insurance heavily depends on evaluating risks linked to different projects, structures, and technologies. With advanced technologies such as data analytics, machine learning, and predictive modelling, insurers enhance their understanding and quantification of these risks. By analyzing extensive data sets, they detect patterns, trends, and potential hazards, resulting in more precise risk assessments.

Simplified underwriting process

Advanced technologies empower insurers to streamline the underwriting process and make informed decisions. For example, remote sensing technologies such as drones and satellites evaluate property conditions and monitor construction sites, offering insurers real-time data for underwriting. Furthermore, sophisticated modelling tools aid insurers in evaluating the potential impact of natural disasters, climate change, and other external factors on engineering projects.

Product development

Technological advancements have catalyzed innovation in insurance claims developed for engineering risks. Insurers have introduced novel coverage options customized for emerging technologies such as renewable energy, smart infrastructure, and cyber-physical systems. These products cater to evolving risks and provide comprehensive protection for engineering projects and assets.

Data Analytics

Advancements in camera technology and unmanned aerial vehicles (UAVs), commonly known as drones, enable regular and detailed surveillance of ongoing construction activities and site security. Internet-enabled sensors installed on buildings and equipment, including wearable devices, automatically capture and transmit data to a central platform. This facilitates frequent and systematic monitoring of atmospheric conditions, concrete setting, structural load, displacement, and other relevant parameters.

Frontrunner's strategies to strengthen the industry position

The global engineering insurance industry is dynamic, and top players have adopted strategic alliances to sustain the competitive industry. These strategic alliances involve new product launches, collaborations, mergers, partnerships, and acquisitions.

For instance, Hutch Underwriting launched an annual construction insurance policy on EBIX Sunrise Exchange on June 16, 2023. This policy features a standard cyber section and aims to shield Australia's construction industry from the increasing threat of cybercrime. It offers flexible options, enabling brokers to customize coverage according to their client's requirements and financial constraints. Coverage includes protection for existing structures, display homes & their contents, plant & equipment, care custody & control, pollution liability, as well as adjustable sub-limits and excesses.

HSB, a specialized insurer in technology and engineering, introduced two new products on its e-trade platforms in the UK in March 2022. This launch expanded the range of e-trade offerings for brokers. These latest products, accessible via HSB's proprietary trading portal called HSB Fast Track and Acturis, aim to simplify the process for brokers to handle engineering inspection and equipment failure.

The inspection services product of HSB, facilitated through a network of engineer assessors, offers businesses regular engineering inspections to adhere to relevant health and safety regulations. In addition, the technology and machinery combined product of HSB provides insurance coverage for equipment failure. This product is developed to include inspection services, offering customers comprehensive equipment protection.

To conclude, the global engineering insurance industry has witnessed transformation due to infrastructure development across the globe, regulatory compliance, and advanced technologies. However, emerging risks and cyber threats are expected to offer remunerative growth opportunities for the industry in the upcoming era.

To kickstart your engineering insurance business with investment opportunities and novel strategies, contact our experts today!

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