Construction All Risks
Since 2014, when the National Infrastructure Agency (ANI) launched the first wave of the fourth generation (4G) infrastructure projects, construction all risks insurance (CAR) has been mandatory for infrastructure concessions. As a result there has been an increase in the number of policies.
As 2018 is an election year there is a restriction on public tenders. As a result fewer projects are expected to be launched, therefore the dynamism of this class of insurance will be affected. While the situation could be compensated by private projects, these projects are usually smaller and fewer than the public ones.
Rates and premiums are expected to stay low due to the level of competition in the market and the abundance of capacity.
Again, the Colombian elections are expected to impact on construction activity and the number of new projects commenced. It is anticipated that this will have a flow on impact on the construction liability insurers.
Sophistication of the coverage available has improved. This has been driven by the increased understanding of the product by the clients locally and the effectiveness of the insurance following claims. Clients are demanding robust coverage to an international standard including terms and conditions tailored to the risk.
The domestic PI insurance market is small. As a result policies re often placed using the reinsurance market. This means prices are generally high, which remains an obstacle for this class.
Construction companies are only beginning to understand the benefits of this policy. A recent claim resulting from the bridge collapse in Chirijara has brought this type of insurance to the attention of the construction industry.
Motor, Plant & Equipment
The conditions for this kind of insurance have remained steady for the past year.
Claims are frequent but because of the amount of capacity and the number of insurance companies providing coverage, prices are low.
Obtaining coverage for car fleets of Concession Projects is more difficult as the vehicles are driven by the police and road officials. This increases the risk and changes the vehicle use - as a result capacity is lower and prices are higher.
New facilities have been negotiated increasing the available capacity and offering clients new alternatives and products at a very competitive price.
The domestic market has both the capacity and appetite to offer the global coverage required to meet clients’ needs.
The market is operating at different rates dependant on company structure and ownership.
For privately owned companies, pricing remains steady with sufficient capacity and robust policy coverage available at a fair price.
The situation is not the same for public entities. Serious and frequent claims are affecting the willingness of insurers to provide coverage. Not only is the price is increasing but some insurance companies are declining to provide coverage for public entities.