Interest from London underwriters is lifting competition in the Australian construction property insurance market, according to Aon.

“Capacity in the Australian contract works insurance market remains robust, with strong local participation even following some recent insurer consolidation,” the broker says in a report.

“The market is further underpinned by increased engagement from London insurers, whose growing appetite and line size on Australian placements continue to reinforce overall capacity and support competitive terms for well-presented risks.”

In Queensland, building activity is expected to remain strong as the state prepares to host the 2032 Olympics and Paralympics.

Aon expects the Games to generate a “substantial uplift in construction project activity … Accelerated investment in transport infrastructure, venues … urban renewal and supporting social infrastructure will create a deep, multiyear pipeline of work and materially expand opportunities for contractors in major works, specialist trades and ancillary services.”

In professional indemnity, some construction professions and activities continue to experience greater scrutiny, according to the report.

“These include property developers, certifiers and valuers, mining consultants, surveyors and those involved in design and manufacture,” the Global Construction Insurance and Surety Market report says.

“Projects involving water-related risk (desalination), rail and rolling stock, high-rise buildings, renewables and processing plans are among those attracting more scrutiny.”

Globally, construction activity is growing, with digital infrastructure, power generation and other critical assets creating a pipeline of large-scale projects.

“Climate risk, extreme weather and ageing assets are also heightening demand for the construction of resilient infrastructure,” the report says.

“Insurers and regions remain well capitalised and growth oriented, and market conditions, while varying by region and risk class, remain favourable for well-managed risks.”