Over the last couple of decades, the construction industry has experienced a significant transformation. It has moved from a primarily manual, paper-based, low-bid environment to a highly digitalized and sophisticated sector. This evolution has been fueled by technological innovations, ongoing challenges such as labor shortages and supply chain disruptions, and the growing complexity and scale of projects.
Recognizing how the industry was changing, AXA XL made a strategic decision fifteen years ago to create a dedicated Construction vertical business unit. The goal was to better serve an industry in rapid evolution, with specialized expertise and tailored risk solutions that could anticipate and address its unique challenges.
This proactive move reflected AXA XL’s understanding that construction’s complexity was expanding far beyond traditional boundaries. Standardized, one-size-fits-all insurance solutions were no longer sufficient. Instead, the industry needed a partner capable of understanding its evolving risk landscape and providing proactive risk management strategies, which prompted the creation of a specialized construction team. This focus positioned AXA XL as a leader in construction insurance and provided a market advantage by enabling us to develop deeper industry insights, innovative coverage options, and integrated risk engineering services tailored specifically for construction clients—areas where others struggle with and attempt to recreate such a tailored and insightful approach.
Although my tenure here is just over a year, I was fortunate to join a highly talented and seasoned team, many of whom have been with AXA XL’s Construction team from the very beginning. Their experience and expertise are invaluable assets in helping clients adapt to the rapid changes within the industry. To understand where we started and how far we’ve come, I called on some of our longstanding team members to share their thoughts. While everyone agrees that significant changes have occurred since this team was formed, our core mission -- to put the client first and improve the industry -- remains unchanged. Here are their observations.
Megaprojects are a much bigger slice
Meredith Baron, Executive Underwriter, Construction Primary Casualty
The construction industry is increasingly driven by billion-dollar mega-projects. When our team first launched, it would be a rare for us to see a $1 billion project come across our desk, now it’s an everyday occurrence. Industry stats support our observations. According to ConstructConnect, some $197 billion of megaprojects began in 2025, representing about 25% of nonresidential construction spending. In 2020, these large-scale projects represented just over 5% of nonresidential construction.
The growth of megaprojects significantly affects primary casualty coverage in construction by increasing risk complexity and scale. These large projects involve multiple stakeholders, longer timelines, and higher asset values, leading to potentially more claims and different coverage needs. We’ve needed to adapt our policies and underwriting to effectively address these unique exposures. As these mega-projects become the new normal, we know we have to keep adapting and thinking ahead to make sure we're protecting our clients every step of the way.
Tackling the talent crunch with more vigor
Ann Marie Snyder, Senior Underwriter, Construction Primary Casualty
When skilled labor is hard to find, it often leads to delays, quality concerns, and increased safety risks. Workforce shortages continue to be a big challenge for the industry, but what’s been really encouraging, over the past decade or so, is how the industry has responded.
Companies are investing in innovative retention and training programs, and they’re really pushing to build a strong safety culture. Facing these risks head-on, instead of avoiding them, has become a key part of how the industry is trying to improve. We’ve been committed to supporting these efforts by providing enhanced risk management and safety program guidance and training initiatives as part of their coverage solutions. As technology continues to evolve, digital tools and automation are also playing a growing role in improving efficiency and reducing reliance on more scarce labor. Construction leaders are combining new technology with their ongoing workforce initiatives to build more resilient and sustainable operations, and we’re proud to support their journey.
Building up resilience
Cheri Hanes, Head of Construction Innovation and Sustainability
One key observation is how the industry's mindset has shifted. It used to be mainly about controlling costs, ensuring quality, and meeting schedules. Now, there's a strong emphasis on sustainability, not just using greener materials or innovative construction methods, but building resilient businesses capable of adapting to market changes, regulations, and societal pressures.
To support this, we've expanded our services, including benchmarking tools. For instance, we now incorporate subcontractor scheduling and prequalification processes that evaluate sustainability credentials alongside safety and quality. We also provide technology assessments to help clients leverage digital tools for more sustainable and efficient operations, and contract review to help them make sure they do not take on extra liability. These tools give clients a clear view of their position relative to industry best practices and competitors. This helps identify opportunities for improvement. Our goal is to help clients stay ahead of emerging trends and keep their operations resilient in a rapidly evolving industry.
Recognizing how the industry was changing, AXA XL made a strategic decision fifteen years ago to create a dedicated Construction vertical business unit. The goal was to better serve an industry in rapid evolution, with specialized expertise and tailored risk solutions that could anticipate and address its unique challenges.
New ways of doing things brought new risks
Steve Stabilito, Underwriting Manager, Construction Professional
Over the years, the construction industry has changed a lot. Rising costs and labor shortages are pushing everyone to find more efficient, collaborative ways to deliver projects—think Integrated Project Delivery (IPD) and Progressive Design/Build. At the same time, projects are getting bigger and more complex, often pushing policy limits 2-3 times higher than when we first started.
Market conditions are also tougher -- less capacity in the A&E sector means project owners and design firms are shifting more risk onto contractors, often on less favorable terms. That’s why underwriting now focuses more on project details and contract terms, especially with faster schedules and tighter budgets.
As projects get larger, contractors face bigger risks -- especially with more design duties and digital tools like BIM. While BIM boosts accuracy and teamwork, it also opens the door to cyber threats and other risks that can halt projects, hit your bottom line, and lead to legal headaches. In today’s market, staying protected means staying ahead of potential risks.
Tightened Excess market:
Kevin McCormick, Senior Underwriter, Construction Excess Casualty
The excess market has tightened significantly over recent years, with capacity now much more limited. Ten or 15 years ago, it was not unheard of for a carrier to deploy $25M on a single layer. Today, most carriers will only deploy $5M - $10M, requiring many more carriers to build an excess tower.
Today, losses within the construction excess market are being driven by nuclear verdicts and social inflation. As a result, claims are now more likely to reach higher into the excess tower as opposed to be contained within the umbrella layer. Historically, umbrella coverage was referred to as 'sleep insurance.' It provided peace of mind for clients. They now have to worry about large liabilities more than ever. With claims getting more severe and capacity tightening up, having the right excess protection can really make a difference, helping contractors and clients stay protected from big liabilities and still giving them peace of mind in this challenging market.
Costs surged with social inflation’s impact
Amanda Hammett, Underwriting Manager, Construction Excess Casualty
In recent years, the construction industry has felt the sting of social inflation. We're seeing claims bigger than ever, sometimes into the hundreds of millions, driven by litigation funding and higher jury awards due to a societal attitude shift about corporate America. Jury awards above $10M are often referred to as “nuclear verdicts.” Awards that climb upwards of $100M, which are not unheard of, are labeled “thermo-nuclear.” These awards result in the erosion of contractor’s excess towers.
Auto liability is one of the biggest drivers of these losses. As the industry continues to evolve, we are looking for clients to reduce their auto liability risk by being proactive vs. reactive. Updating their driver training programs, boosting fleet safety and accident prevention initiatives can help over time. And through our tech partnerships, clients have access to risk-reducing technologies like telematics and dashcams that can provide supportive data when an accident occurs. By taking the initiative to leverage innovative risk management strategies, we can help our clients navigate the challenges of social inflation to protect their operations from these escalating claims.
Trending bigger, more complex
Greg Mason, Senior Underwriter, Construction Property
Builder’s Risk insurance is key in today’s evolving construction landscape. Projects are bigger, longer, and more complex, requiring early contractor involvement and shared risks. Values are now reaching into the billions, and where some projects are concerned, like data centers, the tens of billions.
To stay ahead in the evolving construction landscape, underwriters are adopting innovative approaches to Builder's Risk, leveraging advanced risk management strategies and creative solutions. For example, we were among the first in the market to deploy capacity for mass timber Builder’s Risk products, reflecting the industry's shift toward sustainable building materials. Additionally, we are seeing an increase in projects focused on integrating new energy resources, prompting the development of tailored coverage options to support innovative energy solutions.
New tech plays a big part in loss prevention now. While water damage has always been a significant loss driver, a number of available tech solutions have been developed to help mitigate this exposure today.
Something that has not changed in our 15-year history is the importance of sound, technical underwriters, coupled with a commitment to innovation as we adapt to technological advancements and market complexities. Disciplined underwriting has allowed us to grow through different market cycles. We look forward to continuing our growth alongside our clients.
