First, we should get this out of the way. The current COVID-19 pandemic is like nothing the US economy has ever experienced, and we can only begin to imagine how it will affect the construction and insurance industries, let alone our personal lives. So, without a complete understanding of how the situation may play out, we’ll be discussing the current conditions for insurance renewals. And the situation for construction isn't a good one. We’re in a hard market.
What, exactly, does it mean to be in a “hard market?” First, it’s part of a cycle. Many decades ago, the insurance market ran in relatively predictable cycles, alternating between soft and hard. Those regular cycles, though, disappeared in the late 1980s. That was the last time we experienced a similarly hard insurance market.
In a hard market, rates increase and claims adjusting becomes much more strict. Rate increases are typically driven by higher losses for insurers, especially when they start to outstrip the premiums they’re collecting. In addition, hard markets are often characterized by reduced capacity, meaning that insurers aren’t willing to provide the same coverage that they had in the past, and some may leave certain lines of business entirely.
(Photo courtesy of 2018 ENR Photo Challenge)
We’re definitely seeing sharp rate increases and reduced capacity, both of which are coming on the heels of a five-year trend of growing losses for insurers. As a result, it’s a difficult time for general contractors to renew their insurance at the same rates they’ve become accustomed to. Insurance policies can account for as much as 10% of a project bid, and with rates increasing by 5 to 10%, construction firms need to present a strong case during negotiations in order to secure insurance at the low end of rate increases, keeping them competitive. Insurers are scrutinizing risk very closely right now.
We believe Smartvid.io can help play a role in your negotiations. Let’s take a quick look at how each of our solutions improves the chance of our customers securing competitive rates on their General Liability policies by tangibly demonstrating an enhanced level of attention and care.
Smartvid.io Safety Monitoring uses AI to identify safety hazards in site images, which are then analyzed for subtle signals of safety risk to score projects on safety performance.
Smartvid.io Safety Observations leverages mobile tools such as smartphones and tablets to empower anyone on a job site to make safety observations and start conversations with craft workers about safety. Customers who have fully adopted it have reduced their OSHA recordable incident rate by up to 28%.
Smartvid.io Predictive Analytics provides weekly rankings of each of the firm’s projects according to the level of risk and likelihood of a recordable incident taking place in the near future. As a result, construction management can take measures to prevent accidents before they occur. Firms that have implemented predictive analytics have seen up to a 60% reduction in OSHA recordable incident rate.
We didn’t pull those numbers out of thin air — they’re based on the real-world experience of firms using these technologies. So insurers, take notice! If your rates are intended to reflect risk, construction firms that use advanced, proven technologies to lower that risk should receive a lower rate!
Construction firms shouldn’t hesitate to ask us for assistance as they engage in renewal conversations with their insurers. We can provide support to demonstrate the tangible safety risk reduction that Smartvid.io provides.
Are you a current customer or an insurer looking for information on Smartvid.io’s ability to reduce risk? A construction firm that’s interested in using AI and advanced technology to improve safety? Get in touch!