New QBE report highlights supply chain risks and mitigation opportunities for construction sector
QBE Insurance today announced the release of its Australian Construction Sector Outlook report, outlining the economic uncertainty facing the industry, and the need for proactive risk management to help navigate these emerging challenges.
The report explores supply chain resilience as a key theme, with disruptions from the global pandemic, ongoing international conflicts and trade disruption, and resultant delays all heightening the importance of contingency planning.
Dale Gleeson, General Manager of Elders Insurance and Heavy Industries, QBE Australia Pacific, said staying informed about geopolitical developments and exploring alternative procurement strategies can help businesses better mitigate against supply chain risks, and reduce the frequency and impact of interruptions.
“Global supply chain disruptions are likely to continue, so understanding the structure and geographic concentration of suppliers can help businesses assess and identify vulnerabilities within their supply chain,” Mr Gleeson said. “We recommend businesses consider diversifying their suppliers, and when engaging new suppliers, do so with quality control front of mind, as poor-quality supplies could lead to future complications.”
“We recommend businesses have a solid understanding of the organisations in their supply line to support adherence to sustainability and compliance targets. This includes understanding crucial factors such as supplier financial health, location, transportation methods and affiliations.”
Additional risks identified in the report include higher interest rates, which have lowered business revenues by dampening new building activity, increasing labour and material costs, and a doubling of skilled labour vacancies following on after the COVID-19 pandemic.
“The Australian construction sector is facing a mix of challenges and opportunities that are reshaping how the industry operates. Cultivating a culture of preparedness is essential for navigating this rapidly evolving environment. By understanding the emerging risks and opportunities, businesses can better position themselves for the years ahead.”
Since 2019, QBE has seen a 130% increase in average claim sizes across Contract Works policies for construction companies, demonstrating the need for businesses to closely consider their insurance coverage as part of their risk mitigation strategies.
“At QBE, we partner with our customers and brokers to not only identify and protect for their unique risks, but to develop tailored mitigation approaches and build resilience,” Mr Gleeson said.
“We encourage businesses to consult their insurance broker to ensure they have the right insurance coverage for their individual risks.”
To read the Australian Construction Sector Outlook, prepared by Oxford Economics and Control Risks for QBE Insurance, please visit the QBE website: https://www.qbe.com/au/news/australian-construction-outlook
For more information:
Emily Connell
Senior External Communications Specialist
QBE Australia
+61 422 907 484
Email: emily.connell@qbe.com