Builder’s risk insurance is quietly being reshaped by three forces at once, according to Kaycie Cook, president of Builder’s Risk for DUAL North America: stalled construction projects, stubbornly high loss ratios, and a generational changing of the guard across the industry.
Construction site (Credits: Insurance Journal)
Cook, who has spent more than 20 years in the sector — a decade of it on builder’s risk — laid out the factors on the eve of the IRMI construction conference.
Project Stagnation: Tariffs and Delays Stretch Timelines
Submissions for builder’s risk policies are up, but the time from quote to bind has stretched far beyond the old 90-day norm. Uncertainty is the culprit: tariffs and geopolitical disruption are snarling supply chains from China and the Strait of Hormuz, while Canadian lumber tariffs have pushed prices up roughly 50%, prompting builders to delay starts in hopes the tariffs ease.
Some delays are strikingly specific. The global rush to build data centers has created a five-year lead time for combined-cycle turbines, Cook notes — meaning any contingent business-interruption loss tied to that delay could be, in her words, potentially catastrophic.
Loss Ratios and a Generational Shift in Builder’s Risk
Even in a soft market with surplus capacity, loss ratios are running high. Builder’s risk claims land months after policy inception, and project delays stretch that lag even further — so underwriters need discipline today for consequences that may not surface for years. Arson remains a significant contributor, with NIMBY-related attacks reported in places like Salt Lake City and Aurora, Colorado, even as some carriers have trimmed security requirements.
The third force is generational: a wave of younger brokers and underwriters is bringing fresh thinking — including clever uses of AI — and reinventing relationship-building, from cooking classes to yoga sessions. But Cook warns newcomers that today’s capacity surplus will not last, and advises building stable carrier partnerships for the long term: underwriting, she says, remains a people business.
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Source: Insurance Journal — read the full story there.
