Organisations that embed risk management and insurance considerations at the earliest stages of project development are far better positioned to safeguard profitability and minimise costly disruptions, according to a new report by global professional services firm Aon.
The findings come as large-scale infrastructure, renewable energy, and mining-related construction projects continue to expand across Africa, placing greater emphasis on proactive risk strategies.
“Insurance should not be viewed as a procurement exercise that takes place shortly before construction begins,” said Philip Cronje, Business Unit Manager at Aon South Africa. “Risk management, contract structuring, insurance placement and claims planning should all form part of the project’s strategic planning process from the outset.”
Climate Risks Drive Demand for Resilience
Climate-related threats are emerging as a major concern for developers, contractors, and insurers. Extreme weather events — including flooding, storms, and droughts — have become more frequent across the continent, underscoring the need for resilient infrastructure design and construction.
Aon’s latest Climate and Catastrophe Insight report highlights these escalating exposures. In South Africa, severe weather events have already demonstrated their potential to devastate infrastructure and communities.
“The construction sector has a vital role to play in building resilience, but this requires careful planning, robust risk assessments and appropriate insurance structures,” Cronje noted.
Insurers are increasingly scrutinising natural catastrophe exposures, particularly for projects in high-risk zones. Organisations that can demonstrate strong risk mitigation measures are often better placed to secure more favourable insurance terms.
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Alternative Risk Transfer Gains Traction
The Global Construction Insurance and Surety Market Report also points to rising interest in alternative risk transfer solutions, such as captives and parametric insurance. These mechanisms offer greater flexibility for managing complex or hard-to-insure risks.
“For projects exposed to weather-related delays or other emerging risks, alternative risk transfer solutions can play an important role in strengthening overall risk financing strategies,” Cronje explained. “As projects become larger and more complex, organisations are increasingly exploring innovative approaches to risk transfer.”
Positive Outlook Amid Challenges
Despite ongoing challenges, the construction sector’s outlook remains positive. Infrastructure investment, the energy transition, digital transformation, and climate adaptation projects are expected to drive continued growth both globally and across African markets.
“The opportunities are significant, particularly in South Africa and across the continent,” Cronje concluded. “Success will depend on how effectively organisations identify, manage and transfer risk. Those that take a proactive approach to risk management will be best positioned to capitalise on growth opportunities while protecting project performance and long-term profitability.”
