The shift to electric transport will also require investment in new plants and battery manufacturing facilities, as well as charging infrastructure and power generation. Ford alone has committed to $11bn [3] investment in new plants. Huge investment is also required to make buildings more sustainable and lower greenhouse gas emissions. According to the International Finance Corporation [4] (IFC), green building in emerging markets represents a $24.7trn investment opportunity by 2030.

Climate change adaption and mitigation will also give rise to opportunities for the construction sector. Rising sea levels and increased risk of flooding will require new coastal and flood defenses, as well as sewage and drainage systems. Commercial buildings and plants may need upgrading to protect assets from storms and floods, while ageing infrastructure will need to be upgraded to cope with more extreme weather events.

Infrastructure is forecast to be the fastest growth sector for construction with annual average growth of
5.1% [5] globally during the period from 2020 to 2025, driven by unprecedented levels of government stimulus. The US has passed a $1.2trn infrastructure bill while the EU has agreed a €723bn Recovery and Resilience Facility. However, given government borrowing during the pandemic, public sector and infrastructure investment is likely to see an increasing need for Public Private Partnerships (PPPs).

This boom in global construction will, however, present challenges for the construction and engineering sector, and their insurers. In the medium term, sudden surges in growth could put supply chains under additional pressure and exacerbate the existing shortage of skilled labor. Longer-term, huge investments in green energy will mean larger values at risk, while the rapid adoption of unproven technology, building methods and materials will require close co-operation between underwriting, claims and risk engineering, as well between insurers and their clients.