Building together

Automation is making repairs and rebuilds more efficient, while collaboration is also helping to tackle construction industry challenges

By Jan McCallum

Time was when a building damage claim was made, assessed and passed to the builder. But that dynamic has changed as players in the repair and rebuild space have begun working more collaboratively.

Cost pressures, more complicated rebuilds and trades shortages have all contributed to a more complex construction environment, and industry players say they are coming together to find solutions.

Bay Building chief executive Matthew Dusting says it is a different market now compared with when the company began.

“When we started 40 years ago, it was just about repairing damage. Now we are navigating statutory building obligations, insurance policy boundaries and customer expectations – and doing all that responsibly and transparently.”

He has seen the relationship between builders and insurers evolve, noting they have become much better at sharing information and solving problems together.

“In our meetings with insurers, we are always exploring better ways to perform the service, with the customer at the centre. If we see this as an ecosystem where we are working together, we will get a better customer outcome.”

Knowledge and relationships have become more valuable as cost inflation, labour shortages and now geopolitical risk make even straightforward jobs more time-consuming and expensive.

These are issues Lockton’s Pacific head of claims Jeff Williams does not expect to end soon.

The collapse of some home construction groups has taken trades from insurance work as builders are pressured to finish off projects, he says.

“All this is flowing straight into underwriter claims costs. We’re seeing the impacts on loss run reports, claim records … quotes that six months ago would have been seen as OK, now [they are] asking to be reissued.

“We’re seeing variations come through, or in some cases these quotes being abandoned in their entirety and new trades having to come on-site to conduct damage repairs.”

The result is that clients perceive inaction on their claims as builders try to schedule repairs around tradie shortages and the onslaught of work arising from this year’s storms and flooding.

“It’s been a really significant challenge for my team and we’re carrying a disproportionate share of pressure as brokers. Clients are seeing these delays and cost disputes and then naturally turning to us and our claims advocacy,” Mr Williams says.

In this environment, the broker’s role is evolving beyond co-ordination to strategic advisory, helping clients navigate uncertainty and make more informed decisions across the claims life cycle.

Insurers are responding to the challenges with a multipronged approach.

“Following recent regulatory reviews into claims handling, we have strengthened our collaboration with our partner builders by standardising our expert report templates, developing clearer evidentiary requirements, and implementing consistent scope-of-works documentation,” a Suncorp spokesperson told Insurance News.

In tackling the trades skills shortage, the insurer is engaging with representative bodies such as the Queensland Building and Construction Commission, Master Builders and Construction Skills Queensland.

A more integrated relationship has enabled the mapping of capacity hotspots in critical trades such as roofing, solar and plastering, the spokesperson says.

The insurer also flags joint opportunities to encourage trade enrolments and insurance repair education for trades, and how it can assist in advocating for career opportunities related to insurance.

As insurers’ construction expenses have increased, they have put downward cost pressure on suppliers, which are looking to technology to gain efficiencies.

Bay Building has worked to connect its systems with insurers, so it can transfer information quickly and gain higher-quality information for conversations with customers, “so we can get people’s lives back on track”, Mr Dusting says.

The substantial investment enables the company to scale up and provide repeatable standard services.

Bay Building has also begun to implement AI for estimating.

“You need a certain scale to do this and we have a whole team that works on technology and business improvement. They focus on doing things better, and due to our size, we can invest more in that,” Mr Dusting says.

Technology has played a significant role in improved claims handling, with efficiencies in digital platforms and remote assessments bringing gains, according to Suncorp, which is incorporating AI-driven scoping, an integrated repair platform and real-time repair updates.

Lockton’s Mr Williams says technology has helped in the claims process, aiding lodgement, communication, summation of reports and supporting decisions.

But he maintains insurance is still a very human business.

He finds underwriters are now more open about sharing their technology platforms and there is greater consistency from data standards and managed repair frameworks. “They’re becoming more consistent across underwriters, particularly the larger players.”

Along with cost inflation, the perennial issue of underinsurance is growing.

Builders see this when repairs cannot restore older properties to their pre-loss conditions and require more work to meet the National Construction Code.

“It may be hail damage to a roof, and the policy covers having the roof replaced, but when we take the roof sheets off we see the old roof is non-compliant to the latest code,” Mr Dusting says.

A rebuild to the code will deliver a more resilient property, but some of the work may not be covered by insurance – news the customer is not expecting.

Transparent communication and collaboration between insurers, builders and insureds will avoid delays, disputes and cost blowouts, and is where long-term industry relationships come into play.

“These days, it’s about more than just doing a repair or reinstatement. These can be difficult conversations to have with customers,” Mr Dusting says.

Suncorp says delays in local government permit approvals are further inflating costs and recovery time frames.

“Rebuilds for our commercial customers face challenges around scale and complexity, often involving specialised construction methods, multiple contractors and co-ordination across architects, engineers and project managers,” the spokesperson says.

On older buildings, meeting modern safety and accessibility standards adds a layer of design difficulty that can extend repair timelines.

Commercial customers need to restore operations to avoid business interruption, adding pressure to co-ordinate rebuilds efficiently while meeting regulatory and safety requirements.

Brokers are coming under pressure from clients, and Mr Williams says they have become much more “hands on”, chasing up clients’ cases and managing expectations in a difficult environment.

He sees this advocacy as a strong selling point for Lockton.

“We are talking to underwriters about whether there are trades that can do this work faster. Is there a different way that we can schedule repairs to at least get sites open?

“And that’s driven a really strong sense of collaboration between us as claims advocates with our clients, with trades and underwriters.”

He has seen a shift over the past six to 12 months to greater collaboration, particularly around claims systems and efficiencies. “Insurance, brokers, adjusters, service providers, they actually are communicating better than they ever have.”

But there are still players who adopt an “insurer as enemy” approach, according to Lockton head of construction Peter Jeeves, who says this can stall claims.

“We can’t look at each other as enemies. We have to say, ‘OK, how do we work collectively to get the right result?’ ”

Early contractor engagement and realistic scoping are critical to ensuring projects remain viable and can be delivered within budget and time frame, he says.

Reputation counts: customers expect their brokers to understand how the connections work between the insurer, builders and trades.

Lockton has hired claims advocates, including loss adjusters and claims experts, from insurers and brokers with property, energy and construction backgrounds.

Mr Dusting says builders doing insurance work have had to become service providers to customers and insurers, and there is a cost to that.

The collaborative approach is improving speed, visibility and consistency at a time of great challenges in insurance building work.

As pressures persist, organisations that prioritise early engagement, transparency and co-ordinated risk management will be better positioned to manage claims outcomes and control long-term costs.

Mr Williams says: “There’s greater awareness that information-sharing actually makes us better.

“The collaboration is real, it’s growing, but now we’re managing complexity rather than eliminating it.”

Mr Dusting looks forward to the trend continuing, saying builders must anticipate what is coming by way of regulatory change, construction obligations and insurer expectations.

It is important for the construction industry that insurers share direction from parliamentary inquiries, so builders can evolve too, he says.

When insurers respond to changes in the General Insurance Code of Practice, “we need to make sure that we are responsive, and aligned to that”.