After a year of progress, the construction industry faces a challenging outlook for 2025. Analysts from the Brazilian Chamber of the Construction Industry (CBIC) forecast a growth of 2.3%, a figure that accounts for almost half of the strong 4.1% increase posted in 2024[1]. How, however, does this impact the insurance market?
The straightest answer revolves around typical insurance contracting in this industry, such as Performance Bonds and Engineering Risk Insurance, taken out by contractors and construction companies. This logic has impacts throughout the chain, also influencing insurance related to real estate financing.
On the other hand, we should note that, despite the construction statistics pointing to a slowdown, the sector is still on an upward path – already surpassing the level reached immediately before the pandemic. In other words, construction remains a breeding ground for business opportunities for insurers. This is an essential industry in a country that continues to expand demographically, as shown by data from the last Census carried out by the Brazilian Institute of Geography and Statistics (IBGE), published in 2024. There was a 4.68% increase[2] in the number of inhabitants compared to the 2022 Census. It is worth noting that more than 30% of the Brazilian population resides in large cities, with more than 500,000 inhabitants, which leverages the continuous demand for infrastructure and housing[3].
Opportunities become even more promising when we consider the significant amount of unfinished works. In the public sector alone, there are more than 21,000[4] stalled projects. In this scenario, Performance Bonds stand as an instrument of considerable public and social interest, ensuring the completion of these works, meanwhile representing a relevant source of revenue for insurers. According to data released by the National Federation of General Insurance (FenSeg), the insurance market currently accounts for 26% of the domestic public debt, involving amounts beyond the BRL2 trillion mark.
Although it is an industry with a high potential for profitability, the risks underlying the civil construction are not burdened by the same volatility as other types of insurance. Proof of this is that, in 2023, Performance Bonds added up to only 1.4% of the total claims paid by insurers. In turn, Susep data[5] indicate that Performance Bonds grew 20%[6] in the volume of premiums from 2023 to last year, reaching the mark of BRL2.4 billion.
Security
Despite a more restrained optimism regarding the growth of construction compared to last year, the industry remains an interesting niche for insurers – which, in turn, remain as the backbone of economic viability and expansion of construction activities. More than sharing values such as stability, security, and building the future, the synergy between industries facilitates mutual growth and the establishment of their respective positions in the market.
[1] Source: https://cbic.org.br/cbic-projeta-crescimento-de-41-para-a-construcao-civil-em-2024-mas-desafios-persistem-para-2025/
[2] Source: https://noticias.uol.com.br/ultimas-noticias/deutschewelle/2024/08/29/populacao-brasileira-cresce-468-e-chega-a-2125-milhoes-de-habitantes-diz-ibge.htm
[3] Source: https://agenciadenoticias.ibge.gov.br/agencia-noticias/2012-agencia-de-noticias/noticias/41111-populacao-estimada-do-pais-chega-a-212-6-milhoes-de-habitantes-em-2024
[4] Source: https://cnseg.org.br/noticias/setor-segurador-e-alternativa-para-garantia-de-obras-de-infraestrutura-no-brasil
[5] Source: https://www.poder360.com.br/governo/seguro-garantia-bate-recorde-e-arrecada-r-43-bilhoes-em-2023/
[6] Source: https://valor.globo.com/publicacoes/especiais/seguros-previdencia-e-capitalizacao/noticia/2024/05/29/contratacoes-de-seguro-garantia-em-ritmo-acelerado.ghtml
Autor: Sergio Luiz Bernardelli Junior • email: sergio.bernardelli@ernestoborges.com.br
