Marsh, the world’s leading insurance broker and risk advisor, has released its 2025 Construction Risk Report, offering fresh insight into how evolving risk dynamics are reshaping the global and African construction industry. For South Africa, the findings highlight a critical imperative: infrastructure projects must become more bankable, insurable, and resilient to attract much-needed private sector investment.
The reports, which combine financial disclosures from 70 of the world’s largest contractors and survey feedback from over 230 firms globally, show an industry at an inflection point. Inflation, supply chain instability, contractual complexity, and climate risks are transforming how projects are designed, financed, and insured.
“In South Africa and across the continent, we’re seeing a fundamental shift: risk is no longer something to mitigate at the end; it’s now central to getting projects funded, insured, and completed,” says Odett van Jaarsveld, Practice Lead at Marsh Africa.
Construction contributes 13% to global GDP and supports nearly 8% of the world’s workforce. Yet across both developed and emerging markets, projects are facing tighter margins, higher scrutiny from insurers and lenders, and increased pressure to deliver resilience.
In Africa, this matters more than ever. Infrastructure is a pillar of economic recovery and growth but poor project preparation, weak governance, and insurability gaps are stalling delivery. In response, project owners are increasingly turning to specialist risk advisors and insurance brokers early in the lifecycle to secure capital, de-risk execution, and assure delivery.
Key findings from the 2025 report
- Top risks cited by contractors: inflation (28%), material costs (16%), contract and bidding complexity (13%), talent shortages (11%), and growing cyber and regulatory threats.
- New insurance trends: Increased use of specialist products such as LEG 3 cover and Single Project Professional Indemnity (SPPI), albeit with tighter terms, sub-limits, and increased documentation requirements.
- Insurers demanding earlier engagement: Underwriters expect robust data on subcontractors, climate exposure, fire safety, and cyber readiness before backing large projects.
- Surety pressure: Guarantee markets are tightening, especially in South Africa, where smaller firms are struggling to meet the evolving standards of capital providers.
A South African Lens: Infrastructure and Insurability
In the lead-up to the 2025 Sustainable Infrastructure Development Symposium (SIDSSA), South Africa has committed to a pipeline of over 200 bankable projects and improved preparation mechanisms. But accessing private capital will require more than a good plan. Projects must now be insurable, with rigorous contingency plans, climate risk scenarios, and technical transparency.
“Insurers are increasingly acting as gatekeepers. If a project doesn’t meet risk standards, it may never reach financial close. We’re helping developers structure risk from the outset, because without risk-readiness, projects can’t move” adds van Jaarsveld.
The Climate Factor and Beyond
Nearly double the number of respondents now cite climate change and sustainability as top concerns compared to 2019. In South Africa, the implications of extreme weather, emissions targets, and decarbonisation are driving new costs and reshaping project design. Meanwhile, cyber threats and digital exposure are growing as construction goes high-tech.
Despite the challenges, opportunity abounds. With Africa’s infrastructure deficit running into hundreds of billions of dollars, unlocking investment means de-risking early, communicating clearly with lenders and insurers, and designing for resilience, not just scale.