Aon Report Highlights Growing Demand for Construction Insurance in India
According to the report, large-scale infrastructure projects, urbanisation and investments in advanced manufacturing are sustaining strong demand for construction insurance across India. The market continues to remain growth-oriented, supported by increased underwriting capacity, insurers' expansion strategies and favourable reinsurance conditions.
However, as project pipelines expand and asset values increase, insurers are placing greater emphasis on risk assessment and project governance. The report notes that natural catastrophe exposure, project execution challenges and delay-related risks are becoming increasingly important considerations for insurers and developers alike.
Aon said the evolving risk landscape is prompting insurers to focus more closely on early-stage risk evaluation, particularly for larger and more complex projects. Strong project governance, robust risk management practices and proactive mitigation measures are becoming critical factors in securing insurance coverage and managing project risks effectively.
“India remains a dynamic and rapidly expanding construction market within the Asia Pacific region,” said Sushant Sarin, head of strategy and Commercial Risk in India for Aon. “Large-scale developments face a range of natural hazards, including floods and earthquakes, with increasing focus on robust risk management from the outset. To navigate these challenges, businesses must invest in strong project governance, transparent data and realistic delay assumptions, while engaging with insurers early to manage costs and risk.”
Key Construction Risks in India
Technology‑led construction is emerging as a major growth area across the region, particularly in data centres, semiconductor plants and advanced manufacturing facilities, including cell, wafer, ingot and battery production. These projects require higher power capacity and present more complex risk profiles, driving demand for tailored underwriting solutions.Climate risk is also a growing challenge for India’s construction and infrastructure sector, driven by the convergence of extreme heat, flooding and rapid urban development.
Flooding or heat‑related disruption to power, transport or logistics networks can create cascading impacts, delaying construction timelines and affecting long‑term asset performance.
Insurer scrutiny intensifies across Asia Pacific
Across the Asia Pacific region, construction activity remains resilient, supported by ongoing investment in infrastructure and the energy transition. The construction insurance market has softened, with insurers increasing focus on catastrophe modelling, construction quality controls and contractor resilience, particularly in peak hazard zones and for technically complex works such as underground construction and energy infrastructure.“India’s construction market continues to present significant opportunity,” said Nisheeth Srivastava, head of construction and infrastructure in India for Aon. “The sector is benefitting from sustained public infrastructure investment, new technology investment, energy transition and a highly competitive insurance market. Strong insurer appetite and improving reinsurance conditions are creating opportunities for project owners and contractors to secure broad and cost‑effective coverage, particularly when risks are well understood and actively managed.”
The report also highlights steady growth in the India surety market, as infrastructure investment accelerates and regulatory capital requirements make surety an attractive alternative to traditional bank guarantees. As a result, surety is becoming an increasingly valuable tool for project owners and contractors to optimize capital, manage counterparty risk and support delivery of India’s long‑term infrastructure pipeline.
Published on:
09 June 2026
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