Despite the challenges facing construction business owners over the past year, Nationwide’s most recent Agent Authority research findings show 84% are optimistic about the strength of the upcoming peak season.
With this anticipated increase in business, agents have an opportunity to proactively reach out to business owners, creating a foundation for strong, long-term relationships. It’s a transitional and transformational time for construction business owners, here’s what our research findings show you need to know.
COVID-19 revealed a need for improved business planning
Like many other industries, the construction industry battled direct and collateral effects from COVID-19 with 70% of owners negatively impacted by the pandemic, according to our Agent Authority research. Impacts were felt through total revenue, ability to bid on new projects and their workforce headcount – all highlighting the need for increased planning.
- More than 1-in-5 business owners lacked plans to help their businesses operate through economic uncertainty:
- 27% didn’t have proper plans in place to successfully navigate project site shutdowns/re-openings.
- 24% didn’t have a business plan to account for a potential recession.
- 23% didn’t have enough employees or subcontractors to meet project demand.
Opportunity: Now is the time to emphasize the importance of business planning in preparing for the unexpected. Showcase how to prepare for operational changes, new exposures and implement plans to protect against future threats as the industry rebounds, such as increased cyber or COVID-related liability exposures. MyLossControlServices.com offers virtual services, guidance for developing business continuity plans, and share-able resources to control exposures, such as strategies for protecting idle construction projects, preventing falls from heights, or dealing with effects of extreme weather patterns.
Owners are moving ahead amid challenges and uncertainty
Most construction business owners – nearly 90% – changed their operations for business continuity or increased efficiency due to the impacts brought on by the pandemic.
This included accelerating new strategies or re-evaluating areas of their business. In many cases, the tightening labor market has also forced them to relax screening criteria for new hires with about 70% saying they have, will or may relax new hire screening criteria or drug testing practices to account for a lack of qualified candidates.
Amid all these changes, 85% have changed at least one of their insurance policies, but three-quarters are still worried about having the right policies in place to protect their business.
- Half of business owners engaged their agents over the last 12 months to review one or more of their insurance policies for the business, including:
- Discuss their coverage (54%)
- Create a business plan to address COVID-19’s economic impacts (51%)
- Improve their business’s safety and loss control efforts (50%)
- Business owners shared strong interest in receiving more resources and guidance from their agents, including:
- Regular policy reviews (46%)
- Information on the latest trends in their industry (43%)
- Updates on cyberthreats and cybersecurity measures (36%)
Opportunity: Help construction owners understand the impacts evolving operations may have on their coverage or risk management needs. Nationwide’s Commercial Insights helps agents stay up-to-date on complex industry trends and offers resources to educate clients on topics like the importance of finding good subcontractors or benefits of creating an effective risk transfer program.
Now is the time to build relationships
Our findings show construction owners have a high level of trust for their agents, many reported leaning on their agents to guide them through these challenging market conditions and 89% of construction owners trust their insurance agent’s guidance and feel they can build a relationship over time. By opening a dialogue now to hear business needs and share expertise and counsel in the short-term, you can build stronger long-term relationships to be prepared to implement that counsel when construction owners are confident their business will improve.