— 3 min read
Data-Driven Insurance: How Builders Improve Coverage & Cost
Last Updated May 15, 2024
In the ever-evolving and increasingly complex construction industry, proactive risk management is no longer optional — it’s a necessity. To stay ahead in this dynamic environment, insurers need to leverage the most comprehensive and precise data available. In fact, risk data has transitioned from a desirable asset to an essential component of construction insurance.
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Data is equal parts challenge and opportunity.
A significant challenge in the construction industry is managing the enormous volume of data each project generates. According to a 2020 FMI report, a staggering 96% of generated data goes unused, leaving decision-makers to rely on guesswork or instincts. However, by analyzing data on fully integrated platforms, we can replace paperwork and spreadsheets with tech-driven, actionable insights.
The advent of data has revolutionized several industries, and construction is no exception. A McKinsey report revealed that data-driven organizations are 23 times more likely to acquire customers and six times as likely to retain them. By harnessing data, construction insurance providers can deepen their understanding of project risks and create bespoke solutions for their clients.
Data is essential to risk management.
Increasingly, contractors are acknowledging the vital role of risk data in effective risk management. I’m convinced that construction insurance providers should employ this data to paint a comprehensive picture of their clients’ risk profiles. This way, they can offer coverage precisely tailored to the unique challenges each project presents.
Utilizing project data from their construction management platform empowers contractors to illustrate the steps taken to mitigate risk. Access to your risk data enables better representation, leading to more favorable terms for project insurance. For instance, Procore customers on average save 30% on premiums with Procore Risk Advisors, thanks to the use of their construction-specific data and insights.
Data is an insurance negotiation tool.
Smart risk data is rapidly becoming a competitive differentiator in construction insurance. One of the major advantages of using risk data in construction insurance is the enhanced capacity for brokers to negotiate superior terms for customers. With data that accurately reflects a construction company’s risk profile, brokers can secure more favorable insurance terms. Consequently, construction businesses can enjoy broader protection and coverage at more competitive rates.
The influence of data on the construction industry is palpable. By leveraging data, construction insurance providers can offer more efficient and cost-effective solutions.
Big data is a game-changer in the construction insurance industry. It enables providers to develop more accurate risk profiles, create tailored solutions, and deliver superior value to their clients. As the construction landscape continues to evolve, harnessing data and advanced analytics for risk management is more crucial than ever.
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Written by
Ryan Famularo
Ryan Famularo is the Head of Growth at Procore Risk Advisors, a division of Procore Technologies. He has over 15 years of experience in the construction industry, including AGC of America and other commercial construction organizations. Ryan is passionate about using technology to improve the construction industry and is committed to helping Procore Risk Advisors become the leading provider of risk management solutions for the industry.
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