SYDNEY, 2 June 2026 - Aon plc (NYSE: AON), a leading global professional services firm, has released its 2026 Global Construction Insurance and Surety Market Report, finding that residential construction, defence investment and data centre development are driving growth in Australia, while skills shortages and rising input costs continue to challenge project delivery.

Australia started 2026 with high levels of construction activity, supported by housing demand, government-backed defence programs and accelerating investment in digital infrastructure such as data centres.

Projects Grow More Complex Across Asia Pacific

Across Asia Pacific, construction activity remains resilient, supported by sustained investment in infrastructure, the energy transition and digital assets. Projects are also becoming larger and more complex, with potentially greater exposure to delay and governance risk.

“Asia Pacific continues to be one of the most active regions for construction,” said Terence Williams, head of Commercial Risk for Asia Pacific at Aon. “Hyperscale data centres, battery and semiconductor plants are driving demand for higher-value, more complex builds with extended timelines and greater delay exposure. Insurers are placing greater focus on how projects are governed and how data informs risk decisions.”

Insurers are increasingly differentiating projects based on factors such as governance, the quality of risk information and how exposures are managed across the construction lifecycle, reflecting the scale and complexity of developments across the region.

Olympics and Skills Shortages Heighten Workforce Risk

In Australia, preparations for the Brisbane 2032 Olympic and Paralympic Games are expected to increase construction demand across Southeast Queensland. Major transport works, venues, accommodation and urban renewal projects will place additional demand on an already constrained construction workforce.

“Australia’s construction pipeline remains strong across residential, defence and technology-related projects, but labour availability is a real pressure point,” said Mary-Catherine Hamill, head of construction for Australia at Aon. “In the lead-up to the Brisbane Olympics, competition for skilled workers is expected to intensify across major infrastructure, specialist trades and professional roles, increasing cost pressure and the risk of project delays.”

The report notes insurers in Australia are placing greater emphasis on how workforce shortages, rising labour costs and extended project timelines are managed, particularly for large and complex developments, as these factors influence claims risk, delay exposure and insurance terms.

Regulatory Change Expected to Influence Insurance

Regulatory change in New South Wales is also adding a new layer of complexity for construction stakeholders. From 1 July 2026, proposed updates to the Design and Building Practitioners Act 2020 are expected to extend regulatory coverage to repair, alteration and renovation work on existing Class 3 and 9c buildings and may introduce professional indemnity insurance requirements for building practitioners.

While final settings remain subject to legislative outcomes, the changes are likely to increase focus on whether appropriate insurance capacity and risk frameworks are in place to support builders in meeting regulatory requirements.

Surety Demand Rises as Contractors Seek to Free Capital

Surety demand is rising as contractors manage balance sheet pressure from higher material, fuel and supply chain costs. According to the report, surety bonds are increasingly being used as an alternative to traditional bank guarantees, allowing construction firms to free up capital tied to projects.

“With project values increasing and supply chain costs remaining elevated, contractors are looking for ways to preserve liquidity,” Hamill said. “Surety is playing a larger role in Australia as businesses seek to unlock working capital without constraining bank facilities, particularly on large infrastructure and defence projects.”

Insurance Capacity Remains Available for Well‑Managed Risks

The report highlights that Australia’s construction insurance market continues to attract strong capacity, with robust local participation and increased appetite from London markets, resulting in competitive terms for well-managed risks.

Insurers are also showing a favourable view of technology and defence-related projects, including data centres and advanced manufacturing facilities, reflecting Australia’s focus on critical infrastructure and national security investment.

About the Report

The 2026 Global Construction Insurance and Surety Market Report examines global, regional and local trends across construction property insurance, professional liability, casualty insurance and surety. The report provides insights into pricing, capacity and insurer appetite to help construction stakeholders in Australia navigate a complex risk environment.

For further details, see the full 2026 Global Construction Insurance and Surety Market Report.

About Aon

Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries with the clarity and confidence to make better risk and people decisions that help protect and grow their businesses.

Follow Aon on LinkedIn, X, Facebook and Instagram. Stay up-to-date by visiting the Aon's newsroom and sign up for news alerts here.