Building the Backbone: Risk, Resilience and Capacity for Asia’s Rail Construction Boom

A World-leading Rail Project Pipeline Carries More Risk

“Asia currently has a rail project pipeline worth about USD 3.0 trillion, out of nearly USD 6 trillion globally”. Based on a discussion at Aon’s Asia Construction and Infrastructure Conference 2026 this article examines where rail project risk across APAC, the losses underwriters are paying attention to, and what can improve insurability for construction project owners and investors.

According to MEED, the global rail project pipeline is close to USD 6 trillion, with Northeast Asia and South Asia together accounting for over USD 3 trillion of schemes. Vincent Banton, Head of Construction and Infrastructure for Aon in Asia, notes that China’s high-speed network alone accounts for more than 70% of the world’s high-speed rail lines.

“Metro and light rail projects generally are able to obtain consistent capacity from insurance markets, particularly in mature regulatory environments such as Hong Kong and Singapore,” he says. “High-speed rail, on the other hand, is more challenging, partially due to higher exposure from phase integration and commissioning risks.” Insurers are also inclined to be more cautious in offering capacity in countries including Indonesia, Malaysia and Vietnam. Underwriters will pay close attention to the project track record of overseas contractors operating in these markets.

Vincent’s insights reflect a local insurance market that is risk selective across the rail project pipeline, which requires project owners to consider how they can make their case for insurability and competitive cover. “Strong project sponsors, experienced contractors and robust risk management are being rewarded with more competitive terms from insurers,” says Banton. “Projects with a less mature set of stakeholders and risk profile can expect less attractive premiums and terms from the market.”

What Drives Rail Project Losses and Claims

Losses triggered by water — whether through flooding or triggering another secondary loss such as collapse, erosion or landslide — are the most common loss driver across rail projects in the region, according to Brendan Dunlea, Regional Head of Underwriting at QBE. “Geotechnical and landslide risk are closely linked, with hilly terrain and heavy rainfall combining to produce some of the largest rail claims underwriters have seen in the region,” he says. “Theft and third-party liability losses are minor as single events, but together they can limit the premium pool available to pay for larger claims, leaving less capacity in reserve when a major loss happens.”

Testing and commissioning is the highest-risk phase for rolling stock, particularly on high-speed rail, where systems are becoming more technically advanced with each new generation of train. “A derailment during testing and commissioning on an active line in Taiwan prompted underwriters to start excluding cover for testing-phase risk on certain projects in Asia,” says Dunlea, as an example of the type of hazard that is shaping capacity and risk preferences for insurers in the region.

A Unique Risk Profile for Linear Rail Construction

Corridor alignments can run for hundreds of kilometres across rail projects producing extremes in ground conditions, weather zones and topography within a single project. “Borehole spacing and ground testing density become a cost trade-off over very long alignments” says Banton. “Without comprehensive ground investigation, projects can often experience losses during excavation, installation, commissioning and operation due to unexpected changes in conditions.” Insurers are aware of this risk which is resulting in concerns that make conversations about cover more complex. “One rail project crossing three separate fault zones in New Zealand was exceptionally difficult to underwrite given the scale of variability involved,” says Banton.

Serial defects introduce an additional linear project risk. Once installed, defective components can replicate along the track, increasing risk exposure from a single design or manufacturing error. “Galvanised support posts on a linear project in Australia produced a large-scale serial defect loss when the component was installed multiple times across large sections of the alignment,” says Dunlea.

Integration across packages and phases adds further complexity to the risk picture. A 500km alignment could involve multiple contractors and subcontractors, creating potential for accountability gaps at the interface between each one. Together with defect, weather and geological risk across such a long footprint these transitions can contribute to compounded, multi-hazard losses that are more difficult for underwriters to review using historical data alone.

Engage Early to Support Better Insurance and Claims Outcomes

Early engagement between project owner, broker and insurer produces better outcomes rather than leaving risk assessment and transfer until construction is underway. “Multiple parties and multiple policies are best managed through a well-structured wrap-up program,” says Banton. “This can be contractor-controlled or owner-controlled, depending on the project profile and the types of risk considered. An owner-controlled wrap-up can support common claim protocols and consistent policy wording across the different contractor and subcontractor packages working on a single alignment.”

“Geotechnical uncertainty can be addressed through a structured project risk register, mapped across the full project lifecycle,” adds Dunlea. “Underwriters frequently request these registers but do not always receive them.” Together, a robust risk register and a well-structured wrap-up program are key risk management strategies for supporting insurability, funding and overall success of rail construction throughout the project lifecycle.