Global Engineering Insurance Market Analysis and Regional Insights
- EverBright Actuarial
- Jul 31
- 5 min read
The global engineering insurance market is poised for significant expansion, driven by surging infrastructure development, industrialization, and the need for risk mitigation in complex projects.
According to Allied Market Research, the market was valued at $24.1 billion in 2022 and is projected to reach $56.7 billion by 2032, growing at a compound annual growth rate (CAGR) of 9.2%.
Alternative estimates suggest a 2023 value of $26.39 billion, expanding to $65.98 billion by 2033 at a 9.6% CAGR. Asia-Pacific (APAC) emerges as the fastest-growing region with a 12.4% CAGR from 2022 to 2032, fueled by rapid urbanization and government initiatives.
North America dominated in 2022, holding over one-third of global revenue due to its mature construction sector.
Global Market Overview
Engineering insurance covers risks associated with construction, installation, and operation of engineering projects, including damage to works, machinery breakdowns, and third-party liabilities.
Growth is propelled by increasing mega-projects, technological advancements in machinery, and heightened awareness of risk management.
Contractors All Risks (CAR) insurance led the market in 2022 with over one-third of revenue and is expected to maintain dominance.
Machinery breakdown insurance is forecast to grow fastest at a 12.8% CAGR from 2023 to 2032, driven by reliance on high-value equipment.
Year | Market Size (USD Billion) | YoY Growth (%) | CAGR Projection |
2022 | 24.1 | - | - |
2023 | 26.3 (est.) | 9.1 | 9.2% (to 2032) |
2024 | 28.7 (est.) | 9.1 | Alternative: 9.6% (to 2033) |
2025 | 31.3 (est.) | 9.1 | - |
2032 | 56.7 | - | - |
Note: Projections based on Allied Market Research; alternative sources like Spherical Insights indicate $26.39B in 2023 to $65.98B by 2033 at 9.6% CAGR. Variations exist, e.g., IMARC Group: $26.1B in 2024 to $39.0B by 2033 at 4.33% CAGR.
Regional Comparison
North America holds the largest share, supported by established infrastructure and stringent risk practices.
APAC leads in growth due to booming construction in emerging economies. Europe maintains steady expansion with focus on sustainable projects, while other regions like Latin America and Middle East & Africa (LAMEA) grow moderately amid economic volatility.
Region | Market Share (%) in 2023 | Estimated Size (USD Billion) in 2024 | Projected CAGR (2023-2032) | Key Growth Drivers |
North America | ~38.5 | ~11.0 (est.) | ~8.0% | Mature construction, large projects, ERISA-like regulations. |
Asia-Pacific | ~25-30 (est.) | ~8.5 (est.) | 12.4% | Urbanization, industrial expansion, government infrastructure investments. |
Europe | ~20-25 (est.) | ~7.0 (est.) | ~7.0% | Sustainable engineering, EU directives on safety and environment. |
LAMEA | ~10-15 (est.) | ~3.0 (est.) | ~9.0% | Emerging markets, oil & gas projects, but hindered by instability. |
Note: North America led with 38.5% in 2023; APAC fastest-growing.
Comparison of APAC Countries
APAC's market is diverse, with China and India spearheading growth through massive infrastructure spending. Japan and Australia offer mature, tech-driven markets, while Singapore and Hong Kong (SAR) excel in financial and high-value projects.
Growth factors include EV adoption, natural disaster resilience, and post-COVID recovery.
Country/Region | Estimated Market Share in APAC (%) | Projected CAGR (2023-2032) | Est. Avg. Profit Margin (2023-2024) | Key Drivers and Notes |
China | ~35-40 | High (~13%) | ~8-10% | Mega-projects like Belt and Road, urbanization; leads in property insurance at 36% share. |
India | ~20-25 | Highest (~14%) | ~7-9% | Government schemes like Smart Cities, rapid industrial growth; double-digit expansion. |
Japan | ~20-25 | Moderate (~8%) | ~9-11% | Advanced tech in machinery, disaster-prone requiring robust covers; 23.5% in property segment. |
Australia | ~15 | Moderate (~9%) | ~8-10% | Infrastructure boom, mining projects; 15.7% in property insurance. |
Singapore | ~5-10 | Moderate (~10%) | ~10-12% | EV initiatives, commercial developments; developed market with Hong Kong, Japan. |
Hong Kong (SAR) | ~3-5 | Moderate (~9%) | ~10-12% | Financial hub, cyber and liability growth; business-friendly, ranked high in APAC. |
Note: China dominates; India fastest-growing. Profit margins estimated based on industry ROE (~10% in 2024) and regional economic data; higher in developed markets like Singapore/Hong Kong due to efficiency.
Services Offered by Engineering Insurers
Engineering insurance encompasses various policies tailored to project phases and risks. CAR covers construction works, EAR focuses on installation, and machinery breakdown addresses operational failures. Additional services include risk assessments and loss prevention.
Service Category | Description | Examples |
Contractors All Risks (CAR) | Comprehensive cover for construction risks, including damage to works and third-party liability. | Building projects, civil engineering; excludes faulty design. |
Erection All Risks (EAR) | Protection for machinery installation, testing, and commissioning. | Industrial plants, mechanical assembly; includes breakdown during erection. |
Machinery Breakdown (MB) | Covers sudden damage to operational machinery. | Repair/replacement for equipment failure; excludes wear and tear. |
Other Specialized | Civil Engineering Completed Risks (CECR), Contractors' Plant & Machinery (CPM). | Post-construction property, equipment accidental damage. |
Revenue and Profit Analysis
Revenues are linked to global infrastructure spending, with top players benefiting from diversified portfolios.
In 2024, the market generated approximately $28-31 billion, with profits bolstered by premium growth but pressured by mega-losses. CAR segments drive the majority of revenue.
Major global players include Allianz, AXA XL, Zurich, Chubb, and Munich Re, often embedding engineering within broader operations.
Top Company/Entity | 2024 Revenue Insights (USD Billion, est.) | Profit Insights | Notes |
Allianz | ~10-15 (group insurance) | Strong, ROE ~10% | Leads in engineering via global presence; engineering-specific not isolated. |
AXA XL | ~5-7 (specialty lines) | Stable | Focus on CAR/EAR; mega-loss challenges impact margins. |
Zurich Insurance | ~8-10 (property & casualty) | Up 332% YoY Q1 | Diversified; engineering growth in APAC. |
Chubb | ~12 (group) | High | Strong in liability; market cap supports profits. |
Munich Re | ~15 (reinsurance) | Variable | Reinsures engineering risks; affected by claims costs. |
Note: Revenues often embedded; industry ROE ~10% in 2024, rising to 10.7% in 2025. Profits challenged by claims, up 332% in some segments.
Challenges in the Engineering Insurance Market
The sector grapples with escalating risks and operational hurdles:
Mega-Losses and Complexity: Increasing project scale leads to larger claims; 12% of top losses in 2023-2024.
Supply Chain and Inflation: Delays and cost hikes from global disruptions.
Regulatory and Economic Fluctuations: Varying standards, geoeconomic fragmentation.
Underinsurance and Awareness: Gaps in coverage, especially in emerging markets.
Market Pressures: Oversupply, new entrants, unsustainable pricing.
Post-Pandemic and Climate Risks: COVID impacts, rising natural disasters.
Conclusion
The engineering insurance market's robust growth, projected at 9.2% CAGR to $56.7 billion by 2032, highlights its critical role in supporting global development. APAC's 12.4% CAGR positions it as a growth engine, with China and India at the forefront, while North America retains leadership in scale. Services like CAR and machinery breakdown address diverse needs, but challenges such as mega-losses and regulatory hurdles demand innovative risk management. Stakeholders should invest in digital tools and partnerships to navigate this evolving landscape.
In navigating the complexities of the engineering insurance market, EverBright Actuarial Consulting Services offers unparalleled expertise to insurers and project stakeholders. Based in Hong Kong since 2014, EverBright specializes in actuarial pricing, risk management, and product development for engineering and construction insurance, including tailored solutions for CAR, EAR, and machinery breakdown policies. Our data-driven insights and innovative strategies empower clients to optimize coverage, enhance compliance, and mitigate risks in high-stakes projects, making EverBright an essential partner for success in this dynamic sector.
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