JLT points to a more risk-averse attitude among Gulf investors.
While the construction boom in the Arabian Gulf continues apace, the emphasis is shifting from privately-funded power and energy related projects, to government-backed or public-private partnership infrastructure construction, such as roads, bridges and tunnels.
That is the view of Tony Rastall, a partner at Jardine Lloyd Thompson, who presented his thoughts at the Middle East Project Finance 2009 Conference in Bahrain.
Rastall highlighted during his presentation that, "Potential lenders to construction projects are not surprisingly becoming increasingly risk averse and insurance plays a key role in providing the assurance they need. At the same time we are seeing a shift to public-private infrastructure projects which often have more complex insurance requirements and the need to demonstrate high levels of risk management.
"The pool of insurance capacity has grown while the supply of projects is decreasing, so competition for the remaining business will continue. Regional markets are likely to quote lower rates than the international insurers, but for the largest and most complex jobs, international capacity remains important."
His presentation, 'Overcoming insurance challenges impacting the regional project finance market' added, however, that there is still demand for insurance for major projects in the Middle East despite the world economic problems and fall in the price of oil.
The presentation emphasised how important it was for developers and contractors to collaborate with insurers to get insurance capacity at competitive terms.
Rastall added: "Providing this information will take time and some effort for developers and contractors, the more relevant information that insurers are given, the more likely they will be to provide competitive pricing.
"Construction is not a simple class of insurance, and the project insurance broker has to understand the industry well to know which insurers are most suitable for which risk. What appears to be cheap insurance can turn out to be expensive if the conditions are not appropriate for the type of project, or claims are not paid."