Growing maturity in the local market

Tony Rastall, partner, Middle East construction projects, Jardine Lloyd Thompson

Although the expertise and capacity on offer in the international insurance market is still essential for the insurance of larger construction projects in the Middle East, the regional market for construction insurance now offers an important amount of capacity. This is the view of Tony Rastall, a partner specialising in Middle East construction projects at insurance broker Jardine Lloyd Thompson. There is no doubt that the upheavals in the world financial markets and the near failure of a major insurer late in 2008 have made potential lenders to construction projects in the region increasingly risk averse. However, Mr Rastall argues that insurance is a key ingredient in giving lenders the assurance they need to proceed and that it is essential for developers and contractors to get their insurance programme right. Here, in an edited extract from his presentation at the recent Middle East Project Finance 2009 Conference in Bahrain, Mr Rastall provides an overview of current developments in the regional market and also suggests ways in which developers and their insurers can approach the critical issue of sabotage and terrorism cover in the region, an area where lenders can get particularly concerned and look to developers to provide very high limits of cover in the absence of a government indemnity