Tackling Rising Construction Insurance Claim Costs in the Wake of Labor Shortages

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Logo, Travelers. Text, A Contractor's Conundrum: Tackling Rising Claim Costs in the Wake of Labor Shortages. Thad Doyle, Travelers. Thad speaks from a video call tile in the upper right corner of the slide.

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THAD DOYLE: So hello. And everybody, welcome to today's webinar. We are going to be discussing the Contractor's Conundrum, Tackling Rising Claim Costs in the Wake of Today's Industry Labor Shortages, presented by Travelers Insurance.

My name is Thad Doyle I'm an assistant vice president of the Construction Claim Organization at Travelers. And I'll be your moderator for today's discussion. Before we get started, and I introduce the rest of the panel, just a couple logistics and housekeeping items. One is, given the content and our time frame, we do not anticipate time for questions at the end of the presentation.

You are welcome and invited to drop questions into the chat feature at the bottom. And we can follow up necessary, with relevant questions at a later date. In addition, we also plan to circulate a taped version of today's presentation. So you have the opportunity to replay the information at a later time. So with that, let me get started by introducing our panel for today.

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The three speakers smile in headshot photos on the slide. Text, Our Panel. Moderator, Thad Doyle, Assistant Vice President, Construction Claims at Travelers. Panelist, Ken Simonson, Chief Economist at Associated General Contractors of America. Panelist, Colby Whitfield, Assistant Vice President, Construction, Energy, Marine Risk Control at Travelers.

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So joining me from Travelers is my colleague, Colby Whitfield. Colby is an Assistant Vice President and our Risk Control organization. He has responsibility over Travelers construction, energy, and marine practices at Travelers. And we are very fortunate and excited to have with us today the esteemed Chief Economist and the Associate the Associated General Contractors of America, Ken Simonson. Ken, thank you very much for joining us today.

Over this next hour, we'll be exploring and offering some insights into the continued labor shortages for the construction industry, and how when you couple that with other inflationary pressures, such as supply-chain issues, rising medical costs, and the ever-evolving litigation landscape we all face, we believe these items are all contributing to an overall rise in the frequency and severity of insurance claims.

So for this hour, we'll dive into some of those challenges that this creates for contractors and ultimately, their insurers. And then we'll spend some time, at the end, discussing strategies on how to help mitigate these risks that we all face.

So I think to get us started, it would be great to have a little bit of history today on this issue, some of the causes and reasons behind the current situation. So Ken, if we can have you start off, can you share with us what the construction-labor landscape has looked like over the past several years and the trends that we've seen?

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Text, Ken Simonson, AGC. Ken speaks from the tile in the upper right corner. A color-coded map of the US is entitled, Construction employment change by state, Oct. 2022-Oct. 2023 (U.S.: 2.8%) 40 states and DC up and 8 states down and 2 states unchanged. Each state is colored a green or red shade, with deeper reds showing a more negative change and deeper greens showing a more positive change. Gray indicates no change. Text, Top 5, KY 14.9%, AR 13.3%, LA 10.3%, OR 9.4%, WY 9.1%. Bottom 5, ND negative 8.5%, CO negative 3.9%, MO negative 3.2%, HI negative 1.6%, NC negative 1.6%. Source: Bureau of Labor Statistics, state and area employment, www.bls.gov/sae Copyright, 2023 The Associated General Contractors of America, Inc.

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KEN SIMONSON: Sure. Construction has been growing lately. It was hit very hard at the beginning of the pandemic, lost 1.1 million workers just in the first two months of the pandemic. But it has actually bounced back pretty strongly. In fact, over the last year, non-residential construction in particular has been growing at a greater clip than either residential or total non-farm payroll employment.

In fact, you can see on this slide that from October of 2022 to October of 2023, total US construction employment, that's non-residential and residential combined, grew at a 2.8% rate. That outstripped the growth in total non-farm payroll employment of 1.9%.

Also as you can see on this map, employment has been rising across the country. In the latest 12-month period, 40 states added construction employees. And there's no particular pattern to the ones that had a decline. I update this map each month.

And the states in pink or the rare ones in red, with a decline of more than 5%, those do move around. So I would say construction overall is in good shape. But in fact, this map would be a good deal greener if contractors could find the workers they need.

There is another series from the Bureau of Labor Statistics, shown on the next slide, Job Openings and Labor Turnover Survey, or JOLTS, my favorite acronym for a government survey. And the blue line here shows the number of job openings on the last day of September each year, going back to the beginning of the series in 2001. The red line shows the number of people hired during the entire month of September in each of those years.

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A chart with a red and a blue line is entitled, Construction job openings & new hires Job openings and hires, September 2001-September 2023, not seasonally adjusted. The blue line represents openings and the red, new hires. The timeline along the x-axis extends from 2001 to 2023, and the scale on the y-axis extends from 0 to 500,000. For most of the chart, the red line hovers above the blue until the two converge and then cross in 2021, around 350,000. The end of the red line is labeled, New hires September 2023: 294,000 change from September 2022: negative 18%. The end of the blue line is labeled, Job openings September 2023: 438,000 change from September 2022: 2.3%. Text, Source: Bureau of Labor Statistics, www.bls.gov/ilt, Job Openings & Labor Turnover Survey (JOLTS). Copyright, 2023 The Associated General Contractors of America, Inc.

(SPEECH)
Now you would expect that in a 30 or 31-day month, there would be a lot more hires over the course of the month than there would be openings on the last day. And indeed, that was true all the way up until 2020. But in the last three years, the number of openings on the last day has actually matched or exceeded the number of people hired. It's not just for September. We've seen similar graphs each month this year.

So what's the takeaway? That the industry wanted to bring on board more than twice as many people as it was able to find. Why is it so hard? Well, the unemployment rate in construction, which typically is higher than it is in the broader economy because when a project finishes, not every worker necessarily catches on with another project right away--

And again, you can see in the history of this data, in this case, October, that the unemployment rate in construction was higher than the total non-farm payroll unemployment rate up until a few years ago. But in the last few years, it's just about matched that rate. It's at 4% in October of 2023.

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A chart with a blue and a black line is entitled, September unemployment rate: total nonfarm and construction Oct. 2000-Oct. 2023, not seasonally adjusted (NSA). The timeline along the x-axis extends from 2000 to 2023. The scale on the y-axis extends from 0 to 20%. The blue line represents construction and the black, nonfarm. The two lines display the same trends across the chart, spiking and dipping at the same times, with the blue line hovering above black for most of the graph. The two lines spike upward in 2009, around19% for construction and 9% for nonfarm, then slope down. They converge in a smaller spike in 2020, around 7%. The end of the construction line is labeled, Construction, Oct. 2023: 4.0%. The end of the nonfarm line is labeled, Nonfarm Oct. 2023: 3.6%. Text, Source: Bureau of Labor Statistics, Current Population Survey (CPS). Copyright, 2023 The Associated General Contractors of America, Inc.

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In other words, there are almost no workers who have construction experience, said they didn't work at all for pay last month, and were actively looking for work. That's the definition of an industry unemployment rate. So the construction industry is really facing a challenge in finding qualified workers.

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A chart with a red, a yellow, and blue line is entitled, Construction materials and labor costs top consumer inflation Year-over-year change in producer price index (PPI) for nonresidential inputs, average hourly earnings (AHE) for production employees in construction, and consumer price index (CPI), Feb. 2020 to Oct. 2023. A small table to the side of the chart is titled, % change to Oct. 2023 since, with two columns corresponding to October 2022 and February 2020. It reads, AHE, 5.4% since October 2022, 19% since February 2020. CPI 3.2% since October 2022, 19% since February 2020. PPI, negative 0.1% since October 2022, 38% since February 2020. In the chart, the timescale on the x-axis goes from February 2020 to October 2023. The y-axis extends from negative 5% to 25%, with a horizontal line across the graph at 0%. The red line, PPI for nonresidential inputs, dips below 0% around spring 2020, then slope steeply upward, plateauing above 20% from June 2021 until around spring 2022. It slopes downward, dipping below 0 again around summer 2023, then rising to barely cross back above 0. The yellow line, consumer price index, and blue line, AHE for production employees in construction, show a shallow slope, peaking around June 2022, at just under 10% for CPI and just above 5% for AHE. Then, the blue line remains steady while the yellow shows a shallow downward slope. Text, Source: Bureau of Labor Statistics, PPI, www.bls.gov/ppi; Current Employment Statistics, AHE, https://www.bls.gov/ces/. Copyright, 2023 The Associated General Contractors of America, Inc.

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What are they doing about it? Well, they're certainly raising pay. The blue line here shows a series that comes out with the employment report, called average hourly earnings for production and non-supervisory employees in construction. And this graph shows the year-over-year change in that series. It's been running at a rate of 5% or more for the past two years.

You can see in the table at the lower right that average hourly earnings for these production workers-- that would mostly cover most of the craft workers as well as office workers who aren't supervisors-- that rate increased 5.4% in the last 12 months. And it's been growing at a 5% rate or greater for two years in a row.

You'd have to go all the way back to 1982, '83 to find a 5% increase on a sustained basis. In fact, construction pay has been rising faster than it has in the broader economy, but nevertheless, not enough to attract enough workers to fill all those openings.

Meanwhile, what's been happening to materials cost is shown by another series from the Bureau of Labor Statistics called the Producer Price Index for inputs to new non-residential construction. That's a weighted average of the cost of all materials and services, such as design and trucking services, that go into non-residential projects.

And you can see on this red line, at the very beginning of the pandemic, it actually dipped below the zero mark. In other words, the year-over-year change in those prices was negative because the economy fell into such a deep hole. But that turned around very quickly, as we saw record prices for lumber, steel, copper, much more frequent and steeper increases than in the past for things as diverse as gypsum and plastic pipes and roofing materials.

So for 12 straight months, that red line, the change in the Producer Price Index for materials and services was growing at a 20% or more rate. The last spike happened in the spring of 2022, after Russia invaded Ukraine and cut off supplies of some materials.

But since June of 2022, that line has been descending. In other words, the year-over-year change in materials costs has been moderating. In fact, for several months, it actually declined, and looking again at the box at the lower right, the latest 12-month period essentially flat.

Nevertheless, over the entire period since February 2020, the Producer Price Index has gone up 38%. That's twice as much as what most people think of as the inflation rate, shown by that yellow or orange line, the Consumer Price Index, which has gone up 19% over that period.

So that's a quick take on what's been happening with the labor costs, materials costs, labor availability. Let me just say a little bit also about the supply chain. That was certainly a big problem at the beginning of the pandemic, a major reason materials cost spiked so much.

Supply chain has generally healed. But we are hearing of major shortages for electrical equipment, such as switchgear and transformers, but also the controllers for elevators, HVAC, communication systems, security systems, and buildings. So that has stretched out delivery times of many buildings and certainly added to contractors' costs.

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Thad reappears in the video call tile. Text, Thad Doyle, Travelers.

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THAD DOYLE: So Ken, thank you for that overall update on employment and pricing. And with that introduction, what are you expecting in 2024 as far as the terms of demand for construction?

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Ken reappears. Text, Ken Simonson, AGC. A horizontal bar chart is entitled, Change in construction spending: September 2023 vs. September 2022 Year-over-year % change in current (not inflation-adjusted) dollars, seasonally adjusted. The scale on the x-axis extends from negative 40% to 80%. The first bar, total construction reaches 9%. The next, private residential, in red, reaches left to negative 2%. Nonresidential reaches 19%, manufacturing 62%, and education 19%. Power reaches 16%, healthcare 15%, and highway and street 10%. Finally, offices reaches 9%, commercial 8%, and transportation 7%. Text, Source: Author, from U.S. Census Bureau, www.census.gov/constructionspending. Copyright, 2023 The Associated General Contractors of America, Inc.

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KEN SIMONSON: Well, I have to start off by conceding that I'm a chronic optimist. But I think the optimism is justified in this case, both with regard to the overall economy and construction. Certainly, job formation has been holding up very well. And I think consumers are still spending plenty. And so are businesses. And then government at all levels has been pumping money into many kinds of spending, including construction projects.

To get into a little more detail, we do get figures from the Census Bureau on the first business day of each month, the series they call value put in place. It's a measure of how much spending was incurred on projects already underway.

The top-line figure here shows the total construction spending increased 9% from September of last year to September of this year. That sounds pretty good. But unfortunately, we don't have a deflator to figure out how much of this increase is due just to price change versus to actual units of housing or hospital rooms or lane miles of highways, et cetera.

At any rate, you can see that there's only one negative on here, private residential construction, down just 2%. All of the non-residential categories, as defined by the Census Bureau, were positive. Now even within the residential, it's not all bad news.

This 2% is a much smaller decrease than we had been seeing earlier in the year because single-family home construction, while it was battered by the run up in mortgage rates and lending costs that developers and builders had to pay, it has actually started to come back, that the number of new housing units, single-family housing units, has been growing for several months. And just in the last four weeks, we've seen that 30-year fixed mortgage rate come down by half a percentage point.

So I do think that we will gradually see more people out to buy single-family homes. Builders are offering incentives, such as buying down that mortgage rate and offering amenities to get people to buy homes. And it seems to be working, quite different from the existing home market. But at any rate, for construction, I think the outlook is positive for single family. However, multifamily has been hanging at a record level of units under construction, partly because of those supply-chain problems I mentioned. And I think multifamily is going to tumble in 2024.

As for non-residential segments, you can see the leader of the pack here is manufacturing construction. That's been driven by those huge semiconductor fabrication plants, or fabs, outside of Austin, Phoenix, Columbus, Ohio. Just recently, we've had announcements of plants going into Boise and Lehi Utah, but also unexpected places like upstate New York and rural Kansas.

But it goes way beyond electronics plants, certainly electric vehicles and the battery plants for EVs and plants to produce parts for new markets, whether it's offshore wind, possibly carbon capture and storage, battery-charging stations.

Education construction also up very strongly. I think next year, though, we're going to start to see a drop off in higher-ed construction but a continued pickup, maybe even acceleration, on K-through-12 construction. Power-- certainly a lot of very generous tax credits waiting out there. But we'll have to see how soon developers are willing to commit funds for that. I think the outlook over the longer term is very positive for power, but still a lot of uncertainty about the timing.

Health care has been driven by something of a rebound in spending on hospitals that had to cut construction at the beginning of the pandemic. But I think for the medium to long term, we'll see more health-care dollars shifting away from hospitals and into standalone testing and treatment clinics, into rehab facilities and hospices, in special-care facilities, medical office buildings, not necessarily connected to hospitals.

Now highway and street construction is already up 10%. And that's before most contractors say they've seen any projects awarded under the Infrastructure Investment and Jobs Act I think now that we have some more clarity on how the Buy America rules, the apprenticeship rules and the prevailing-wage rules apply, we will see more of the IIJ money turning into project spending. So I think spending on highways and streets and other transportation projects has a very promising future.

Office also looks positive. But I think that one is really deceptive for two reasons. These numbers include remodeling repurposing of structures. But more important, the office category includes data centers. It drives me crazy that we don't have data on data centers. But by all accounts, that market is still very strong.

And with the rapid adoption of various flavors of artificial intelligence, the demand for data centers will continue for quite some time. So if we could take out data centers and the remodeling portion of this office-construction spending, new office would be down sharply and continuing down next year.

Somewhat similar with commercial, that it's partly a rebound effect. But I think we're near the end of seeing the growth in warehouse construction, that as the financing costs rise, the insurance costs-- and I know you'll be getting into that issue-- developers are finding it harder to get enough rent to cover those additional costs. So I think the warehouse market is likely to shrink in 2024, and the retail market to remain fairly close to flat. So that's a quick rundown on the major spending categories.

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Text, Thad Doyle, Travelers.

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THAD DOYLE: So Ken, thank you much for that primer and overview of the industry. I think you've raised a couple very important topics. So we had some pressure with materials. That seemed to have healed a little bit except for a couple important segments. It looks like there's still some positive opportunities to find work. I think what I'm understanding, Ken, is the single biggest challenge still, for contractors, is finding employees, and how to fill the labor force, which I think is important for today's conversation. So again, thank you for that backdrop.

So now let's move on to how we connect this topic to what we've been seeing in the insurance-claim world, specifically to travelers. So from an insurance industry perspective, we're definitely seeing these issues, especially the labor force as some of these other pressures, play into our claim activity. And

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Text, Connecting the Dots. In a photo on the slide, a finger reaches out toward a blue touchscreen with bending, colorful lines. The next slide reads, The Impact Across Insurance. Above a line with arrows at each end, a car icon appears with empty space to the right of it. Text, Claims are getting more expensive across just about any major line of business.

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in claims, we really think about it across several lines of business. So for today, I want to touch upon our four major lines, Auto, General Liability, Umbrella, and Workers Compensation.

And we are seeing an increase in the number of losses. And we're also seeing an increase in the number that hit Umbrella. And we recognize the majority of this audience is seeing that in their own experience with rising claim costs and the associated corresponding rise in premiums.

So just to put it in perspective, I want to give an overview, a high-level look, of just some of our own specific Travelers claim trends on a percentage basis by line of business. So let me start with Auto, been a challenging line for a while. From Travelers experience, looking at our own claim data from 2020 to 2023, we've seen our average incurred-- and when I talk about incurred, I'm talking about reserves-- expense and indemnity often at 10% or slightly higher year over year, starting that 2020 perspective.

And that aligns very closely to our paids. Our paids have been around that 10% mark, slightly higher in the more recent years. Now that will fluctuate by geography and by contractor type, by SIC code. But overall, directionally, I think tells you guys in our audience really where our claim spend is heading.

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To the right of the car icon, a triangular icon appears, with the silhouette of a slipping person inside.

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Similar conversation around general liability. Again, we've seen more fluctuations in that. But our average incurreds have been up somewhere in the high single digits to the low to mid-teens. Again, that'll vary by geography and contractor type. I would also say your general-liability claims are the ones that were most impacted by COVID and courthouse closures. So as the courts have worked through that backlog and there's more activity, we're starting to see the durations start to come down in our GL book as well. Again, this varies state by state.

And then as I talk about these rising claim values for auto and general liability, obviously, the claim exceeds the primary level, we get into our umbrella claims. And when I talk about umbrella here at Travelers today, again, Travelers construction claim experience lead umbrella claim experience, so that umbrella layer above a primary GL or auto exposure.

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To the right of the triangle icon, an umbrella icon appears.

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We’ve seen those numbers and notices start to increase. Actually, I think we're on pace to have a record number of notices in this year, in 2023. Those costs, as well, on our average incurreds are close to that 10% range year over year. And then what we've seen historically in our umbrella claims is, the majority of our claims come in for a few hundred thousand dollars to 1 or 2 million and that lead umbrella layer.

But what we're starting to see in this claim environment is more and more claims exceeding that $3 million mark and more and more claims getting closer to the available limits, especially with that lead umbrella layer. So again, a troubling trend and why we're having this conversation today.

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The last icon appears, depicting a person with their arm in a sling and a shield with a checkmark hovering near them.

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And then the last line of business I want to comment on is worker’s compensation. So a little bit of a different story here. For workers’ compensation, we’ve seen both our notice and inventory volume has been pretty stable. Over the last several years, the story with worker’s compensation is really about a very small percentage of our largest claims really drive almost 50% of all the money that we have up under management.

So what we’re really talking about is our most catastrophic claims sometimes happening to people earlier in their career, but it can happen to anybody. And these are the claims that we don’t want to hear about, when it leads to burns, amputations, traumatic brain injuries, et cetera. And we look at those worker’s compensation claims, it’s not unusual, unfortunately, to get to that $20 million mark or even more. So I think our own data confirms what we’ve all been seeing in that claims are getting larger in size and clearly increasing in value in the tort system.

So what I want to do next is talk about what’s probably driving some of these changes in our values and what we’re seeing as we try to work through our claims and our inventory.

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The slipping-person icon grows and transforms into an infographic. Text, Social Factors Driving Up Verdicts. Different icons sit next to each of the 12 factors on the infographic, which reads, Deflated Perceptions on Value of Money, Lack of Personal Connection, 3rd Party Litigation Funding, Rising Medical Costs and Medical Build up, Anti-Corporate Bias, Demographics / More Millennials on Juries, Skepticism and uncertainty of future, Access to Information, Polarization and Civil Unrest, Declining Optimism and Control, COVID-19, and Increasing Litigiousness.

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So let me talk a little bit about social factors which are driving up verdict. So before I dig into some of the boxes here in this slide, I know everybody in this audience sees, probably on a regular basis, some type of email, article, newsletter, webinar, associated with social-inflation or—nuclear verdicts. I don’t feel like we need to retread that water today. I do just want to emphasize that I think that phenomenon is very real and likely to continue, especially in certain parts of the country.

So what is leading and driving some of these behaviors? And why are we experiencing this in the claim environment? So I’m not going to talk about all the boxes here on the slide. Rather, I want to focus on a couple that I think are important, and then finish with one that ties in nicely to some of the presentation that Colby will present.

So the first thing is really the perception of money, if I’m looking at the upper left-hand side of the slide, the deflated perceptions on value of money. I think we see the advertisement on TV. I think we see the articles around verdicts. I think we see the billboards with the lotteries values and sizes. I think we hear about compensation with our celebrities, contracts for star players in the pro leagues. All of this is feeding into people’s perception about the value of money. And we think that plays an important role with where claims come out, either in the tort system or through a jury [INAUDIBLE].

The other thing I want to mention, which is the sophistication and tactics of the plaintiff bar—and that really goes into the medical buildup in the claims we see and the introduction or expansion of third-party litigation funding. And by this, I mean we have people now that are actually injured, get involved with an attorney early, and instead of getting their health care paid for in the traditional sense—

So you got a workers compensation claim. You go in that network, maybe you’ve got your own health care insurance, you go into that network. People are treating outside of those traditional means. And they’re doing things with letter of protection. They could be treating under a particular lien. And those costs would often exceed what we would typically expect for those services. So that allows them to build up a worst-case scenario for what their injuries would be.

Now what we’re also seeing, especially on the construction side, is you’re seeing more people take out a loan against a potential recovery of their individual bodily-injury lawsuit. So the litigation funding for construction is more seen in that individual-claimant level. And these are people that take out a loan—sometimes we get disclosed, sometimes we don’t—at certain high percentages for future recovery.

Now where this impacts our ability to resolve a claim is, the loan needs to get paid back, often first, with the settlement. And that actually can have an impact on what the ultimate claimant will recover at the end of the day. So these things combined, we think, are definitely leading to a rise in the values that we see in the tort system.

So my last comment here now is really about what we see as the corporate bias and a change in jury sentiment. So I’m talking about the left-hand side, middle row there. I think one of the main drivers that we’re seeing is that people’s view on society and corporations is changing. And by this, I think we’re seeing a shift away from more personal responsibility and accountability to more of a culture of safetyism.
And what I mean by safetyism is just the belief that companies, the government, et cetera, all need to take additional extra steps to keep people safe and protected each and every day from their activities of their products. And when that doesn’t happen, there’s an expectation that those folks should be responsible to pay up. And from our perspective, that’s really what’s unfortunately put a bull’s eye on corporate defendants, that we see.

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The next slide appears. It reads, The Bullseye on Corporate Defendants. 67% believe companies willingly sacrifice safety to increase profits. 1. 89% think companies should exceed minimum safety standards. 2. 58% partly blame companies for injuries caused by product misuse. 3. 1, 2 and 3: DecisionQuest National Juror Attitude Survey, 2017 to 2018.

(SPEECH)
So this slide here, I think, is important. You’ll see the reference down there. This comes from some actually jury surveys that were conducted a few years ago. So even if that’s a little dated I could say the information is still relevant because we see it. When we do our own focus groups, our own mock trials, and when we get the opportunity to poll jurors, for instance, after a jury trial, this sentiment still holds true out there across the tort environment. So again, we know it’s troubling and an issue for everybody concerned today. And that’s why we want to emphasize some of the things to do to mitigate these risks.

So I feel like as the claim person, I'm always delivering the doom-and-gloom message across these webinars. I always feel like I'm the guy who shows up at a party with a wet blanket. So I apologize for that. And thank you for bearing with me. I just have a couple more things to talk about with some of our most common claim scenarios. And then we’ll get moving on to some of the mitigation tactics.

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Text, Claims Scenarios. A photo on the slide depicts a person in a hi-vis vest with a construction helmet under their arm.

(SPEECH)
So let me share some real-life claim scenarios. And this is probably something that a lot of folks in today’s audience have experienced. And so I want to focus on folks earlier in career. But as Colby will share with some statistics later on, it can happen to anybody who’s new to an employer or new to the workforce.

So just picture a scenario where you’ve got an employee in their 20s or 30s, can be working for any type of contractor anywhere across the country. We see circumstances that person unfortunately finds himself in the wrong place at the wrong time. Maybe they’re completing a task they’re not completely comfortable with for the day. Maybe they’re trying to complete a task on their own that takes the work of two or three people.

Unfortunately, when that person gets injured in that context, the claims can be quite catastrophic, as I mentioned before. If that person has a burn, a significant head injury, paralysis, amputation, somebody is going to require lifetime care, probably 24 hours for the first several years, that gets into those claim types I mentioned earlier, in those values in that $20 to $30 million range for one individual hurt person.

So now if you take that value of a worker’s compensation claim, and then you put that into tort environment, where the plaintiffs will work up their evaluation of worst-case scenario on damages, cost, and wages, they’ll propose a life plan to take care of that person through their expected life cycle, you then add the pain and suffering the loss of enjoyment of life in those claims, it’s not unexpected in these days to see demands that exceed and claims that potentially exceed $100 million or more. And we’re unfortunately starting to see that more and more in our experience.

The last thing I want to comment on in claim scenarios, the environment, is just the response t’ how we think juries and people are reacting to fatality. So unfortunately, we see a good number of fatalities each and every year, some deriving from auto-liability accidents—so that’s a contractor driving a truck, light vehicle, heavy truck, through traffic, is involved in an accident that could lead, unfortunately, to the death of somebody in another vehicle. We also see a lot of fatality claims that derive from a work-zone accident.

So this is an auto accident maybe caused by others, multiple cars in a work zone or leading into a work zone, that they try to attribute to either the traffic controls, tapering et cetera. And then as we all know, unfortunately, given this industry, there are some fatalities each and every year that happen on an active work site.

We have found our history now, with those claim examples, is that when we are actually looking to resolve or try those cases, there’s been a change in jury behaviors where they have a hard time finding any contributory negligence or significant accountability on the deceased. They’re saddled with the sympathetic nature of the estate, spouses, and family members. And in that context, we’re starting to see claims that may have been valued at a few million dollars starting to double or go up and increase in size.

So in closing, what I really want to emphasize is that managing claims is getting harder for all of us. And as a result, I think we need to dig in a little bit more and work harder at our prevention up front, to avoid accidents. When an accident happens, we need to dig into the investigation and be due diligent up front, then ultimately work ahead of time on the defense of these claims here, in the best position possible, to prepare for it. And we’ll talk a little bit about that when we get to Colby here, coming up.

So I know this might be a little bit of a doom and gloom. It might be a little bit overwhelming from a statistics perspective. And do keep in mind that contractors can be proactive to help manage these risks. So I’m going to pause. And Colby, we’re going to invite you to the conversation. So Colby, what are some of the critical or key pieces of advice or strategies you would give construction employers to manage their risks with the labor shortage?

(DESCRIPTION)
Colby appears in the video call tile. Text, Colby Whitfield, Travelers. Text, Attracting and Retaining Skilled Workers. A red circle on the slide is labeled, Attracting. A line connects the circle to a dark blue text box that reads, Vocational and trade schools.

(SPEECH)
COLBY WHITFIELD: Yeah, thanks Thad. There certainly are steps construction companies can take to help minimize the risk you spoke about and really narrow the labor gap. And I’ll just start with some of the things I’ve seen our best contractors do to find qualified and skilled workers.

A great starting point are vocational and trade schools and the related apprenticeship programs. Those organizations have a vested interest in supporting a strong labor force. So something as simple as getting involved in job fair events and career days can be beneficial. Similarly, giving presentations about your company to those groups can spark an interest in those looking to land with a good company.

(DESCRIPTION)
Another line connects the red circle to a lighter blue box that reads, Industry networking events.

(SPEECH)
Using your industry associations to network and build relationships with peers could lead to future referrals. Take advantage of those seminars and conferences your associations offer. Or take it a step further. You could become a board member and help influence the Association’s efforts that are related to the evolving labor needs.

(DESCRIPTION)
Another line connects the Attracting circle to, Industries facing downturns.

(SPEECH)
Also consider other related industries that may be facing potential downturns. Those could provide a beneficial pool of workers to target. For example, we know the oil and gas industries, as well as telecommunications, have workers with many transferable skills that could be refined rather than developing new workers from the ground up.

(DESCRIPTION)
Another line connects from the circle to, Non-traditional sources.

(SPEECH)
And don't forget about opportunities for recruiting through non-traditional or overlooked sources such as local ag schools or even military organizations that support veterans transitioning back into civilian life. Those sources often have populations with highly transferable skills and very good work ethics.

(DESCRIPTION)
Text, Thad Doyle, Travelers.

(SPEECH)
THAD DOYLE: So thank you for that introduction, Colby. So let me ask you a related question. Are you seeing companies working to expand their recruiting efforts into more diverse populations?

(DESCRIPTION)
Text, Colby Whitfield, Travelers. Text on the next slide reads, Attracting and Retaining Skilled Workers, the importance of Gen Z. A photo depicts three seated people, two men and one woman, in construction helmets. They turn their attention to another person in a hi-vis vest, gesturing at a job site.

(SPEECH)
COLBY WHITFIELD: Yeah, we certainly are and for good reason. Diverse populations are a significant untapped source of labor. Consider that in 2022, only around 11% of total construction-industry employees were female. And only around 7% of construction employees were Black or African-American, and 2% Asian. So appealing to a more diverse audience in job-recruiting ads and public-facing communications can help to attract candidates who might otherwise be hesitant to apply.

We also have to make the construction industry more attractive to a much younger generation. When I consider the benefits the construction industry has to offer, no student debt, the ability to see daily how you're contributing to something larger, and significant growth opportunities given the impending retirement wave, a construction career is really one of the best-kept secrets. And with college costs rising significantly, we are seeing Gen Z opening up to less traditional, less expensive, and more direct-to-career pathways in high-demand industries such as construction.

And while Gen Z often gets a bad rap for their use of digital technology-- you think of phones, it certainly could be seen as a detriment by some-- it really could be an untapped skill set for a construction industry that's being rapidly transformed by technology. Their use of new technology to communicate and to create comes naturally.

I know several local construction companies who are already taking advantage and investing at the high-school level. They're participating in high-school career fairs, mock interviews, as well as offering internships that often lead to direct placement into the trades right out of school. So I would just say, let's not hide this career choice from the best and brightest that generation has to offer. Construction shouldn't be a default job for those that don't have a college degree, but rather a career choice that can certainly be desired.

And then lastly, don't underestimate the power of your current employees to help recruit on your behalf. Some of the best talent is often recruited by those from within an organization. Offering an employee referral program can be a beneficial way to find workers who align with your company culture and who may work well within your team. And it also has that added benefit of making current employees feel more invested in their jobs by having some influence in the hiring process.

(DESCRIPTION)
Text, Thad Doyle, Travelers.

(SPEECH)
THAD DOYLE: So thanks, Colby, great commentary to hear what some of our contractors are doing around employment. So Ken, I want to go back to you because I know you've got some thoughts or observations on this topic. So from your perspective and vantage point, what can you add on this issue?

(DESCRIPTION)
Text, Ken Simonson, AGC.

(SPEECH)
KEN SIMONSON: Colby's remarks were right on. I went, a couple of months ago, to a high school in Henrico County, Virginia, outside of Richmond, where they bring in students from all nine regular County high schools for training in various crafts, including motor sports but also construction. And indeed, construction firms are engaged with the students while they're there. They're offering internships. They're hiring them as soon as they graduate. And this kind of thing is happening all over the country now.

But I'd also like to mention that construction does have three advantages over other entry-level jobs, particularly for people who are coming straight out of high school. Construction pay is about 19% higher than it is for the typical worker with a production or non-supervisory job. Second, construction employees who start out in a summer or helping or part-time job can often advance quickly and wind up owning their own company or being executives of a larger company. We have thousands of examples of that.

And then third, as Colby mentioned, construction provides you the opportunity to show friends and family what you've been doing, sometimes an iconic building or something that greatly improves the quality of life. And those things just aren't possible in the typical starting job.

(DESCRIPTION)
Text, Thad Doyle, Travelers.

(SPEECH)
THAD DOYLE: So Ken, thank you for the contractor's perspective. So Colby, if I can, I'm going to pivot back to you to continue with this topic. So we've now talked about getting employees in the door. I think we need to talk about the retention piece. You often hear contractors say hey, once I get them, I got to develop them and keep them. So can you share your thoughts on that topic?

(DESCRIPTION)
Text, Colby Whitfield, Travelers. Attracting and Retaining Skilled Workers. A red circle labeled, Retaining, connects to a text box that reads, Onboarding and training.

(SPEECH)
COLBY WHITFIELD: Yeah, it's certainly one thing to hire good talent, but a much different thing to keep them. And I think of the old adage, the best defense is a good offense. Taking care of and developing your current employees is great offense. And it plays a significant role in retention.

There are a few things to consider here, starting with onboarding. Through Travelers own claim data, we know that around 47% of claims and 51% of claim cost are attributed to first-year employees. And that's not just first-year employees to the industry. That includes experienced workers who are in their first year with a new company.

When you consider each company has different expectations, potentially unique processes and practices and certainly, different projects that present different exposures. And effective onboarding and assimilation process is crucial to new worker success. And it really needs to be more than just having them read a safety policy or watch a safety video, which I often see.

The best companies conduct their orientations on site, in person. They do it before the worker even begins. They walk the project and provide an overview of the work to be done. They make sure the worker knows how to use the provided tools and safety equipment. And they make clear the company's commitment to safety as well as setting expectations for reporting unsafe conditions and injuries.

(DESCRIPTION)
Another line from the Retaining circle connects to a text box that reads, Mentor programs.

(SPEECH)
Something as simple as remembering to assign mentors and keeping new hires highly visible is also beneficial. Mentors help to model the way and answer questions and new hire may have. And identifying new hires through different colored hardhats or hardhat decals helps keep other site personnel aware of those employees, so they see them and they can support them when they need it most.

(DESCRIPTION)
A line connects the circle to another box that reads, Leadership involvement.

(SPEECH)
And also, many forward-looking companies are investing in leadership development. It's our front line leaders, our lead men, foremen and superintendents, who really drive a culture that's built on safety, production, and quality. And it's those who most directly impact risk management.

What we sometimes see is the most experienced, most technically skilled, and hardest working folks get promoted into those leadership roles. But what made them successful in their prior role will only go so far in helping them become a successful leader. So again, our best contractors are investing in those-- development of future leaders, helping them build those critical communication, coaching, and conflict-resolution skills, which all directly impact retention.

(DESCRIPTION)
Text, Thad Doyle, Travelers.

(SPEECH)
THAD DOYLE: So Colby, thanks. All great information. So we've discussed how to find employees, how to train and develop them within the industry. And I think everybody appreciates the benefit of good employment practices to a company's bottom line. But then obviously, thank you for sharing the statistics about that first-year experience from an injury perspective.

And you and I see claims on a weekly basis. So when think about them, we're also associated with some of the common causes of loss. So we've got our struck by, our fall from heights. I mentioned those street and road exposures. I think about large auto accidents, not actually our liability, but also could be a significant work comp claim. So I feel like we're compelled to talk a little bit about safety. So Colby, from your perspective, what should our contractors be thinking about, from a safety-management standpoint, to protect this current workforce that they've just hired and onboarded in this industry?

(DESCRIPTION)
Text, Colby Whitfield, Travelers. Safety Management. On the slide, an icon labeled, Planning, appears with empty space to the right of it. The icon depicts a gear over text boxes labeled 1, 2, and 3, with arrows pointing from one box to the next.

(SPEECH)
COLBY WHITFIELD: Yeah, it's an important point that safety may not be the first thing that you think about when faced with a labor shortage. But certainly, keeping your workers safe and on the job can help prevent those labor gaps. Just focusing in on tried-and-true safety practices helps to avoid significant claims and in return, retain good workers. It also puts you in a much better position to resolve claims and avoid those large verdicts, those nuclear verdicts, that you spoke about earlier.

Also, highlighting your safety culture, your safety record and the like, in marketing and job postings, is a great way to recruit safety-minded folks. So this may come as no surprise to today's audience, but just a good reminder that it's really effective planning, training, and accountability is key to protecting our workforce.

In terms of planning, our better contractors start to plan for safety well before the project begins. They're identifying hazardous operations that impact worker and public safety, things like working from heights, working around traffic, and crane operations. Where they can, they're engineering in controls, such as attaching anchor points onto structural steel during fabrication. And they're often in incorporating job-hazard analysis or job-task analysis to outline the hazards associated with each task and the related safety controls. And they're also taking advantage of daily pre-work huddles.

These aren't the bland toolbox talks we may all be familiar with. Rather, these are quick 5-to-10 minute discussions at the beginning of the day to review what's being planned, who's doing what, and to set expectations for safety, quality, and production.

(DESCRIPTION)
A new icon appears to the right of the first. It is labeled, Training, and depicts a lightbulb connecting to two figures. A third figure sits between the first two, connected to them with lines.

(SPEECH)
From a training perspective, contractors that dedicate time and energy to ongoing training fare much better than those that take a once-and-done approach. They also rely more on hands-on training versus the pre-canned programs. And they're constantly evaluating the effectiveness of the training, asking questions during and after, to gauge the employees' understanding.

(DESCRIPTION)
The last icon appears to the right of the previous one. It is labeled, Accountability, and depicts three raised hands, with a star over the center one.

(SPEECH)
And then from an accountability standpoint, really, our best contractors hold their folks accountable. For instance, if there's a process to inspect work-zone traffic-control devices, they ensure it gets done through a daily documented inspection process. And when they find the inspection wasn't done or that it wasn't effective, they take action and ensure the whole team learns from the mistake.

(DESCRIPTION)
Text, Thad Doyle, Travelers.

(SPEECH)
THAD DOYLE: So thank you, Colby. So to further the point on best practices that you mentioned-- and we talked about it a little bit in the claim conversation-- is unfortunately, we see some large claims that may have been foreseeable or potentially preventable had we been following our own established safety practices and protocols that a contractor puts in place or obviously, following other established industry practices.

And we do recognize that despite all of the training, planning, and accountability, that accidents are still going to happen in the nature of this industry. It is unavoidable. And we recognize that can happen even to the best contractors. Accidents and injuries can occur. So Colby, what would your advice be to contractors to do after they've had a loss, to help manage a claim?

(DESCRIPTION)
Text, Colby Whitfield, Travelers. Post Incident Response. An icon appears on the slide, with blank space to the right of it. The icon is labeled, Incident Investigation, and depicts a magnifying glass over a document and folder.

(SPEECH)
COLBY WHITFIELD: Sure, and again, this may come as no surprise to our audience, but an effective incident-investigation process is crucial to learning what happened and why. That certainly helps determine causation, as there may be other parties at fault. But the best investigation processes also help to determine root causes. Companies that do that well and really, to take it a step further, to communicate their findings to their field staff, do better at implementing changes to prevent future similar losses.

(DESCRIPTION)
Another icon appears to the right of the first. It is labeled, Post-injury Management, and depicts a person with their arm in a sling, with a circled plus sign hovering above them.

(SPEECH)
I'd also be remiss not to mention the importance of post-injury management as it relates to workers compensation. An important part of that is establishing relationships with medical providers who align with your return-to-work philosophy. Companies that respond quickly to injured employees, those that offer transitional duty, and who actively maintain communication with the employee, the claim professional, and the medical provider, fare much better in getting injured workers back to work as soon as medically appropriate. It also goes a long way in retaining those good workers.

(DESCRIPTION)
Text, Thad Doyle, Travelers.
(SPEECH)
THAD DOYLE: Yeah, thank you, Colby. And I would also mention that as an opportunity to reduce maybe that injured worker going to an attorney and either prolonging a claim or expanding the claim. So thank you for emphasizing some of this basic foundations for customers.

I want to talk a little bit more about auto liability and exposure. So everybody's well aware of the attorney advertisement and the involvement, countrywide, with auto accidents. You can't turn on the news or drive down a highway and not see a billboard advertising, if you've been in an auto accident, call somebody.

(DESCRIPTION)
Text, Fleet Controls. A photo on the slide depicts two men in hi-vis vests and construction helmets leaning against the bed of a pickup truck.

(SPEECH)
And we really continue to see some of our biggest losses sometimes paying that full limits are arising out of our auto exposure. So can you share your perspective around the importance of fleet management and controls?

(DESCRIPTION)
Text, Colby Whitfield, Travelers.

(SPEECH)
COLBY WHITFIELD: Yeah, with so many new workers coming into the industry, it really just highlights the importance of following basic fleet-management practices, no different than what we've always recommended. Before you put that new driver behind the wheel, you need to understand their driving behaviors and if they're someone you want driving, whether that be a company vehicle or their own vehicle. It's important to review driving records of those new folks through motor-vehicle record checks. And then use set criteria to inform your decisions on who can drive and who can't.

And then once on board, setting expectations on distracted driving, driving under the influence, as well as spelling out personal use of the company, vehicle who can drive it and for what reasons, is critical. And then lastly, lots of companies are starting to use telematics, many for logistics, others to identify speeding. But the best companies actively utilize that data and all the data, aggressive driving, aggressive braking, lane changes, et cetera, to coach their drivers and really improve those driving behaviors.

(DESCRIPTION)
Text, Thad Doyle, Travelers.

(SPEECH)
THAD DOYLE: Yeah, I think you raise a really good point there, Colby. A lot of times when I'm out in front of a broker, an agent, or a customer, and they ask about cameras, they ask about telematics, what do I think, I always say I think it's important to know the truth and to monitor it and use it effectively. I think it's better to know what happened so you can respond to it. And I think it ends up being proactive. And I think it only takes the benefit of the technology to either take a claim off the table or reduce a claim for the right value to see the value in those investments.

So thank you very much for mentioning that. And I feel related, but important to mention-- and I know Ken got into this a little bit in his outlook-- is really thinking about the influx into the industry from the infrastructure bills and the opportunities that it may present.

(DESCRIPTION)
Text, New Opportunity Risks. In a photo on the slide, a person stands in a vast, empty warehouse holding blueprints.

(SPEECH)
Do you have any thoughts around what contractors should be thinking about as they look into to getting to that work, which may be different from what they've done into the past, or expanding some of their existing operations?

(DESCRIPTION)
Text, Colby Whitfield, Travelers.

(SPEECH)
COLBY WHITFIELD: Sure. Many of our customers are looking at new opportunities as a result of that legislation. As with any new project, it's important to first consider the skill sets of your current staff and determine what you do well as well as what leadership and labor you may need to bolster. And again like we've been talking about, you may not have the labor force or be able to find the labor force. If you don't have the team, an option could be to subcontract out a portion of that work, which has both subcontractor-selection and risk-transfer implications.

From a selection standpoint, vetting a subcontractor's experience and the quality of their labor force is more important than ever when considering they're facing the same labor shortage as you are. So having an effective pre-qualification process is imperative. Check out their completed work portfolio to understand success with similar projects. Review their loss history and their OSHA citations. And determine how they train and qualify their labor force. You just want to understand if they're properly staffed and able to complete the work safely and effectively.

From a contractual risk-transfer standpoint, it's important to utilize your written subcontract agreements. In the event of a claim, you want to transfer risk to that responsible party. It's also important to retain all project documentation including, for example, blueprints, as-built, RFIs, all the contracts, and the associated certificates of insurance and AI endorsements. Those should be kept for at least as long as required by the state statute of repose.

And just given the complexity of contract law and the many jurisdictional differences, I would just urge the audience to review their subcontracts and really, their entire risk-transfer procedure, with an attorney familiar with construction contract law in the states that they work.

(DESCRIPTION)
Text, Thad Doyle, Travelers.

(SPEECH)
THAD DOYLE: So Colby, well said and great advice. And from a claim perspective, I cannot overemphasize the importance of having an effective, upfront, and executed contractual risk-transfer program. And by that, I mean it's vetting contracts, making sure they're signed before work starts. And then really, what's important is to verify that there's insurance behind those subcontractors or sub subs that you're using.

We continue to see, every day in our claim inventory, problems or opportunities where you would think a claim would be picked up by somebody else and it's not because some of the simplest fundamentals were not followed or executed on time. And this is the kind of thing that we think contractors and their resources can control. So more emphasis spent on that side, I think, will help a lot of folks in the audience to either avoid or mitigate a potential claim when it happens.

So one last question, I guess, Colby, as we're talking through this with you. Are you seeing contractors take advantage of technologies or innovation to help minimize some of this labor gap?

(DESCRIPTION)
Text, Colby Whitfield, Travelers. Text, Bridging the Gap with Innovation. In a photo on the slide, a person in a construction helmet sits at a desk, behind two monitors displaying plans. Behind the monitors, screens on the wall display blueprints.

(SPEECH)
COLBY WHITFIELD: Absolutely. Many contractors are leveraging innovation. They're expanding their use of technology to help streamline their operations and support their workforce, which can both impact the labor gap. Also, embracing new technology can fuel recruitment of a new generation of workers who want to work for tech-savvy companies.

We are seeing contractors employ more prefabrication and modular construction techniques to help improve safety, efficiency, and quality control. And we're also seeing technologies that enable worker safety and worker wellness. Again, taking care of those we currently employ is critical.
Just a couple of examples. Companies are starting to employ wearable technology that can alert equipment operators to the proximity of workers around them, which is great. And others are starting to use devices that provide an alert to others on site in the event of a fall from heights. Just lots of new technology out there. It's advancing rapidly and really hard to stay on top of all of them. That's where your carrier or agent can be a great resource as you vet technologies and help to identify that right solution.

(DESCRIPTION)
Text, Thad Doyle, Travelers.

(SPEECH)
THAD DOYLE: So Colby, thank you for all your insights. Thanks for what you've shared today. I think these are excellent opportunities to help manage some of these labor-related risks. But Ken, I want to go back to you, if we can, for a moment. I'm sure you've got some final thoughts on the industry and quite frankly, where you think the economy is heading for contractors.

(DESCRIPTION)
Text, Ken Simonson, AGC. Medium-term outlook for construction. Economic recovery should continue but risk of recession remains. Homebuilding appears poised for slow recovery. Multifamily, warehouse, retail, office, lodging: slowdown likely due to rising rates. Data center and manufacturing construction should remain hot. Infrastructure Investment and Jobs Act, "Chips" Act, Inflation Reduction Act will give major boost to infrastructure, manufacturing, and power construction. BUT money will be slow to turn into construction awards and spending. Buy America(n), labor, environmental strings may tie up project starts for years. Materials costs, lead times: mostly better except electrical gear, some electronics. Labor availability has resumed being the number 1 challenge for many contractors. Source: Author. Copyright 2023, The Associated General Contractors of America, Inc.

(SPEECH)
KEN SIMONSON: Sure. I certainly skipped through things pretty quickly. So let me give a little recap. First of all, I see the economy continuing to grow in 2024. I think there is a risk that the Fed will keep raising interest rates at least one more time, until they're convinced that inflation has truly been beaten down, staked through its heart.
But even with the interest rates where they are now or a little higher, that hasn't kept people from investing more and recently, from going out and buying homes. So I think single-family home building appears to be poised for a slow recovery, probably not every month, but we've passed the bottom on that.

Multifamily, however, along with other developer-finance categories, are really being hit by rising financing costs, tighter lending standards, and in some cases, significantly higher insurance costs. All of those make it harder for projects to pencil out at a time where we are seeing some rents decline and others flatten out.

In fact, just today, for instance, the Federal Housing Finance Agency put out its quarterly figures on resale prices for houses. And interestingly, there was a significant drop. The biggest drop among the hundreds largest metros was in Austin, formerly a very hot market. That doesn't necessarily translate into what's happening to rents. But it is an example of how the market is changing in multiple directions.

On the non-residential side, we've seen a significant shift of consumers away from buying goods, especially heavy durable goods, and also a significant improvement in most supply chains. These factors mean that there's less demand for warehouse space to ship goods direct to consumers or to stores. When sellers feel they can get it just in time, they don't have to stock it just in case. So I think the warehouse market is in for decline.

Retail construction-- I don't see much improvement ahead. Office construction-- likely to decline. And lodging-- while we're all going out and traveling more, it's not clear that we will continue to see growth in lodging construction or updating renovation of hotels that's been going on for the past couple of years.

So that sounds pretty gloomy. But all of that's going to be outweighed by continuing demand for data centers, for various types of manufacturing plants on a scale never seen before, and at some point-- and I think part of that point will show up in 2024-- funding from the Infrastructure Investment and Jobs Act to a wide variety of infrastructure categories.

The so-called CHIPS and Science Act provides large subsidies for investment in advanced manufacturing, particularly semiconductor-related projects. And I expect those funds will be awarded in 2024. And third, the Inflation Reduction Act that passed in August of 2022 has very generous tax credits, sometimes multiple layers of them, for a variety of alternative-energy projects.

On all of these, there are regulatory issues to be hashed out that may be delaying some of the investment, But it's coming, and I think will make 2024 a positive year, 2025 a lot of favorable promise, although my crystal ball fogs over before seeing into 2025. I think the biggest challenge for contractors has faded from materials costs and supply-chain issues to labor availability. That's going to be challenging for 2024 and beyond.

But the things that Colby mentioned, that contractors are doing proactively to attract workers and make construction be the reality, make the perception be the reality, that it's an exciting business to be in with, frankly, some cool tools to play with, with great advancement opportunities, good pay to begin with, and a lot of upward potential on both the pay and career choices. So I'm still upbeat about construction.

Now to keep up with what's going on a week-by-week basis, I write a weekly summary, one-page summary for those of you who want to keep it short, of construction economic information, called The Data Digest. And I'd be glad to add anybody on the call to the email list for that. Just email me at Kent.Simonson@agc.org. And AGC, of course, has lots of other resources, economic and other. So I encourage you all to look at www.agc.org.

(DESCRIPTION)
A sample Daily Digest sits to the right on the slide, with headings, body text, and links. Text to the left on the slide reads, AGC economic resources (email ken.simonson@agc.org). Data DIGest: weekly 1-page email (subscribe at http://store.agc.org). Surveys (2023 Workforce Survey: https://www.agc.org/news/2023/09/06/new-survey-shows-significant-flaws-nations-approach-preparing-workers-construction-careers-and-how). State and metro data, fact sheets: www.agc.org/learn/construction-data. Monthly press releases: construction spending; producer price indexes; national, state, metro employment with rankings: https://www.agc.org/newsroom. Construction impact model: https://www.agc.org/agc-construction-impact-model. ConsensusDocs Price Escalation Resource Center: https://www.consensusdocs.org/price-escalation-clause/. Source: Author. Copyright 2023, The Associated General Contractors of America, Inc.

(SPEECH)
Thanks again for the opportunity to participate in this, Thad.

(DESCRIPTION)
Text, Thad Doyle, Travelers.

(SPEECH)
THAD DOYLE: So Ken, thank you so much for those final thoughts. And we really appreciate you being here today to support this message. So we've got a few minutes left. So why don't we pivot to some final thoughts. And then we'll conclude the presentation for today. So Colby, let me go back to you. Any final thoughts or ideas you want to share today?

(DESCRIPTION)
Text, Colby Whitfield, Travelers. Final Thoughts. In a photo, a construction crane towers above an in-progress skyscraper.

(SPEECH)
COLBY WHITFIELD: Yeah, I would just stress to the audience the importance of working with an insurance carrier, an agent, that has hands-on experience and really a deep understanding of the construction industry as you're looking to partner with someone to tackle all the challenges we spoke about today. Carriers with dedicated construction risk-control specialists, who often come from the industry, can help you address and identify those gaps and hazards in your current operations, and offer recommendations and resources to help you improve and then revamp your programs.

(DESCRIPTION)
Text, Thad Doyle, Travelers. travelers.com/resources/business-industries/construction. A QR code sits on the right of the slide. On the left, a photo displays the aforementioned Travelers webpage. A banner on the page depicts constructions workers and reads, Helping you protect your workers and your projects from risk. Tiles below have headings that say, 4 Key Steps for Construction Projects to Help Protect Your Company, 5 Equipment Innovations Impacting Construction Business Operations, and 5 Innovations Impacting Construction Job Site Safety.

(SPEECH)
THAD DOYLE: So Colby, thanks for that. And want to emphasize that point too. We love contractors. And the ability to partner and help out in all these regards is better for all of us. So please, lean into that partnership. And we're here to support you the best we can.

So we've talked about a lot in this hour. And I know we've probably only barely scratched the surface. But hopefully, you've heard some thoughts, ideas, on tactics, strategies, to help address the situation we're all facing. Thank you for Ken, for sharing some of those resources that we have available to folks. Up here in the next couple of slides, we just want to share some other things that are available from Travelers.

You've got the link up there and the QR code. This is access to our public-facing Prepare and Prevent site, available to anyone, that you can find more information and details of some of the ideas and strategies that Colby shared today. So please take a look at your earliest convenience.

And in addition to this risk-control resource, want to just point out that Travelers has a construction innovation network available.

(DESCRIPTION)
Text, constructioninnovation.travelers.com. To the left, text above a QR code reads, To learn about innovative capabilities for contractors, visit Travelers Innovation Network for Construction. To the right, a laptop screen displays the webpage, with a banner that reads, New ways to address your construction risks. Text on the page above an email address field reads, Sign up to receive the latest on risk management solutions and insights. Tiles below the banner list companies and their fields.

(SPEECH)
These are companies that we vetted, that we think, through the use of technology and certain capabilities, could add to the benefit of contractors both from a safety and job-delivery perspective. So when you get an opportunity, please check this out. And there are potential discounts available to existing Travelers customers.

So with that, I want to thank my panelists again today for joining me. I want to thank the audience for participating and listening and the great questions that came in. And want to wish everybody a great rest of your day. And thank you very much. We look forward to talking again.

(DESCRIPTION)
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