Key issues and challenges of risk management and insurance in China's construction industry

Abstract

PurposeThe purpose of this study is to investigate the key issues and challenges in risk management and insurance in the Chinese construction industry and propose solutions to improve risk management.Design/methodology/approachThe study is based on surveys which target people who have direct or relevant experience of risk management and construction insurance in China. Surveys were conducted by e‐mail, mail and fax to selected clients, contractors (project director, project managers, and contract managers/administrators), insurers, brokers, consultants, claim advisors, and academics; and e‐mails to Chinese researchers in the construction management field. Descriptive analysis is used for data analysis.FindingsIt is found that cultural considerations inhibit proper implementation of risk management in China's construction industry. It is also found that the perception and attitude of contractors play an important role in developing risk management. Accordingly, an organizational learning of a risk management model is designed and proposed as an organizational learning process through collaborative teamwork to improve risk management and create a learning organization.Research limitations/implicationsThe major limitation is the sample size. A much larger sample size allows comparisons among different groups of contractors, regions, etc.Originality/valueThis empirical research identifies the real challenge of application of risk management in China's construction industry. It proposes a realistic organizational learning model through collaborative teamwork which could help Chinese contractors to improve their risk management.