The surety market is maturing quickly and growth is likely to continue, according to Aon's 2025 Global Construction Insurance and Surety Market report.
Countries like Australia and Korea have well-established surety markets, and the use of surety as a guarantee solution is expected to grow significantly in other parts of Asia, particularly in China and India, fuelled by economic expansion and accelerating infrastructure development, the report said.
The infrastructure investment need in the region is expected to be $1.7tn annually up until 2030.
In the near term, India is anticipated to experience robust demand for surety products, driven by recent regulatory developments.
The report also said the energy and banking sectors exhibit a strong growth outlook, but growth may be slower in the residential sector.
The energy sector is seeing encouraging developments in export-related guarantees, alongside growing interest from banks exploring surety as a viable alternative to traditional forms of guarantees.
However, following a challenging period of claims in the residential sector across parts of APAC, the overall risk outlook for 2025 remains cautious, especially concerning construction-related guarantees in markets such as Australia, Hong Kong and Singapore, the report said.
While pricing has remained stable across Asia, rates have risen in Australia. Looking ahead to 2025, pricing will continue to be shaped by supply and demand dynamics on a case-by-case basis, with investment-grade entities expected to see the most favourable terms.