GCC construction in 2026: engineering and surety risk on the giga-projects

The conflict in the region knocked project awards back in the first half of 2026. Kamco Invest expects a sluggish year with a rebound from 2027, and some energy assets in the Gulf have been under force majeure. Even so, Kamco puts the upcoming GCC pipeline at around USD 2 trillion, with Saudi Arabia accounting for roughly half.

Most of the big schemes are being rephased, not cancelled. For insurers that means a long tail of engineering risk now, which turns into property risk as projects complete. AGBI made the same point about Saudi insurers late last year.

Single contracts can carry sums insured in the billions, run for years and involve dozens of contractors on the same site. At that size, the maximum loss on one policy only tells part of the story.

We look at how exposure builds up across a whole giga-project, across one contractor group, and across a single area that could be hit by the same flood or storm.

Extreme heat affects curing, materials and how much work crews can safely do, and it stretches timelines. Flash floods are rare in the Gulf, but when they come they can fill excavations, basements and plant rooms in a matter of hours.

Testing and commissioning is still where energy, desalination and power projects lose the most money. We pay close attention to commissioning plans, how involved the equipment manufacturer is, and how any prototype technology is treated.

Often the most useful thing we can learn is who is building it. Their record on similar projects, how they run a site, how they manage subcontractors and their claims history usually tell us more than the sum insured.

We ask for project schedules, values by phase, geotechnical reports, flood studies where they matter, and a clear view of how the cedant adds up exposure across projects in the same programme.

Construction all risks cover protects the works. Performance, advance payment and retention bonds protect the project owner if the contractor fails. As projects get bigger, owners want more bond capacity, and payment pressure in a slower year makes contractor strength matter even more.

Global RE writes both engineering and bonds/surety reinsurance, so we look at contractor risk from both sides. For cedants active in the GCC, that usually means a more consistent answer across their construction and surety programmes.