A claim-based risk mapping of contractor's all-risk insurance in Indonesia

Contractor's all-risk (CAR) insurance is widely used in construction. Although it constitutes a small fraction of the global insurance sector, it records higher claims than other types of insurance. Therefore, identifying the root cause or origin of potential losses is pivotal. This study aims to map CAR insurance risks based on historical data from the policies and claims of two major Indonesian insurance firms. This study employed descriptive statistics to summarize the frequency and characteristics of claim values for each risk and the Mann–Whitney and Kruskal–Wallis tests to determine significant differences in claim values among several attributes. The Shapiro–Wilk test was used to assess data normality. Of the 76 identified risks based on previous studies, 15 led to CAR claims, with six risks accounting for 77% of the overall claim values. Most risks causing substantial claims are attributed to natural and man-made disasters. While the geographical area (Java and outside Java island) emerged as a determining factor in claim values, no significant differences in normalized claim values were found for different stages of work progress (<25%, 25% to 50%, >50% to 75%, >75%) or types of construction projects (infrastructure, building, and industrial). This study acknowledges the limitations arising from the incompleteness of the data. Despite these limitations, this study can pave the way for further research, such as examining the influence of project characteristics on the likelihood of claims and quantifying these characteristics to help calculate the premium value of CAR insurance.