Challenges of Risk Management and Insurance in Iran Construction Industry
Morteza Sayareh1, Mojtaba Mohamadnejadi Moodi2
1Morteza Sayareh, Chabahar Maritime University, Sistan and Baluchestan Province, Iran.
2Mojtaba Mohamadnejadi Moodi, Chabahar Maritime University, Sistan and Baluchestan Province, Iran.
Manuscript received on May 22, 2017. | Revised Manuscript received on May 30, 2017. | Manuscript published on June 15, 2017. | PP: 1-9 | Volume-2 Issue-11, June 2017. | Retrieval Number: K01550521117
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Abstract: With regard to construction sector and insurance sector relationship, effective risk management is believed to have a significant effect on insurance coverage development as well as construction sector’s competitive advantage through improved operation quality. In this research therefore, we set out to conduct a survey among construction sector and respective insurance companies’ management and experts. Our aim evolved around the idea that this sample could delineate the literature on this subject regarding the key and critical issues existing between them. To analyze the data we used one sample student t test. The results indicate that, most important impediment to effective risk management in this sector is managers’ lack of appropriate understanding in both sectors concerning risk management and its applications. Results also indicate that uncertainty accumulation in absence of effective risk management lead to cost increase both in construction projects and in insurance fees. Furthermore, lack of specialized knowledge on both side from each other, lack of standard insurance procedures, result in miscommunication between the two sectors. Suggestion is proposed based on result and literature review. This is the first research, to our knowledge, studying risk management implementation in Iranian construction sector.
Keywords: Risk Management, Insurance, Construction Industry, JEL Classification: G22, G31, L74.