Concerns expressed over lean supply chains in harsh economic climate
Business interruption (BI) and supply chain are the key risks faced by global companies in 2013, according to new research. The susceptibility of company operations’ to forces majeures and fire and explosion are also highlighted as major areas of concern by the Allianz Risk Barometer 2013.
46% of corporate and industrial insurance experts expressed concern about companies running lean global supply chains as a way to reduce costs in the current financial climate, saying many are leaving themselves exposed due to a lack of alternative suppliers. “The flooding disaster in Thailand showed that business interruption at a key supplier can cause a ripple effect felt across an entire industry,” explains AGCS property insurance expert Volker Münch.
Losses due to natural disasters – often the main cause behind business interruption – have increased in recent years, and NatCats are listed as the second-largest business risk, after receiving 44% of the vote. “Insurance claims caused by natural disasters have risen 15-fold over the past 30 years,” points out Markus Stowasser, meteorologist at Allianz Re. Europe. “And they will continue to grow because of the increase in insured assets in Asia, in particular, and the ongoing shift towards development in high-risk coastal regions.”
529 experts from 28 countries took part in the Allianz Risk Barometer 2013, and ranked the top ten concerns of businesses globally rank as follows:
1. Business interruption, supply chain risk
2. Natural catastrophes such as storm, flood, earthquake
3. Fire, explosion
4. Changes in legislation
5. Intensified competition
6. Quality deficiencies, serial defects
7. Market fluctuations
8. Market stagnation or decline
9. Euro zone breakdown
10. Loss of reputation or brand value
Responses varied by region. While German experts identify business interruption and natural disasters as thetop two risks, their third-greatest concern – particularly for large industrial enterprises – is quality deficiencies and serial defects. In the UK, on the other hand, reputation and loss of brand value featured highly on respondent’s lists.
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