Airmic: Supply chain crisis calls for innovative risk transfer

Geopolitical conflicts, weather events, Brexit, labour shortages, the pandemic, port delays and power outages have kept supply chain disruptions firmly in the news. These supposed ‘once-in-a-generation’ events have taken place with increasing frequency and the impact on supply chains has been significant.

In a global economy, any one of a myriad of sudden and serious supply chain interruptions with an equally disparate number of different causes can have catastrophic consequences on an organisation’s ability to deliver to its customers, explains Airmic and McGill and Partners in a joint guide.

’Supply chains: Keeping up with the Pace’ provides a toolkit to assist directors in understanding and keeping pace with this fast-changing and increasingly complex landscape of supply chain challenges

“The challenge faced by directors in discharging their non-delegable duty to supervise a company’s affairs is especially acute when it comes to mission-critical elements of the supply chain,” explained Francis Kean, partner, Financial Lines, McGill and Partners.

”That is due to a web of increasingly complex and unpredictable risks including geopolitical, cyber-related and reputational. This guide offers directors an opportunity to stand back and re-examine some basic but important questions.”

Insurance solutions

The guide also considers how well the insurance industry is responding to the supply chain challenges faced by organisations in providing relevant and meaningful solutions.

Greater data sets and more sophisticated techniques, including parametric solutions, are beginning to offer solutions to respond to rapidly changing needs.

The guide takes the form of 12 questions, designed to break the diverse set of issues - including regulation, insurance, cyber risk, contingency planning, business interruption, ESG and geopolitics - down into a manageable series of topics. 

“Supply chains are adapting and reshaping in response to the fast changing and volatile world we operate in,” said Julia Graham, CEO of Airmic. “Boards are considering the risks associated with their supply chains and closely examining the cost benefits of current practice and changes which might be required to meet the purpose and strategic objectives of the organisations they govern.”