Heightened Supply Chain Risks Could Result in Increased Insurance Claims

The supply chain management industry must navigate through challenging waters once again.

The global supply chain is facing unprecedented challenges that could lead to a surge in insurance claims, as disruptions continue to ripple through major trade routes worldwide. Geopolitical tensions and logistical bottlenecks are exacerbating shipping delays, raising concerns about heightened business interruption risks.

Paul Burgess, the global head of multi-national claims at Sompo International, emphasized the importance of resilience and agility in supply chain management amidst these uncertainties. Speaking at the Insurance Innovators conference in London, Burgess highlighted the need for innovative solutions within the insurance industry to address evolving risks.

Recent geopolitical developments, including missile attacks on ships in the Red Sea and Russia's invasion of Ukraine, have further complicated maritime activities. This has forced freight to reroute through alternative paths, such as the Cape of Good Hope, leading to significant delays and logistical complications.

Burgess emphasized that these disruptions entail additional costs for insurers, businesses, and consumers alike. As the industry navigates through these turbulent times, there is a growing imperative for proactive risk management strategies and collaborative efforts to mitigate potential losses.

The ongoing supply chain disruptions serve as a reminder of the importance of preparedness and flexibility in managing unforeseen challenges. With continued geopolitical tensions and evolving market dynamics, businesses and insurers must remain vigilant and adaptive to safeguard against potential risks and ensure business continuity.