Zurich announces an additional product to its Supply Chain Risk proposition. Essential Supply Chain Insurance builds on the global insurer’s award winning supply chain offering by launching an extra simplified product. This will help many customers better understand and mitigate their supply chain risk though a thorough evaluation of their outsourced key suppliers. New product details are below.
Increasingly, many companies have turned to outsourcing as a means to reduce costs, get access to specialised knowledge and specialist skills. This increased reliance on outsourcing inevitably leads to an environment where supply chain disruptions are one of the most important and complex risks they face. As this outsourcing dependence increases so does the risk around revenue shortfall when the supply chain breakdown from a physical or non-physical event takes place (e.g. strikes, political events, IT failure, border issues or fire).
Essential Supply Chain Insurance has capacity up to US$100M (£60M) and is aimed at middle market companies across a number of sectors including manufacturing and energy. The offering is also designed to cover risks arising from direct named suppliers and supplies with the option to buy broader supply chain insurance coverage. It offers an attractive option for the middle market companies as they may have limited funds to protect themselves when they suffer a supply chain disruption.
Nick Wildgoose, Global Supply Chain Product Leader at Zurich comments:
“Non-damage supply chain interruption events have a major impact on companies, especially as these aren’t covered under standard insurance policies.
“On-going threats such as risk from cyber-attack, extreme weather caused by climate change and political risk are examples which have a knock on effect on companies, no matter where you are located in the world and irrespective their size. The loss of even a single key supply can precipitate a sales short fall having a dramatic impact on cash flow.”
Top tips to limit supply chain issues:
To help customers small and large reduce the severity of disruptions – and ultimately the impact on their bottom line, Zurich suggests companies take these simple but fundamental steps:
1) Identify all critical suppliers – not just direct suppliers
2) Focus on the relationship and management of critical suppliers, ensuring they have their own business continuity plans in place
3) Ensure that availability of key products for the entire supply chain, from raw materials to end-users, can be tracked effectively
4) Analyse the impact of failure on profits and output
5) Ensure that the Board takes responsibility for supply chain risk management
6) Take a holistic approach to supply chain risk management; threats to supplies of key raw materials and components can come from both physical and non-physical causes
Zurich Essential Supply Chain Insurance key features:
· Two specified suppliers/supplies per customer (option to increase number of suppliers/supplies)
· Fees for risk assessment typically based on 1-2 man days and costs can be deferred and included in the insurance premium
Zurich in the UK
Zurich provides a suite of general insurance and life insurance products to retail and corporate customers. The UK General Insurance division supplies personal, commercial and local authority insurance through a variety of distribution channels. Zurich’s UK Life business* offers a range of personal protection, pensions and investment policies available through financial intermediaries. UK life also provides protection and pensions policies for the corporate market available through employee benefit consultants.
Based at 21 locations all across the UK - with large sites in Birmingham, Cardiff, Farnborough, Glasgow, London, Swindon and Whiteley - Zurich employs approximately 7,000 people in the UK.
Corporate Responsibility is an integral part of how we do business and Zurich understands the need to set and maintain high standards of integrity towards our customers, employees, local communities, society and the environment. As a result of this work, Zurich participates annually in 'Business in the Community's' annual Corporate Responsibility Index. Zurich in the UK was also one of the first recipients of the Business in the Community ‘CommunityMark’. This award is the UK's only national standard that publicly recognises excellent practice in community investment which in Zurich's case is mainly delivered by the Zurich Community Trust, the charitable arm of Zurich in the UK. For more information about the Zurich's commitment to Corporate Responsibility and the Trust's work, please visit our website here.
Zurich Insurance Group (Zurich) is a leading multi-line insurer that serves its customers in global and local markets. With more than 55,000 employees, it provides a wide range of general insurance and life insurance products and services. Zurich’s customers include individuals, small businesses, and mid-sized and large companies, including multinational corporations, in more than 170 countries. The Group is headquartered in Zurich, Switzerland, where it was founded in 1872. The holding company, Zurich Insurance Group Ltd (ZURN), is listed on the SIX Swiss Exchange and has a level I American Depositary Receipt (ZURVY) program, which is traded over-the-counter on OTCQX. Further information about Zurich is available at www.zurich.com.
*Zurich’s UK Life business is operated primarily through two entities: Zurich Assurance Ltd and Sterling ISA Managers Ltd. Zurich Assurance Ltd is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Sterling ISA Managers Limited is authorised and regulated by the Financial Conduct Authority.