Sponsored content: James Hampson, portfolio manager for manufacturing insurance at Travelers Europe, discusses how the insurance sector can provide manufacturers with some much-needed confidence that risks are managed
I’ve spent a lot of time this year talking to manufacturers and the brokers who place their risk, and one number from our latest research, Making Risk Manageable, stayed with me.
The report surveyed mid-market manufacturers across the UK and Ireland and found that 40% of manufacturing leaders report reduced confidence in their own business, against just 11% in other sectors.
That’s not a demand problem. The UK government’s Modern Industrial Strategy is aiming to more than double clean energy investment to over £30 billion by 2035, whilst manufacturing employs 2.5 million people in the UK and Ireland, accounting for roughly half of UK exports. So why the nerves?
Spend time with manufacturers and a pattern appears. The report found that more than half told us supply chain risk is on their mind daily – and it isn’t hard to see why it keeps them awake at night. Growth now depends on suppliers they can’t see three tiers down and on holding onto specialist technicians who are hard to replace.
Cyber implications
Cyber adds another layer. Manufacturing systems are increasingly connected, from production lines through to logistics, and last year’s ransomware attack on Jaguar Land Rover showed the sector what a breach in a supply chain can do.
Two-thirds of the manufacturers we spoke to said cyber now shapes their strategic planning, well above the average for other industries.
This is where I think brokers and insurers have a genuine opportunity and it’s the reason we’ve been so focused on sector insight this year.
Only 28% of manufacturing executives think insurance is doing a good job helping them manage these risks, against 57% across all sectors. That gap closes when a broker can point to specific exposures – such as tier two supplier visibility or a technician a client can’t afford to lose – and turn that into a useful conversation.
That’s what our specialist regional underwriters, cyber experts and risk control team are there for.
Rather than pricing a risk in isolation, they work with brokers to get underneath what’s actually driving a client’s confidence, from the resilience of their supply chain to the people who keep the business running, and shape cover and risk management support around it.
Manufacturers have the appetite to grow. What most of them need is confidence that the risks sitting underneath that growth are properly understood and covered. That starts with moving away from a generic combined policy pitched at any manufacturer.
Give brokers the insight to have that conversation and the confidence follows.
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