• About
  • Subscribe
  • Contact
Wednesday, April 30, 2025
    Login
FutureCFO
  • Business Insights
    • Competencies and Capabilities
    • Digital Transformation
    • Leadership and Roles
    • Mergers and Acquisitions
    • Risk and Regulation
    • Strategies and Tactics
  • Operations
    • Audit and Compliance
    • Finance Accounting and Reporting
    • Operational Accounting and Control
    • Tax Management and Optimization
    • Treasury and Cash Management
  • Technology
    • Artificial Intelligence
    • Automation
    • Big Data
    • Blockchain
    • Business Applications
    • Cloud, Platforms and Ecosystems
    • Future Technology
  • Resources
    • Whitepapers
    • PodChats
    • Videos
  • Events
  • Awards
  • Knowledge Hub
    • Sustainable Finance
No Result
View All Result
  • Business Insights
    • Competencies and Capabilities
    • Digital Transformation
    • Leadership and Roles
    • Mergers and Acquisitions
    • Risk and Regulation
    • Strategies and Tactics
  • Operations
    • Audit and Compliance
    • Finance Accounting and Reporting
    • Operational Accounting and Control
    • Tax Management and Optimization
    • Treasury and Cash Management
  • Technology
    • Artificial Intelligence
    • Automation
    • Big Data
    • Blockchain
    • Business Applications
    • Cloud, Platforms and Ecosystems
    • Future Technology
  • Resources
    • Whitepapers
    • PodChats
    • Videos
  • Events
  • Awards
  • Knowledge Hub
    • Sustainable Finance
No Result
View All Result
FutureCFO
No Result
View All Result
Home Business Insights

CFOs: Are you firms business interruption insured?

FutureCFO Editors by FutureCFO Editors
May 19, 2023
risk

Image by Mohamed Hassan on Pixabay

While organisations are recovering from business interruption and supply chain disruption brought by the Covid-19 pandemic, new emerging disruptions and risks are facing them post pandemic, said WTW recently.

Emerging disruptions
According to WTW’s Global Supply Chain Risk Report 2023, new emerging disruptions and risks include the followings:

Economic risks: Economic uncertainty emerged as the leading factor underlying supply chain risks, ranked by 32% as being among their top concerns. Inflation was also named among the leading contributors at 26%.

Cyber risks: Growing digitalisation and automation of production and processes increase the risks of cyber-attacks on suppliers. Survey respondents believed cyber risks to have the most profound effect on supply chains, rated by 34% as a high impact and 54% as medium.

Sustainability: 83% of respondents agreed that sustainability of supply chain is a key goal in risk management. More than half (54%) place climate change and environment among the top global trends affecting their supply chain risks.

Geopolitics: More than a third (35%) said geopolitical factors were among the top global trends affecting their supply chain risks.

Pandemic: 60% of respondents continue to put pandemics among the top global trends affecting their supply chain risks. Legacy issues, including continuing shortages of raw materials (39%), logistics and warehousing (35%), components (33%), and drivers (28%) were all among the top supply chain factors that will impact businesses over the next two years.

From multiple geopolitical tensions to ongoing inflationary pressures, global uncertainty is adding complexity to businesses just as they are recovering from the supply chain crisis, said Luke Ware, Head of Corporate Risk & Broking, Asia, WTW.

“Businesses will now be in catch-up mode against a disruptive environment, facing challenges such as switches in sourcing models, rapid on-boarding of alternate suppliers and issues impacting production and souring of materials,” he noted.

In complex supply chains with hundreds or even thousands of moving parts, risk can come anywhere along the chain, WTW pointed out. 

Particularly in highly specialised sectors, companies can be dependent on a single supplier for an ingredient or key component that is critical to production, the firm said. 

Even the loss of one can have a major disruptive impact if an alternative is not readily available, the firm added. 

This may explain why almost half (48%) of the respondents said that upstream risks were a great threat to their businesses, as compared to downstream risks (19%), such as logistics and shipping, WTW noted, adding that this sentiment was particularly high in the semi-conductor (54%) and renewables (53%) sectors.

While the large majority of businesses recognise that insurance has a role to play, insurance to cover purely financial supply chain losses provides only a wafer-thin patchwork of protection, Ware said. 

Major coverage gaps were exposed by the pandemic, and companies remain un- or under-insured, he added

According to the WTW survey, fewer than one in five companies have specific policies to cover supply chain business interruption. 

Businesses in all sectors need to transfer their significant exposures, while ensuring their business interruption insurance is regularly reviewed and adequately insured to achieve true resilience, Ware advised.

The survey was conducted late last year among 800 C-suite officers and heads of risk, supply chain management, and logistics at companies with revenues greater than US$250 million in the life sciences, semiconductors, food beverage & agriculture, logistics, complex manufacturing, construction, energy, and renewables sectors, including companies in Asia Pacific, said WTW.

Recent supply chain disruptions
Part of the survey results highlighted how recent supply chain disruptions have increased the importance of business interruption insurance to senior decision makers, WTW pointed out.

  • 65% of respondents said supply chain-related losses were higher or much higher than expected over the past two years, although 58% said the sales impact was short-term.
  • 83% have made supply chain changes, including 18% that completely transformed their approach. 58% plan to make significant changes over the next two years.
  • 73% said supplier unwillingness to share commercial information makes full supply chain transparency difficult to achieve.
  • 89% believe insurance of supply chain risks is “mission critical” or “necessary,” but 80% said their lack of coverage poses a serious challenge.
  • Only 17% of respondents have specific insurance to cover supply chain business interruption risks, but 53% believe it is covered by other insurance.
Related:  Global growth opportunities outweigh elevated geopolitical, economic risks 
Tags: insuranceriskssupply chainWTW
FutureCFO Editors

FutureCFO Editors

No Result
View All Result

Recent Posts

  • Modernising Days Sales Outstanding (DSO) for 2025
  • A Day in the Life: Shelly Maneth from Red Hat Asia Pacific
  • Singapore Inc: Expanding horizons in ASEAN and beyond
  • Technology essentials for the modern CFO
  • Transforming budgeting through automation

Categories

  • Artificial Intelligence
  • Audit and Compliance
  • Automation
  • Big Data
  • Blockchain
  • Business Applications
  • Business Insights
  • Case Studies
  • Cloud, Platforms and Ecosystems
  • Competencies and Capabilities
  • Digital Transformation
  • eBooks and eBriefs
  • ESG and sustainability
  • Finance Accounting and Reporting
  • Future Technology
  • General
  • Infographics
  • Leadership and Roles
  • Mergers and Acquisitions
  • Operational Accounting and Control
  • Operations
  • Polls and Surveys
  • Resources
  • Risk and Regulation
  • Strategies and Tactics
  • Tax Management and Optimization
  • Technology
  • Treasury and Cash Management
  • Videos/Tutorials
  • Webcasts/Podcasts
  • White Papers

Strategic Insights for Finance Executives

FutureCFO.net is about empowering the CFO and the Finance Team to take on the leadership position in the digitalization of the enterprise. It's more than just a portal for the exchange of industry best practices, it is about creating and growing a community of finance professionals able to share learned experiences, providing a platform for the current and next generation of finance leaders and professionals.

Quick Links

  • Videos
  • Resources
  • Subscribe
  • Contact

Cxociety Media Brands

  • FutureIoT
  • FutureCFO
  • FutureCIO
  • Privacy Policy
  • Terms of Use
  • Cookie Policy

Copyright © 2022 Cxociety Pte Ltd | Designed by Pixl

Login to your account below

or

Not a member yet? Register here

Forgotten Password?

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Business Insights
    • Competencies and Capabilities
    • Digital Transformation
    • Leadership and Roles
    • Mergers and Acquisitions
    • Risk and Regulation
    • Strategies and Tactics
  • Operations
    • Audit and Compliance
    • Finance Accounting and Reporting
    • Operational Accounting and Control
    • Tax Management and Optimization
    • Treasury and Cash Management
  • Technology
    • Artificial Intelligence
    • Automation
    • Big Data
    • Blockchain
    • Business Applications
    • Cloud, Platforms and Ecosystems
    • Future Technology
  • Resources
    • Whitepapers
    • PodChats
    • Videos
  • Events
  • Awards
  • Knowledge Hub
    • Sustainable Finance
Login

Copyright © 2022 Cxociety Pte Ltd | Designed by Pixl

Subscribe