’The risk market is changing and we need to ensure that we are with our clients from the outset,’ says chief executive
Businesses need to understand any vulnerabilities in their supply chain as the world becomes a “riskier place”.
That was according to Jake Hernandez, chief executive of Gallagher’s crisis consultancy arm AnotherDay, who also said that increased risks have created the need for insurers and brokers to enhance their support for clients.
“The risk market is changing and we need to ensure that we are with our clients from the outset,” he said at the 2024 Airmic Conference.
He added: “Without doubt the world is a riskier place. Both insurers and risk managers are being challenged to deal with new risks and there are two reasons behind this.”
Among them are worldwide events, such as Russia’s invasion of Ukraine, the ongoing conflict in the Middle East and the potential for political unrest around Taiwan.
Hernandez said the conflicts were putting pressure on the global supply chain, but for many businesses they were often unaware of how far their supply chain could stretch.
“There are few, if any businesses in the UK, which have supply chains that will not involve a relationship with an Asian business,” he explained.
“They may say ‘we don’t have a link with Taiwan’, but if they need technology of computer chips, it is likely they will emanate from Taiwan and so any issue which impacts the ability for those items to be exported will have an effect. It may just be they face longer delivery times and increased costs.
“You may not think you have links with say Asian businesses, but that may well be because all you see are your first party partners. They may well have first or secondary partners in an area where the risks are increasing, so it is important to understand just how far your supply chain spreads.”
Technology
Hernandez also felt that the increasing involvement of technology in business was increasing risk.
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“10 to 12 years ago, we saw an explosion in technology and social media has changed things a great deal,” he said.
“It is not highly regulated and it is creating tensions in a number of areas where there were not tensions before.
“Government have been slow to respond to the risks and we have to factor, in that the next 10 years, we will see the increasing use of artificial intelligence and that will create new uncertainty.”
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