Could the P&C industry have anticipated current supply chain issues?
Pandemic-related supply chain interruptions have been contributing factors to rising commercial client exposures, and this outcome could have been anticipated, say panellists in a Canadian Underwriter webinar.
“When you think about firms who have offshored, whether it be processing, or data entry…I don’t know that we necessarily contemplated the impact that a closure in India might have, because of the pandemic, on your ability to process invoices or your ability to model things,” says Jennifer Hill, head of customer, distribution, marketing and regional management at Zurich Canada.
“[These are things] that you contemplate, but until they were real, we didn’t necessarily have to react to them,” she adds.
While these factors could have been anticipable, they nevertheless created a massive issue for the industry.
“We all knew about macro[economic] fragility and interconnectedness, but I don’t think any of us anticipated, frankly, the impact on supply chain and even, to a large degree, talent,” Hill says.
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Other supply chain stressors included sick, remote or absent workers.
“You had your workforce who were either coming down ill or perhaps not wanting to attend work,” says Hill. “You had interruptions as a result of just not being able to staff your business or to get people there to process the raw materials that you might have been using.”
Cross-border supply chain issues were also exacerbated by the pandemic, she adds. “The border closed; suddenly we have an issue of getting supplies across the border.
“All of these were probably things we could have anticipated, [but] in dealing with them, it was a massive issue for our customers and our industry as a whole.”
However, pandemic supply chain issues aren’t the only headwind the industry is facing, says Trevor Wall, vice president of sales and distribution of business insurance at Travelers Canada.
“When we look at natural disasters, inflation, financial stability, there’s really a testament to the industry on how we’re able how we’ve been able to adapt, not only as brokers, carriers and customers, but I think it shows the strength of the industry.”
However, there is an upside to how the P&C industry has collectively responded to the challenges of the pandemic.
“One of the big benefits from that is we brought customers and insurance closer to brokers. We brought brokers closer to carriers, all with the intent of trying to find solutions during this time,” says Wall.
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