New Collaboration to Address Supply Chain Risks in Re/Insurance Industry (Insurance Business)

New Collaboration to Address Supply Chain Risks in Re/Insurance Industry

Monday, May 20th, 2024 Marine Property Risk Management Technology

Gallagher Re and Oxford University’s Program for Sustainable Infrastructure Systems (OPSIS) have launched a collaborative research initiative aimed at helping re/insurers comprehend critical chokepoints in the global supply chain. This research will address disruptions caused by geopolitical conflicts and other systemic risks, enhancing the industry’s ability to model and mitigate these effects.

The global shipping network, which facilitates 80% of the world’s trade, faces numerous challenges due to geopolitical tensions and post-COVID-19 disruptions. The new research, led by Gallagher Re and OPSIS, will analyze the repercussions of these disruptions on global supply chains, creating realistic disaster scenarios to aid re/insurers.

Dr. Iain Willis, director of the Gallagher Research Centre, emphasized the importance of understanding the multifaceted causes of supply chain disruptions, whether they stem from geopolitical, environmental, or systemic risks like pandemics. The research aims to model the ripple effects of these disruptions, given their potential to impact multiple lines of re/insurance.

Despite the robustness of the global supply chain, key chokepoints can lead to significant operational challenges. Rerouted vessels often face longer journeys, increased fuel consumption, and new hazards such as extreme weather or congested ports. Understanding these marine chokepoints is vital for assessing property contingent business interruption (CBI) risks.

Professor Jim Hall of Oxford University highlighted the partnership’s role in enhancing the understanding of shipping threats and the broader implications for global maritime trade. Nick Croxford, head of marine and energy at Gallagher Re, stressed the importance of exploring both the challenges and potential solutions facing the maritime insurance industry.

The collaboration will also sponsor a Gallagher Fellowship, supporting a researcher working with scientists at Oxford University’s Environmental Change Institute. This affiliation will bolster the research capabilities of both the ECI and the GRC, advancing the partnership’s objectives.

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External References & Further Reading

Mid-America Catastrophe ServicesSupportive Insurance ServicesGRIP(Globe Roof Inspection Program)

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