APAC supply chains underinsured and vulnerable – survey

APAC supply chains underinsured and vulnerable – survey | Insurance Business

APAC supply chains underinsured and vulnerable – survey
Six out of 10 organizations in the Asia-Pacific region have experienced at least one supply chain disruption in the past 12 months, with a quarter of those incidents costing over US$1 million. This was the verdict revealed by a survey conducted by the Business Continuity Institute in cooperation with Zurich Insurance.
 
Despite these worrying figures, the study showed that close to half (46%) of the surveyed organizations did not have any insurance to cover their losses.
 
According to the eighth annual Supply Chain Resilience Report, supply chain disruptions can cause significant damage to companies and their operations, affecting not only revenue, but even share prices and reputation.
 
The report showed that the top five causes of supply chain disruption in Asia-Pacific are IT/telecoms interruption, extreme weather, transportation issues, cyber attacks or data breaches, and outsourcer failures.
 
It was also revealed that only 30% of disruptions happen with an immediate supplier, meaning that most problems come further down the chain. Also, only a minority (48%) of respondents said that their organization’s management has made a commitment to supply chain resilience.
 
“Effective supply chain risk management and a comprehensive risk assessment can present significant benefits to businesses,” said Hassan Karim, technical underwriting manager for Zurich Asia-Pacific.
 
“Supply chain risk often crosses many departments within an organization due to the interconnected and far reaching scope of supply chain risk, therefore Executive support is critical to not only secure the necessary resources required to focus on supply chain risk management but also to break down organizational ‘silos’ in order to optimize performance,” Karim added.
 

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