Australian manufacturing has changed but it has not disappeared. Specialised producers, food and beverage operations and other sectors where proximity and responsiveness carry commercial weight continue to operate across the country, and their insurance needs are rarely straightforward. A production interruption can cost far more than the physical damage alone, reputational damage, lost market share and weakened customer relationships can outlast the repair. For brokers working with mid-market manufacturers, the conversation is shifting from what insurance pays after a loss towards what can be done to prevent one occurring. For manufacturers in that middle ground, the question of what can stop production, and how quickly operations can restart, has become as commercially significant as the cover itself.
FM Essential is a broker-led property insurance solution that pairs market-compatible coverage with FM Engineering support. It targets manufacturers with medium risk complexity and excludes high-hazard industries such as chemicals. The product supports full-capacity or shared and layered placements, with quick quote turnaround and fast-tracked claims. It targets businesses across a broad range of risk maturity levels, prioritising risk-improvement ambition over strict cutoffs. Antony Cavka, FM's vice president and director for Australia and New Zealand, frames the offering plainly: 'FM Essential brings the power of FM Engineering into this market segment where we can work with businesses to build resilience.' Coverage alone, he adds, is only part of the answer. 'Coverage is one thing, and there are many options there. However, coverage with included risk identification and mitigation solutions builds resilience.'
World Bank data shows manufacturing's share of Australia's GDP fell to about 5% in 2025, down from close to 14% in 1990. The story is not simple. Large-scale, standardised production faces intense import competition. Specialised and higher-value goods have held their ground. 'Not all manufacturing has disappeared. It has often been the larger-volume, standard-size products facing the largest competition from imports,' Cavka says. Food and beverage production is one area where proximity still matters commercially. 'Specialised, value-added manufacturing remains competitive in Australia. Another area is food and beverage, where long shipping times can consume much of the shelf life of FMCG-type goods,' Cavka explains. A production interruption in these sectors carries consequences specific to the individual business.
Physical damage is the visible part of a manufacturing loss. The less visible part can be larger. 'Downtime exposes a company to many impacts on the business that aren't insured. These include reputational damage, loss of market share, loss of skilled labour and so on,' Cavka explains. Insurance addresses the insurable portion. It cannot necessarily restore relationships or market position weakened while production was offline. 'Insurance may replace property and insurable profit, however, what is the business environment like when you do return to production?' Cavka asks. An interruption that creates lengthy downtime has a negative impact on brand and can compromise market share. A broker working with a manufacturing client therefore has a broader conversation to hold, one that covers what causes an interruption, how quickly the operation recovers and what happens during that recovery period.
Every manufacturing process has dependencies. Some are obvious. Others only become visible when something goes wrong. A business might rely on a single piece of equipment, a specialist component or a utility that cannot easily be replicated elsewhere. 'One key aspect is the resilience of their process and understanding what their bottlenecks and vulnerabilities are,' Cavka says. The underlying point is simple: a manufacturer needs to know what can actually stop the operation, not assume that risk sits only in the most expensive asset. 'Being able to quickly recover from interruption can mean the difference between being down for a few hours or days to months,' Cavka explains. A manufacturer that has identified its critical dependencies can improve maintenance, establish alternative arrangements and address physical vulnerabilities before a loss occurs.
Energy costs sit outside traditional discussions of physical damage. They are shaping manufacturing exposure in ways a standardised insurance approach can miss. 'Energy costs and their impact on local sites, plus the supply cost of raw materials, are key pressures manufacturers are facing,' Cavka says. This matters for businesses whose processes depend heavily on electricity, heat or refrigeration. Increases in raw material costs can affect the economics of production before any physical loss happens. A manufacturing business is not simply a building containing machinery. Its exposure is shaped by how the plant operates, what it consumes and how dependent it is on individual parts of the process. Brokers who understand the operation can have a more useful conversation about exposure.
There is a particular challenge for manufacturers sitting between the small business end of the market and Australia's largest industrial operations. They can have sophisticated production processes and significant exposures, yet may not have the resources to maintain a large risk management function. 'Having an insurer that can understand a manufacturer's business and exposures [has been a challenge for brokers and manufacturers]. Smaller complex manufacturers may also not have the scale to implement risk management internally,' Cavka says. FM Essential is designed to fill that gap. The manufacturer brings detailed knowledge of its operation; the broker brings understanding of the insurance market; FM Engineering brings technical expertise. Brokers looking for specialist manufacturing insurance resources can find further analysis on Insurance Business Australia's premium hub.
A manufacturer that prevents a major interruption receives no claims payment. It simply continues producing, serving customers and employing its workforce. Prevention is harder to measure than recovery. It can be more valuable. Beyond machinery, a business that retains production may retain customers, skilled workers and the market position it has spent years establishing. 'The loss you don't have and never have to recover from helps you keep and grow what you have worked so hard to build,' Cavka says. FM Essential's engineering-led approach follows that logic. FM, established nearly two centuries ago, is a mutual insurer whose capital, scientific research capability and engineering expertise are solely dedicated to property risk management. Its policyholders include one in every four Fortune 500 companies.
Antony Cavka: vice president and director for Australia and New Zealand, FM; leads FM's operations and client relationships across the ANZ region.