Supply Chain Insurance Market Procurement Intelligence, Supplier Intelligence, Supplier Ranking, Pricing & Cost Structure Intelligence, Best Practices, Engagement Model, Low & Best Cost Country, Day One Analysis Report, 2020 - 2025

Procurement Outlook

With increasing complexities in developing an efficient supply chain for better outsourcing activities the likelihood of getting disruption in the supply chain has also increased. These disruptions can cause by various reasons outside the control of the organization such as, natural disasters, accidents, labor crisis, political instability, financial disruption, disruption to transportation infrastructure, etc. Hence, an organization needs to have supply chain insurance in place for any supply chain disruption. The two coverages that will cover supply-chain issues are contingent business interruption (CBI) insurance and broad, specialized supply-chain insurance. These insurance policies will reimburse both potential lost profits as well as costs caused by disruptions to the insured’s supply chain, even if the insured itself has not suffered any damage.

Demand Outlook

The global supply chain insurance market is valued at USD2.5 billion in 2020 and it is expected to grow at a CAGR of 4% from 2020 to 2025 due to the high adoption of supply chain insurance from medium and large-sized organizations across manufacturing, transportation, and logistics, pharmaceuticals, and food & beverages sectors. High anti-dumping duties imposed by the governments in countries such as China, the US, France, Germany, and India are expected to increase the price of exported supply chain insurance. North America is leading the supply chain insurance market with more than 35% revenue share followed by Europe (~30%) and APAC (~25%).

Cost Drivers

The salary of the personnel developing the insurance policies is one of the major components of developing supply chain insurance. The cost of the insurance also depends on the policy terms, company size, geographic location, and criticality of a business.

Constraints

Between the two types of supply chain insurances, CBI insurance has some limitations. It will only protect the insured if the entity it depends on has suffered physical damage caused by a covered peril, such as a fire or flood damaging a factory they rely on. It will not cover losses caused by political disruptions, labor or production problems, road closures, or bankruptcy of the insured’s partner/supplier. The CBI insurer may require the insured to identify the specific supplier and partner locations to be covered by the policy. If the insured change suppliers fail to update their policy and then a disruption occurs, the insured will not be covered by the policy. Additionally, the insurer will expect the insured to list the property as "dependent property" when purchasing insurance and may not cover properties that are not listed.

Supply Chain

Zurich Insurance Group Ltd., American International Group Inc., Berkshire Hathaway Inc., Munich RE, Allianz SE, Marsh LLC, If P&C Insurance Ltd, Swiss Re, Morris & Reynolds Insurance, Kaercher Insurance are some of the key providers of supply chain insurances. Leading suppliers are strengthening their presence through multiple mergers and acquisitions. Grand View Research will help our client identify the best-suited suppliers by mapping their core capabilities and operational efficiency.