Consumer demand recovered fast from the initial COVID-19 impact but as movement restrictions and labour shortages caused factories to slow down, so supply faltered, with shortages in some areas like semiconductor chips impacting everything from manufacturing through gaming, telecoms and medical devices.
What began as local supply issues fast compounded into a global demand-supply dislocation. This situation was exacerbated further by cyber-attacks on infrastructure and floods that disrupted manufacturing and severed railway links in China and Europe.
Some 42% of Healthcare and Life Sciences businesses in the US and UK predicted supply chain risk would be their primary concern in this risk category this year – more than any other sector we surveyed – with concern particularly elevated in the US.
Supply chain challenges, labour shortages and rising costs present real potential to drive claims activity as well as resulting losses. A major concern is reliance on specialised staff, who may be over-stretched or burnt out, or who may be covered for by under-trained substitutes, feeding into a worsening claims picture.
Beth DiamondGroup Head of Claims, Beazley