Insurability in relation to supply chains is currently only possible in rudimentary form, as the insurance industry is also not yet in a position to map complex supply chains transparently. Individual market participants such as Swiss Re are currently working on digital solutions.
GrECo Risk Engineering implements and controls the Business Continuity Management (BCM) of numerous clients. The question of whether BCM can also identify and manage risk potentials within the supply chain arises more and more frequently.
BCM prepares companies to regain their ability to deliver as quickly as possible after a business interruption or shutdown. Acting instead of reacting is the motto here.
Identifying loss events within a company, assessing them and finding effective preventive measures requires a lot of experience and methodical knowledge. But it also ties up considerable internal company resources in order to be best prepared for the worst-case scenario. Risks that affect a company externally, such as the dependence on suppliers or entire supply chains, make the issue far more difficult.
Most manufacturing companies operate extensive systems for supplier selection and evaluation. The focus is often on delivery reliability, quality, price and economic parameters. However, the consideration of suppliers in terms of their exposure to operational risks such as fire or natural hazards is often neglected. In the case of direct suppliers, this is still possible with a corresponding expenditure of resources and can be argued to the supplier as necessary.
Where transparency ends – Supply Chain Insurability
However, when it comes to the supplier suppliers, the limits of what is organisationally, legally and economically feasible are quickly reached. “Deep-diving” into supplier structures thus belongs to an exotic discipline that hardly anyone can afford at present. How can a company now prepare for supply chain disruptions or better protect itself against them?
Insurability in relation to supply chains is currently only possible in rudimentary form, as the insurance industry is also not yet in a position to map complex supply chains transparently. Individual market participants such as Swiss Re are currently working on digital solutions to identify locations via extensive databases, which can lead to supply bottlenecks across industries in the automotive sector, for example. In most cases, however, any cumulative losses cannot be sufficiently estimated, and a risk transfer is often not possible. It is therefore essential to actively address this risk within the company.
One approach that is recommended in this case is to raise awareness among one’s own key suppliers so that they collect appropriate risk information from their suppliers or commission experts to identify possible potential exposures. If neither of these is possible, knowledge of one’s own “white spots” in the supply chain is still a parameter that should flow into the selection of suppliers and lead to the examination of alternatives. This is also part of a practised and practicable business continuity management.
Related Insights
Investing in Backup Systems to boost resilience: Interview with Mariana Kühnel
Mariana Kühnel, Deputy General Secretary of the Austrian Chamber of Commerce spoke about staying calm in these unpredictable times and how Europe can gain comparative advantages.
The New Silk Roads
This article will provoke thoughts and create awareness about the new political world order, the changing influence of Western and Eastern powers as well as the emergence and formation of a new centre of gravity in the global economy. It takes a close look at an emerging geopolitical dominance…
Managing the risks of Black Swan events
Emerging risks and new threats that are hard to grasp and estimate are a much-discussed topic. Add to that today’s increasing number of Black Swan events. These are unprecedented and unexpected events which nobody could have imagined, making them almost impossible to predict.

Johannes Vogl
General Manager GrECo Risk Engineering
T +43 664 883 805 04