The disparity between supply and demand is being felt across the nation – resulting in reduced operations and increased costs just to keep the doors open and customers happy.
Global labour shortages and supply chain issues have meant that bottlenecks are piling up all over the world, putting extra pressure on our local supply chains.
Significant strain has also been placed on insurers as extended lead times and fickle expectation dates restrict the ability to assess, quote and resolve a claim in an appropriate timeframe – and at a high level of service. Leaving insurers stuck in a loop with new supply chain pressures constantly arising.
If supply chain challenges are adding pressures to your business, you’re not alone – organisations industry-wide are facing the same issues and impacts.
Two supply chain shortage challenges we see impacting insurers most are rising costs and the fluctuation of risk management.
1. Rising Costs
The price of commodities has risen across the board placing undue strain on all aspects of business operations. Over the last few years, building costs alone have risen by roughly 20% across the United Kingdom.
With claimants unable to afford to have their claims resolved by the national repair network, significant pressure is being placed on insurers to find and maintain their own network of builders and repairers – in an attempt to ensure claimants can have their claims resolved for the remuneration they are covered to receive.
2. Risk Management
Flexibility in risk management has been a crucial requirement of insurers over the past few years as claimant needs are continually changing – with many shopping between brokers and insurers to test their coverage.
Revealing gaps in coverage means that risk managers and underwriters alike are continually needing to evaluate the situation and modify policies and inclusions to match both the needs of claimants and the ability of their team.
As the unprecedented and unpredictable nature of the past two years continues to unfold, insurers are still required to plan for an unclear future. Without a tight process around risk management, inclusions, and policies, insurers across the UK will continue to feel the pressure of supply chain shortages and business interruptions.
No matter what pressures you may be facing, the wake-up call has been heard with insurers beginning to understand the importance of supply chain resilience in building a sustainable future.
Here are Gallagher Bassett’s top recommendations to achieving supply chain resilience:
Widen your provider network
Labour and supply shortages, rising costs and uncertainty around coverage inclusions are only some of the factors influencing current challenges around resolving claims. Building a centrally standardised and organised operations network will empower your team to make appropriate decisions no matter the circumstance.
A strong core will allow your business to extend to new providers and vendors or even outsource to leverage potential growth.
Now is the time to widen your provider network, ensuring potential supply chain pressures are minimised before they have the chance to arise. Through strong relationships and standardised procedures, you’ll be able to maintain considered and reasonable expectations around policy inclusions and associated costs.
Establish your value proposition
Where there is disparity between supply and demand, loyalty often goes out the door.
With claimants having to settle for higher prices and commodities that don’t quite meet what they would have otherwise chosen, evaluating, or rather defining, your value proposition is a requirement to retaining business when your supply doesn’t meet claimant demands.
The claims process can be emotional for some claimants. Knowing that they are valued and supported, rather than handed between claim managers, particularly in times of low supply, is important to strengthening your value proposition. Ensuring a potential TPA partner has not only the depth of experience and empathy required to deliver quality claims management, but also a steady and reliable workforce, is essential in delivering upon your value to claimants.
Eager to achieve supply chain resilience?
Expanding your provider network and outsourcing to a team of specialists who have the know-how to provide tailor-made support will equip you with the agility needed to face any new challenge – supporting you in reducing your Total Cost of Risk (TCOR).
Backed by more than 40 years of industry know-how, Gallagher Bassett’s team of experts understand the volatility of the insurance landscape and how important it is to be a steady pair of hands to support claimants in their time of need and to protect your brand’s reputation.
Connect with our team today to find out how Gallagher Bassett can elevate your business and help you take it from strength to strength.