More European corporates buying supply chain cover: Allianz Trade

Demand for supply chain insurances from European corporates has increased, according to Allianz Trade, as global challenges continue to affect operations and the smooth supply of goods and parts from other parts of the world. On publishing its Global Trade Report 2024, Allianz Trade said more corporates in Poland (37%), France (36%), the UK (35%), Germany (34%) and Italy (28%) have bought cover to protect against supply chain disruption, while the level remains unchanged in Spain at 32% and compares with a global-wide average of 34%. Supply chain insurance has moved from the seventh-most favoured avenue to mitigate disruption in supply chains to third, behind improving supply chain risk and increasing ESG due diligence on suppliers, Allianz Trade says. Companies in Germany are most likely to consider relocating parts of their supply chain due to increasing geopolitical risk, Allianz Trade says, at 62%, above the global average of 53%. However, the option is less favoured by respondents in the UK (48%) and Italy (46%). More than half of UK companies (55%) have their top offshore production sites in Western and Eastern Europe, compared with 65% of European peers, with UK firms more exposed to supply chain risks in North America, where it houses 35% of production sites compared with 17% for other European countries. Allianz Trade says the UK is also more exposed to critical dependencies from China compared to other European countries, with 74% of critical imports coming from the country. The survey finds that rising geopolitical tensions and protectionism has pushed UK companies to dial back their offshore supply chain reliance, with 61% of UK companies exposed to long supply chains considering relocating parts of it due to increasing geopolitical risks. Half of them expect reshoring to continue at a similar rate over the next two years, with Western Europe the most preferred region for relocating offshore production and suppliers. Corporates in the UK and Spain are the most confident they will increase exports in 2024 against a set of global peers. The majority of exporters from both countries at 87% expect to increase turnover from exports by more than 2% this year, with corporates in France and Italy also more optimistic than the global average at 84% each. Exporters from Germany are more conservative on their growth forecasts, with 80% expecting an increase of +2%, while respondents from Poland recorded just 74%. This compares with a global average, including corporates from China and the US, of 84%. Spanish businesses emerge as the most confident for growth in the higher range of +5%, backed by 41% of respondents, followed by Italy and Germany at 38% each, and France and Poland at 37%, while respondents from the UK polled the lowest of its European peers at 32%. Globally, risks to supply chains remain top of mind for corporates surveyed, with respondents in France and the UK naming concentration and complexity as the biggest threat to their supply chains, while Spain’s top concern is geopolitical risk. Germany was the only country to place ESG risks as the top threat to supply chains, while respondents from Italy were most concerned about shortages.

More European corporates buying supply chain cover: Allianz Trade

Want to read this article?

Read Next

Europe will ‘push ahead’ with climate policies amid US shift: Eiopa

India’s Reserve Bank to address climate risks

MSIG expands political risk and trade credit capabilities in Asia

Lloyd’s approval for Africa Specialty Risks North Africa

France investigates TotalEnergies over liability for Mozambique terror attack

Europe will ‘push ahead’ with climate policies amid US shift: Eiopa

India’s Reserve Bank to address climate risks

MSIG expands political risk and trade credit capabilities in Asia

Lloyd’s approval for Africa Specialty Risks North Africa

France investigates TotalEnergies over liability for Mozambique terror attack

Keep yourself informed

Sign up for Commercial Risk’s newsletters

Want to read this article?

Read Next

Europe will ‘push ahead’ with climate policies amid US shift: Eiopa

India’s Reserve Bank to address climate risks

MSIG expands political risk and trade credit capabilities in Asia

Lloyd’s approval for Africa Specialty Risks North Africa

France investigates TotalEnergies over liability for Mozambique terror attack

Related Articles

Keep yourself informed

Sign up for Commercial Risk’s newsletters