Systemic risks and supply chain top agenda for GVNW members

German risk and insurance managers are facing up to the same big systemic, macroeconomic and financial risks as their peers across Europe. But for such an export-dependent economy and one so reliant upon energy from Russia, it is perhaps no surprise that supply chain and energy risk are currently high on the corporate agenda. Taking part in our Risk Frontiers Europe survey, Alexander Mahnke, president of the GVNW, said the main concerns of German risk managers remain systemic risks, which the traditional insurance market is currently struggling to find answers to. “Highest on the agenda are really all systemic risks. We had two and half years of the pandemic, rising cyber risks and natural catastrophes, all of which cannot be adequately handled by the insurance market alone. Connected to these risks is the huge strain being placed on supply chains and the impact of the war in Ukraine, coupled with scenarios such as cyberattacks on European infrastructure,” he said. Fellow GVNW board member Mathieas Kohl added inflation to the list. “Inflation is also linked to the supply chain risk. We have numbers of orders but it takes time to fulfil them for customers because of supply chain strains. At the same time, prices of supplies are rising, putting pressure on profit margins. All companies were having to look at alternative supply chains out of Asia because of the problems with container shipping such as the trans-Siberian railway. But this of course is now impacted by sanctions because of the war in Ukraine, so it is very challenging for German companies,” he pointed out. Dirk Förster said life has been particularly challenging for the risk and insurance management community during the last three years, because of the unexpected nature and size of risks that have come to the fore. “You would have to say that none of these risks are fundamentally new but they were not expected. This time last year, who would have expected a war in Europe and the following sanctions? This makes the supply chain environment difficult. Sanctions affect us but this is not question of whether you have to comply or not. You have to comply,” said Förster. It is well documented that Germany is particularly reliant upon Russian energy and gas. This presents German companies with major cost and business continuity challenges. The GVNW committee members said that, on the whole, larger German corporates are prepared for the energy supply shock but are naturally concerned about the durability of smaller, essential suppliers down the chain. “We are thankfully not so heavily reliant upon gas supplies and we are prepared for what may come down the line. We will all be affected of course but we have a taskforce that was created specifically to ensure that we have an early reaction. We try to anticipate such challenges as early as possible, as most larger companies do,” said Swen Grewenig. “My company is also preparing. But it is not just about the impact of lack of gas on companies such as ours but also our suppliers, because we source our raw materials from these companies and they may not be so well prepared. It is all linked together,” added fellow GVNW committee member Christian Böhm. *Commercial Risk’s annual European Risk Frontiers survey, sponsored again this year by HDI Global, will be published in full at the Ferma Forum in Copenhagen on 9-11 October. The survey is carried out through group discussions with leading risk and insurance managers who are members of Europe’s national risk and insurance management associations. Commercial Risk readers are also completing an online questionnaire. To take part in the online survey, please visit: https://www.surveymonkey.co.uk/r/RF-22

Systemic risks and supply chain top agenda for GVNW members

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