Changing Insurance Conditions in British Manufacturing

By Cliff

Today, UK manufacturers trade globally, often producing components or niche products and frequently excelling in precision engineering.

However, the way the industry works is changing radically with the introduction of smart contracts, blockchain, 3D printing, big data, business intelligence, artificial intelligence and the Internet of Things.

Manufacturing industry pundits frequently predict smart factories with digital supply chains. How will this change impact on the way insurers might view manufacturers?

Increased ‘hands-off’ digitalisation and automation will change the likelihood of business interruption. This is of particular importance in just-in-time supply chains: for example, vehicle manufacturers which hold just a few production line hours’ worth of car seats in their warehouse.

System failures triggered by in-house events, or non-events, are reasonably familiar to manufacturing operations directors: however, the risk of a cyber-attack rises as a growing percentage of operations become potentially exposed to hackers.

The EEF’s 2018 report, ‘Cyber Security for Manufacturing’, states:In our survey of manufacturers, 48% said that they have at some time been subject to a cyber-security incident, half of whom suffered some financial loss or disruption to business as a result.”

Manufacturing came out as the third most targeted for cyberattack: 41% of companies believed they had insufficient access to information to assess their true risk, and 45% believed they had no access to the right tools to correct this.

Despite chasing modernisation on the production line, one of the most worrying aspects is that manufacturers’ admin and HR offices often run on out-of-date computer systems – making them an easy target for hackers.

Click here to read the EEF’s entire report.

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