We've heard it all before. Global supply chain issues are impacting____. You can fill in the blank with just about any industry. Semiconductor chips quality control, retail and pharma inventory fulfillment, and even claims processing in property and auto insurance.
Imagine you're driving to work, and you get into an accident with another car. You're safe, other than the coffee stains all over your outfit, but your car has sustained a lot of damage. You think to yourself, “Ah! Good thing I'm insured." But not so fast – those pesky global supply chain issues mean a delay in getting the new parts needed to fix your car. The best solution for the insurer might be to consider your vehicle a total loss rather than fix the old one.
While this scenario seems improbable, insurers have been dealing with this issue for the past few years following the pandemic. Regardless of industry, disruptions seen in global supply chains are set to remain the same in 2023, according to research from KPMG. While most know about the impact of these issues - such as higher prices, inflation, and reduced quantities of available goods - few consider the intersection between insurance and supply chains.