Casualty Risk Trends: Manufacturing industry

The manufacturing sector is undergoing a significant period of transformation. Recent developments driven by climate change, supply chain disruptions and rising geopolitical tensions have resulted in the emergence of trends that could considerably impact the casualty insurance risk landscape for the manufacturing sector.  

 In this publication, we have identified several emerging trends and hot topics related to the sector:

• The conversation around decarbonization has rightfully expanded to include evaluation of emissions along the entire product value chain. The manufacturing industry is expected to adopt a holistic lifecycle-based approach for emission and waste performance measurement. To successfully move on from the traditional take-make-waste linear business models, authorities and industry players must formulate concise circular-economy strategies to tackle emissions embedded along all facets of product creation, use and disposal.

• As conversations around decarbonization strategies intensify, alternative fuels – especially hydrogen – are gaining unprecedented momentum according to the International Energy Agency (IEA). Since burning hydrogen does not emit any carbon dioxide, in contrast to fossil fuels, hydrogen applications are increasingly finding support in political spheres. There is a growing consensus that ‘green’ hydrogen produced using renewable energy will play a crucial role in the decarbonization of many industries.    

• As conversations around decarbonization strategies intensify, alternative fuels – especially hydrogen – are gaining unprecedented momentum according to the International Energy Agency (IEA). Since burning hydrogen does not emit any carbon dioxide, in contrast to fossil fuels, hydrogen applications are increasingly finding support in political spheres. There is a growing consensus that ‘green’ hydrogen produced using renewable energy will play a crucial role in the decarbonization of many industries.    

• Consolidation through Mergers & Acquisitions (M&A) is commonplace in most mature industries and allows companies to increase their market share through acquisitions in the same business segment, whilst benefiting from synergy effects within product development and marketing. Traditionally, established industry players have been the main drivers of market-defining M&A activity. More recently, private equity firms with significant capital reserves have ramped up investment in the manufacturing industry, partnering private capital with proven management teams.

With each of these trends, casualty risk implications have been highlighted along with measures that insurers can take to address each trend. Download the report to find out more.