Prevalent risks in the Food & Agri sector

04 July 2017

JLT Specialty has published the first edition of their food & agri newsletter, News Feed.

Within the newsletter, you will also find information about JLT Specialty's first international food & agri conference that will be held from 8 to 10 November 2017 in Madrid. The opening evening will start with a welcome drinks reception followed by dinner. The conference's programme is packed with keynote speeches and presentations from leading luminaries from across the industry and will provide the perfect platform to develop personal relationships within the market. 

The current issue of News Feed contains the following articles:       

The evolving world of business interruption insurance: Research by Munich Re has found that only 30% of worldwide property damage and business interruption (BI) losses are insured. Although business interruption is a long-standing and critical cover which offers essential protection to businesses irrespective of their size, organisational structure or industry specialism, it is complex and diverse in nature. This article details the complexities of BI insurance and the solutions recommended by JLT Specialty.

Supply chain risk: Managing their supply chain and understanding how they can mitigate or avoid losses due to supply chain disruption is one of the challenges for firms in the food & agri sector. This article lists five potential supply chain risks – non-damage business interruption, food security fraud, political risks, stock contamination and extreme weather – and some of the factors that should be considered by companies to manage them. 

Market update: This short article provides an update on the food & agri insurance market and details some of the potential solutions for dealing with existing challenges in the market.

Looking ahead: Costs for food & agri companies are under pressure on a number of fronts: the depreciation of Sterling following the Brexit referendum, the prospect of higher energy prices and rising labour costs. Although food inflation is expected to return in 2017, increased costs will be difficult to pass on to consumers in today’s competitive and politically charged market. As a result, food retailers and manufacturers are increasingly likely to seek efficiency savings, sparking consolidation and the restructuring of supply chains. This article talks about the future of the food & agri sector, in light of Brexit and other major challenges facing the sector.

Fishing for answers in the aquaculture insurance market: Although global aquaculture insurance premiums are around USD 150 million, the commentators in the market believe that they could go up to USD 3 billion due to the size of the industry and the value of its produce. This article talks about the systemic risks present in the aquaculture insurance market and their solutions; if implemented successfully, these solutions would benefit aquaculture producers, insurers and brokers.

You have to react quickly in a recall event: Following the poultry scandal in Brazil where a federal investigation uncovered 21 packaging units selling sub-standard and rotten meat, China, Chile and Egypt placed immediate ban on all meat imports from Brazil. Besides the offenders, the scandal affected thousands of other meat packers and producers. There was not only a 22% drop in the weekly average export of pork and poultry which resulted in disruption of supplies to thousands of customers worldwide, but the publicity of the scandal also created suspicion around meat and poultry products from Brazil and other completely unrelated countries. This article talks about the risks and potential implications of product recall and the importance of a good crisis management plan to handle a product recall well. It also provides information about various insurances present in the market and how JLT Specialty is helping in the development of policies that would be ideal for businesses in the food & agri sector.

Risk management pays dividends for Premier Foods: This case study of Premier Foods details how effective risk management has helped the company identify and mitigate the key risks facing the business on an ongoing basis. It also contains information on how the company reduced its insurance costs by over 40%.

To read any specific article, please click on its title. You can also download the full newsletter by visiting the JLT Specialty website