Supply Chain Losses Hit 86% of Companies, but Most Lack Adequate Coverage: Gallagher

Why It Matters

The protection gap leaves most firms financially exposed to escalating supply‑chain shocks, threatening profitability and operational continuity across critical industries. Closing this gap is essential for resilient global trade and investor confidence.

Key Takeaways

• 86% experienced supply chain losses last year
• Only about one third fully insured for losses
• Material costs, geopolitics, tariffs top disruption drivers
• Nine in ten firms stockpile, raising concentration risk
• Half use real-time monitoring; 43% assess geopolitical trends

Pulse Analysis

The latest Gallagher Redrawing Global Supply Chains report underscores how quickly supply‑chain risk awareness has outpaced actual preparedness. While 86% of surveyed firms reported losses, a mere 33% carried comprehensive coverage, exposing a stark protection gap. Drivers such as soaring material prices, persistent geopolitical tensions, and volatile tariff regimes have amplified exposure, especially for construction and energy players who cite cost inflation as their top concern. This environment has pushed companies toward aggressive stockpiling, a just‑in‑case tactic that concentrates assets in limited locations, heightening vulnerability to natural disasters and cargo theft.

Insurance markets are struggling to keep pace, with 36% of respondents deeming supply‑chain policies too limited due to high premiums, capacity constraints, and policy complexity. The resulting reactive posture—addressing disruptions only after they occur—undermines resilience. Simultaneously, the surge in inventory buffers introduces secondary risks, as illustrated by the Red Sea attacks that extended transit times and forced rerouting. Firms must therefore balance de‑risking one vector against creating exposure elsewhere, a nuance often overlooked in traditional risk‑transfer strategies.

To bridge the gap, leaders are turning to diversification and advanced analytics. Onshoring, nearshoring, and "friendshoring" are gaining traction to dilute geopolitical chokepoints, while half of companies now deploy real‑time monitoring platforms. Yet only 43% integrate broader market or geopolitical insights, signaling a need for predictive analytics and automated contingency planning. Enhancing supply‑chain transparency beyond tier‑one suppliers will improve risk visibility, enabling more proactive insurance solutions and strategic decision‑making in an increasingly volatile global trade landscape.