~Why insurance needs to evolve with the sector~
Steve Fletcher, Joint Head of Corporate at Gallagher’s UK Retail Birmingham Office, shares how the manufacturing industry is adapting to a more complex risk environment—and why insurance has a bigger role to play than ever before.
Q: How would you describe the current state of the manufacturing sector?
It’s a sector that’s shown incredible resilience, but the challenges manufacturers face today are very different from those five or even two years ago. Rising material costs, persistent supply chain disruption, energy volatility, talent shortages—the pressure points are stacking up. And they’re not short-term. These are structural shifts that are forcing manufacturers to rethink how they operate.
Q: And how does that link to insurance?
Insurance has traditionally been seen as something you buy once a year and forget about. But that’s no longer viable. The pace of change—whether that’s inflation impacting asset values or cyber threats becoming more sophisticated—means your insurance programme needs to keep up. Otherwise, you’re at serious risk of being underinsured or exposed in critical areas like business interruption or liability.
Q: Has the perception of risk changed among manufacturers?
Absolutely. There’s much greater awareness now that risk doesn’t just mean machinery breakdown or fire. It could be a ransomware attack that shuts down operations, or a key supplier going under. The COVID pandemic was a wake-up call, and recent global events have only reinforced that vulnerabilities exist across the whole value chain—not just within your own four walls.
Q: What do you advise manufacturers to do differently?
The first step is to treat insurance as part of your wider business strategy. That means regularly reviewing sums insured, stress-testing your supply chain, and asking what your cover would actually do in a worst-case scenario. At Gallagher, we work with manufacturers to dig into those questions and give them a clearer view of where they stand. It’s about making insurance proactive—not reactive.
Q: Are there areas you feel are commonly overlooked?
Cyber cover is a big one. Many manufacturers still don’t see themselves as targets, but operational technology is becoming a growing area of concern for attackers. Also, business interruption policies can be tricky—especially if they’re based on outdated turnover figures or overlook key dependencies. Getting that right can be the difference between surviving a major event or not.
Q: Final thoughts for manufacturing leaders reading this?
Risk is evolving, and manufacturers need partners who understand that. The right insurance solution doesn’t just protect what you’ve built—it gives you the confidence to keep building. In a climate where uncertainty is the only constant, that kind of support is invaluable.
How Gallagher can help
If you would like to speak to Steve about any of the issues raised, please contact: www.ajg.com/uk/manufacturing-risks/
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