Why the CFO lies awake: manufacturing risks under the radar

It's the middle of the night. The CFO is scrolling on his phone. The head won't turn off yet. What if a large debtor unexpectedly fails to pay? What if that international contract deviates from our terms of delivery? What if the insurance market changes and we are not properly sourced? Just when the business is growing, pressure is high and everyone is overflowing with agendas, these strategic uncertainties begin to quietly accumulate.

Insurance: the forgotten growth factor
The business is growing. New customers, new markets, different contracts. Decisions are being made at a rapid pace and often under pressure. Meanwhile, insurance policies are keeping pace – or rather, they aren’t.

Because as long as everything is running, nobody really cares. Until something happens: a liability claim, a major fire damage, a due diligence investigation or additional demands from investors. Then the question suddenly pops up:

• Does it still fit what we do and what we are growing towards?
• Are the coverages still up to date, or have risks been added that are not covered anywhere?
• Is that premium still market-based or are we now paying for the past?

International expansion and new requirements
In the manufacturing sector, standing still is not an option. Certainly not in regions such as Brainport, where high-tech, innovation, engineering and internationalisation go hand in hand. Companies are growing rapidly, expanding into new markets, investing in smart production technology and attracting capital from foreign investors.

The future smiles at you. Until the moment you discover that not everything is moving with you. For instance, when a new investor from the US makes higher demands on directors' liability and global coverage. Or when you discover during an audit that hired specialists are not formally part of your coverage, even though they are crucial in your business process.

International growth opens markets, but so do new legal frameworks: local insurance obligations, different liability standards, stricter product requirements. Cyber risks are increasing, especially as manufacturing and software become more intertwined. Voice cloning and social engineering are increasingly targeting finance functions, including the CFO.

Sustainability is becoming a condition for financing. But how is liability regulated if new technology causes unexpected damage? And what if a specialist supplier shuts down? That could easily affect your entire chain.

The role of the broker in the changing insurance market
Market conditions also influence the insurance market itself. In a ‘soft market’, capacity is plentiful and premiums are attractive, but as soon as the market tightens, cover becomes more expensive and scarcer. At the same time, we are seeing new insurers, specialist providers and new entrants shaking up the market and offering additional choices. However, this is only the case if you know where to look and how to gain access.

Reinsurance policy also plays a crucial role. When reinsurers become more cautious or pass on higher rates, it directly affects capacity and premium levels at primary insurers.

Strong buying power, access to international markets and excellent relationships with insurers then make all the difference. An experienced, well-connected broker can create value in both situations by negotiating smartly, hooking the right (new or specialist) players and buying strategically.

The fit scan: how do you avoid surprises?
Every stage in a company’s life cycle calls for a critical review of its insurance programme. Growth, internationalisation, acquisitions, sustainability and market forces: these are all developments that do not automatically find their way into the policy. Only a periodic, independent analysis provides the insight needed to continue building with confidence.

At Howden, we work daily with C-level management, directors and risk managers of fast-growing organisations. We combine local knowledge with international clout and access to specialised markets.

Would you like to know whether your insurance programme still aligns with your growth strategy?
Howden’s specialists are happy to help you with an independent analysis. This is not the conclusion, but the starting point for further risk dialogue. Together with experienced advisers, they’ll map out your current insurance structure and start the conversation about optimisation. Request the fit scan now. Would you like to find out more first? Then download the white paper‘The fit scan: risk and insurance check for the manufacturing industry’.