Insuring the Future: Managing Risks and Disruptions within the Insurance Value Chain - A multiple case study on the commercial insurance industry
Abstract: Globalization has resulted in the fragmentation of business activities and participation in cross-border networks, giving rise to Global Value Chains, thus increasing vulnerability to risks and disruptions. While there is existing research on risk management in tangible product production within GVCs, there is a scarcity of literature on risk management in service industries, particularly on the Insurance Value Chain. Due to the unprecedented nature of the Covid-19 pandemic, there is little research on the effects of such a disruption. As the insurance industry is essential for creating a stable economic environment, our thesis investigates how the insurance industry can manage risks and disruptions to their value chain. A multiple-case study is applied and consists of 14 interviews with specialists, middle and senior management from various global insurers and insurance brokers. Our findings align with the limited existing literature on service supply chain risk management, highlighting the need for a flexible and iterative approach to risk management, especially in the face of unexpected events. Additionally, our research suggests that insurance companies should foster a risk-aware organizational culture that permeates the daily responsibilities of all employees, while maintaining a people-oriented approach that nurtures employees’ well-being and development. Moreover, companies need to be creative and quick to adapt to disruptions, while maintaining effective communication both internally and externally. Furthermore, reflecting on past experiences and learning from them is crucial for revising and improving risk management processes. Consequently, insurance companies can effectively navigate unexpected risks and disruptions, minimizing adverse effects and ensuring continued stability.
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