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David Shillingford, President of Verisk Crime Analytics, speaks with WRIN.tv to review the nature of today’s supply chain risk, and where he sees developments in risk assessment.

While supply chain risk is a very broad topic, Mr. Shillingford says the major supply chain risks are political risk, environmental risk, water risk, and disruptions to the ports by either strike or natural disaster.

Mr. Shillingford points out that supply chain risk is unique from a risk management standpoint. A manufacturer or retailer has visibility around risks affecting their own assets. but only limited ability to see the risks around their suppliers. It is an even greater challenge to see risks for their suppliers’ suppliers

According to Mr. Shillingford, there has been progress in supply chain risk management. Insurance companies are starting to adapt models in order to assess supply chain risk.

The biggest transformation around supply chain risk management is merging of catastrophe models used by the insurance industry with data and network models used by supply chain operators. As those two come together, Mr. Shillingford believes “probabilistic modeling of supply chain will be possible… this will be transformational for supply chain management as a whole.”

For more World Risk and Insurance News from the 2015 RIMS Conference in New Orleans, visit the dedicated RIMS 2015 Channel in the WRIN.tv On Demand Library.

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