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What Can We Expect as Manufacturers Respond to COVID-19?

COVID-19 has the world’s most powerful nations in its grip, and as an increasing number of countries start to fight back, the economic impact of this novel virus is starting to compound. But what can we expect to see from the manufacturing sector as the battle rages on, and how might these responses affect risk in the future?

Panic buying drives demand and transforms business models

The increase in demand for non-perishable food products has now risen above typical Christmas levels, causing a significant knock-on effect on supply chains. Many manufacturers are now working at full capacity, having hired additional staff to help in the production of record numbers of products. For some companies, business models have been hugely affected. In their efforts to get products to consumers quickly, many have found themselves dramatically altering the way they work.

Recent changes in production methods could even bring new exposures for some companies, in terms of the increased risk of unsafe products, or products which might not meet strict quality guidelines.

Coronavirus spending patterns impact contract manufacturers

New trends in buying patterns have led to a shift in the prioritization of the products many retailers distribute. Amazon recently began prioritizing essential household items in its warehouses, meaning longer waits for those ordering non-essential items. Demand for luxury products has fallen as a result of the coronavirus, and many brands are limiting production as a result. However, as the world begins to acclimatize to its new normal, we could well see an increase in the uptake of luxury products, strengthened by this limited availability.

Lockdown and the domino effect

Many nations are in lockdown, and huge restrictions have been placed on businesses all over the world. The domino effect of these lockdown measures is set to become one of the biggest challenges of the coronavirus. A single lockdown can have a huge impact on an entire supply chain, inevitably threatening business continuity and perhaps even leading to insolvency for some.

Staff illness and isolation measures

With growing numbers of the workforce being diagnosed, it’s only a matter of time until key quality assurance staff are taken away from the front lines of operations in order to self-isolate. In terms of risk, this could spell trouble for manufacturing businesses.

Joseph Bermudez, a lawyer specializing in crisis management at Stewart Smith Law explains, “colleagues will substitute in and may inadvertently cause contamination, mislabeling, or manufacturing defect issue”.

Social distancing may slow distribution

Safe social distancing measures are making deliveries more difficult. Drivers and workers accepting goods are reluctant to get too close to one another, and as this continues it could cause additional time lags in the restocking of supplies. There might come a time where individual staff members at stores are permitted to accept deliveries only when wearing the correct personal protective equipment. Distributors too might start to put the pressure on stores to provide such equipment.

The effects of import and delivery restrictions

Significant restrictions have already been placed on the movement of individuals. We start to see these restrictions extended to foreign trade, making it more difficult, and more expensive, to import or export goods. Should countries face food shortages, we can expect manufacturers and distributors to focus their efforts on their own domestic markets. Any increases in expense or logistical challenges associated with supplying other nations could well add to their reluctance to supply other markets.

If shortages do begin to affect food availability, we might also see price increases, and a reduction in the variety of products available, as manufacturers turn their attention to maximising output as quickly as possible.

What does the future hold for manufacturers?

Sadly, none of us can say with any certainty what’s in store for businesses in the near, and more distant, future. The world’s response to COVID-19 has been dramatic, with many countries introducing increasingly draconian measures to prevent the spread of this deadly virus. But as more and more restrictions are introduced, the timeframe in which we might see a return to normality grows longer.

In the short term, business risk hasn’t changed. Yet the long-term effects of the coronavirus pandemic on businesses are likely to be far-reaching. And the impact on all of us, as individuals, may well be just as significant.

Source: www.cfcunderwriting.com


A Message on COVID-19

We want to take a moment and extend our well wishes to you and your families. As the growing concern around the spread of corona virus (COVID-19) is on all of our minds and everyday business functions are being challenged, ABEX is committed to working with our brokers to provide the best service we can under the circumstances.

The well-being and safety of our employees and our communities are our top priorities, so all of our employees currently work from home. As the situation unfolds, we will be monitoring recommendations from national health authorities and making adjustments as necessary.

Business as usual

  • We’ve invested in our infrastructure so that all of our staff are equipped to connect remotely into our secure network and continue to provide seamless service to our clients.
  • Our staff continue to be available via email and phone as most of our underwriters’ extensions are routed to their cell phones.
  • General voicemail is being monitored and emailed to respective recipients.

Possible delays

  • We will endeavor to remain operating to service our obligations, but our service may be delayed due to circumstances outside of our power.
  • A number of our UK partners are in the same situation so this may cause additional delays.

Broker payments

  • We continue to receive mail and ICS courier so please continue sending in your payments.  Please do not use other courier services beside ICS as we cannot receive those at this time.
  • We encourage our brokers to use / sign up for ClearPay which is the safest and most productive way of making a payment.
  • We accept EFTs and e-transfers, but please note that e-transfers are not as safe as the above methods as they can get intercepted. Please contact accountsreceivable@abexinsurance.com for our EFT information.

Open market placements

  • If you are having difficulty collecting payments for open market placements please reach out to the underwriter on file or if unsure, contact us at service@abexinsurance.com and we will work with our syndicates to extend premium payment conditions.
  • For open market policies needing extensions, please ensure you give us enough notice, so that we can communicate to syndicates.

Renewals

  • Please ensure you give us enough notice on any changes so that we can communicate to syndicates accordingly.

How to Contact Us

Please go to our Contact Us page for more information on how you can reach us.

Thank you for your patience and understanding and please do not hesitate to contact us with any questions.  Stay safe and we wish you the best as we navigate through these challenging circumstances.


We’re Using ClearPay!

We’re taking a step forward to make it even easier to do business with ABEX with the roll out of ClearPay.

Did you know that every cheque and associated report you send to ABEX actually costs you about $18 to issue and mail to us? On the other hand, ClearPay is integrated into the majority of broker management systems and is an easy digital solution for less than $2 per payment!

Anytime you need to send funds and underlying policy information to us, ClearPay makes electronic payments easy and far cheaper than cheques.

The software is broker-friendly; you follow your existing workflows in generating disbursements and ClearPay automates the gathering of approvals, report and funds delivery. Once and done from your BMS! At a cost of less than $2 per payment, you’ll be saving approximately $15 per transaction that you spend today with cheques and manual reporting. Saved time can be used to devote to more productive customer services. And, most importantly, it’s a digital solution that presents a modern alternative to cheques and helps ensure accurate application to our customers’ policies.

The table below outlines some of the benefits of using ClearPay over cheques and EFTs:

This is just another step towards making it easier to do business with ABEX!

This platform presents mutual benefits and you can learn more by:


ABEX Office Relocation

We are moving! ABEX office will be closing at 12:00 p.m. EST on Friday, March 29 for relocation.  We will not have access to our phones or systems during the move.

We will resume our regular business hours of 8:30 a.m. – 5:00 p.m. EST, on Monday, April 1.

Effective April 1, our new address will be:

139 Northfield Dr. W., Suite 206
Waterloo, ON N2L 5A6

Our telephone, fax number, email addresses and all other contact details remain unchanged.

If you need to submit a claim during our move or after hours, please contact

Crawford Adjusters. They can be reached by phone: 1-877-313-2585  or email: newabexclaims@crawco.ca

We thank you for your patience while we’re making the transition to our new space!


Signs of Progress on National Flood Program for Canada

Canada is making good progress on a national flood program, pending a final decision by federal, provincial and territorial (FPT) ministers responsible for emergency management.

“What they are looking at is one national insurance solution to improve outcomes for high-risk Canadians across the country,” Craig Stewart, vice president of federal affairs at Insurance Bureau of Canada (IBC) told Canadian Underwriter in an interview Tuesday. “There may be regional insurance pools adapted to local conditions, but it would be nationally coordinated.”

FPT ministers responsible for emergency management have mandated IBC to lead a national working group to take a look at options and what they would look like. IBC provided three options:

  • A pure market approach (like in Germany and Australia) where governments exit disaster assistance
  • A broadened version of the status quo, but with better-coordinated insurance and disaster assistance
  • Deployment of a high-risk pool analogous to Flood Re in the United Kingdom.

The next step is for the working group, which Stewart chairs, to cost out the pool. “The pool needs to be capitalized as it was in Flood Re,” Stewart said. “So, we need to figure out where that money is going to come from. Is it going to come from governments? Is it going to come from insurers? Where is it going to come from?”

A final decision will be made by ministers after the high-risk pool is costed, which Stewart expects to be completed by June. Decisions on eligibility, how to capitalize the pool, and on any cross-subsidization await the results of that costing analysis.

In addition, this spring, the ministers will hold a technical summit on flood data and science. “Our view of the risk many not align with the government’s view of the risk,” Stewart said. “We need to bridge the gap. This symposium is going to focus on essentially the data and science of flood modelling.”

In early 2020, there will be the launch of a consumer-facing flood risk portal. IBC has been working with the federal government to develop the authoritative flood portal, where consumers can discover their risks and what to do about them.

“Elevating consumer awareness of flood risk is key,” Stewart said. “Consumers aren’t going to be incented to protect themselves or to buy insurance unless they know their risk.”

In May 2018, FPT ministers responsible for emergency management tasked IBC to lead the development of options to improve financial outcomes of those Canadians at highest risk of flooding. IBC worked with a wide range of insurers, government experts, academics and non-governmental organizations to produce the three options, which were tabled with ministers last week.

The ministers released the first-ever Emergency Management Strategy for Canada: Toward a Resilient 2030 on Jan. 25. The document provides a road map to strengthen Canada’s ability to better prevent, prepare for, respond to, and recover from disasters.

“In less than two years, Canadian insurers have secured a mandate with every province and territory to finalize development of a national flood insurance solution, have successfully catalyzed a national approach to flood risk information, have secured over two billion dollars in funding for flood mitigation, and have succeeded in securing a funded commitment for a national flood risk portal,” Stewart said.

Source: Canadian Underwriter


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