Technological advancement has reshaped industries globally, and manufacturing is no exception. Integrating technology and AI can unlock immense potential for businesses to optimise operations, speed up production and enhance quality assurance outcomes.
But what does this mean for insurance?
Unleashing the power of technology and AI
AI in particular acts as a transformational tool for manufacturing businesses seeking to scale their sales and operational efficiency. Automation, predictive maintenance, and data-driven decision-making are just the tip of the iceberg. AI-powered systems can analyse complex data sets to predict market trends, optimise inventory, and enhance customer engagement. For example, digital twin technologies allow manufacturers to create virtual replicas of their operations, enabling more efficient testing and problem-solving without physical disruptions. Meaning that businesses can trial process or production changes to see how these will impact their output. This is key in insurance for example when operations grow, or machinery can be moved to split down insurance risk.
Scala’s impact on manufacturing
Scala, when it came out, represented a new era of automation. As manufacturers adopted Scala, they unlocked capabilities to streamline production lines, reduce error margins, and increase production consistency. However, Scala was merely the starting point on a long journey of technological possibilities. The continued evolution of Internet of Things (IoT) devices and robotics promises to expand Scala’s initial impact, driving further efficiencies and innovation in manufacturing processes.
Beyond property damage and business interruption (BI)
While traditional insurance coverage for property damage and business interruption remains essential, technology introduces new dimensions to consider in risk management strategies. Cybersecurity breaches and technology outages present significant challenges to automated systems. For example, a disruption in a cloud-based production platform could lead to financial losses far greater than physical damage. Risk managers must therefore account for digital vulnerabilities when designing comprehensive insurance coverage.
The insurance and manufacturing industries must adapt to the risks and opportunities created by technological integration. Insurers are increasingly recognising the importance of offering specialised coverage for technology-related risks, such as cyber liability and system failures. Moreover, technology enables insurers to enhance their underwriting processes with predictive analytics and tailored policies without intervention from underwriters, meaning faster, more accurate and cheaper premiums could be around the corner for more businesses. As businesses embrace digital transformation, insurers must innovate to provide relevant solutions, including for technology-oriented risks.
Technology undoubtedly holds the power to supercharge manufacturing operations, creating vast opportunities for growth and efficiency. However, its implications for risk management and insurance are complex. Businesses must adopt a forward-thinking approach to ensure they are prepared for the challenges that come with innovation.
As technology and insurance converge, the relationship between these fields will continue to evolve, shaping the way businesses protect and enhance their operations. It’s down to businesses to evaluate their online risk and with the help of cyber insurance policies which are proactive, businesses could protect themselves a lot better before further cyber risks appear.
By staying ahead of technological trends and partnering with forward-looking insurance brokers, manufacturers can not only harness the benefits of technology but also navigate its risks with confidence. In doing so, they can position themselves for sustainable success in an ever-changing landscape.
Howden specialises in tailoring insurance solutions to support your business as it embraces digital transformation.
With expertise in understanding technology-related exposures, they can help you:
- Safeguard against technology outages: From cyber liability to business interruption caused by system failures, their comprehensive coverage ensures your operations remain resilient.
- Enhance risk management strategies: Their specialists provide insights into addressing both traditional and evolving risks, helping you stay prepared in a rapidly changing environment.
- Leverage predictive analytics for better protection: Partner with Howden to craft insurance programmes that align with your business goals, enhanced by data-driven approaches.
By navigating the complexities of technology risks with Howden, you can focus on innovation and growth with confidence. Reach out to Howden today and discover how they can support your business with tailored insurance solutions in this digital era.
Click here to find out more about Howden.
Howden are exhibiting at Smart Manufacturing Week in June. Pop over to see them on stand D10, or step in and listen to their session on this topic at the event.
Author: Jack Durrant – Head of SME and Digital Trading
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