Insurance solutions and risk management for the automotive industry
Is the automotive industry in crisis? What is certain is that it is undergoing a far-reaching transformation, which brings with it specific risks and challenges. Electrification, new propulsion technologies, software-based vehicle functions, fragile supply chains, and pressure to reduce costs and improve efficiency are changing the risk landscape. Risks today are more interconnected, dynamic and often occur simultaneously. Effective risk management and bespoke insurance solutions are essential in this context.
An insurance solution for suppliers to the automotive industry and other companies in the automotive sector must therefore not only be designed with an international perspective, but also identify a company’s risks and provide the best possible cover. It is crucial to take into account interactions throughout the entire value chain and to consider strategic, operational and insurable risks holistically. Funk combines expertise in the insurance market with extensive industry experience and global capabilities. In this way, our clients in the automotive industry receive a bespoke insurance solution that covers their entire supply chain. In short: we offer insurance solutions on a global scale.
A Look to the Future: Funk CEO’s Agenda 2030
New technologies, new competitors, new customer needs – our CEO Agenda sets out the strategies that will enable companies in the automotive industry to remain successful in the future.
Ensuring optimal production – with bespoke solutions for car manufacturers and original equipment manufacturers
The automotive industry is characterised not only by what are in some cases substantial investment volumes, but also by a high degree of innovation and technical development. These include, in particular, electrification, new propulsion technologies and software-based vehicle functions, which lead to shorter development and testing times. This results in an increased risk in the event of business interruption, vehicle recalls or product liability claims.
Another risk factor in insurance and claims management within the automotive industry are cross-border supply chains, with their high levels of interdependence amongst all parties involved. In transforming supply networks, outages or bottlenecks can directly impact production, start-up management and profitability. Causes of this include, among other things, short lead times, high investment barriers, cyber-attacks and raw material shortages. Funk recommends the optimal solution for you from across the entire spectrum of the insurance market, for example in relation to property insurance, engineering insurance, public liability insurance and business interruption insurance.
Managing global trade, supply chain and quality risks
At the same time, the automotive industry is facing growing protectionism, increasing trade conflicts and a changing regulatory framework. Tariffs, subsidy schemes linked to local production and trade defence measures are affecting the cost structures and global competitiveness of OEMs (Original Equipment Manufacturers) and suppliers to the automotive industry, and are making planning more difficult.
Global supply and value chains also present a key risk for the automotive industry: short lead times, supplier insolvencies, cyber risks, sanctions or bottlenecks can quickly impact production, start-up management and profitability.
At the same time, development cycles in the automotive sector are becoming ever shorter, software connectivity is increasing and warranty periods are growing longer – with noticeable implications for product liability and recall activities. Funk analyses these interconnected risks using business interruption and value stream analyses, draws on global benchmarking experience and supports clients in prevention, the design of suitable insurance programmes, and the defence against and settlement of claims.
Reliable advice on insurance products for the automotive industry
We put together a bespoke insurance package for each of our clients using the most suitable insurance modules available on the global market:
- Business, environmental, product and IT liability insurance, as well as motor vehicle recall cost insurance
- Property and business interruption insurance
- Transport insurance
- Technical insurance and warranties
- Cyber and fraud insurance
- D&O – Directors’ and Officers’ Liability
- Credit insurance and sureties
We also offer specialised solutions to protect investments in new technologies across the supply and value chains (e.g. raw materials and energy, construction, recycling).
We analyse each client’s specific insurance needs and design tailored cover solutions in line with their risk philosophy. In doing so, we recognise that risks in the automotive sector today are interconnected, dynamic and often occur simultaneously, and we combine risk analyses, preventive measures and insurance solutions into an integrated approach. On this basis, we recommend the best insurance solution as well as appropriate risk prevention measures for car manufacturers and companies in the automotive sector.
We also take into account the contractual framework, as defined by warranty agreements, quality assurance agreements, framework supply contracts, waivers of recourse, liability agreements, etc. Our clients benefit from our expertise and our position as Germany’s largest, owner-managed insurance broker.
Funk Automotive Working Group
Drawing on its experience from over 150 product liability and product recall cases per year, Funk provides professional support in drawing up recall and contingency plans. Since 2005, Funk has been organising regular conferences for companies in the automotive industry, attended by over 300 international Funk clients. In workshops and panel discussions with international partners, current industry topics are discussed and recommendations for action are exchanged with industry experts.
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