Port of Vancouver Strike Will Test Post-Pandemic Supply Chain Insurance Coverage, Worsen Claims Inflation

DBRS Morningstar published a commentary discussing the strike action at the Port of Vancouver and the implications for property and casualty insurers.

Key highlights include the following:

-- The Coronavirus Disease (COVID-19) pandemic has highlighted gaps in commercial insurance coverage with regard to disruption of supply chains.

-- The strike at the Port of Vancouver will be a case study for supply chain insurance coverage, which has limited market penetration.

-- Insurers are likely to be more affected by the second order inflationary impacts of the strike on traditional auto and home claims.

“In the aftermath of the pandemic, businesses have become much more aware of the risks associated with supply chain disruptions as well as the benefits and limitations of insurance coverage,” said Patrick Douville, Vice President, Insurance. “While this event should remain relatively benign for insurers, it is an opportunity to showcase the value of supply chain insurance to businesses. As a product, supply chain insurance is a good example of how insurers can diversify their sources of profitability into risk lines that have limited correlation with the rest of their insurance portfolios.”