Why good equipment breakdown insurance is essential for manufacturers

Jen: [00:00:22] Hello everyone. Welcome to the latest edition of Insurance Business TV. I’m Jen Frost, news editor for the insurance business. Today, while Canadian companies are benefiting from increased production capacity, they are looking to cover equipment failures in the manufacturing sector. They are also working on some challenges. We’re joined by Ryan Jones, Vice President of Equipment Breakdown for Sovereign Insurance Associates, to discuss some of these challenges and your coverage needs. Ryan, thank you for joining us today.

Ryan: [00:00:57] hello. good morning. Thank you for calling me.

Jen: [00:00:59] I’m glad you came to the show, Ryan. Thank you very much. So what are the key risks facing these manufacturers today?

Ryan: [00:01:08] I think it’s important to have some foundation here. Canada’s manufacturing sector therefore contributes about 175 billion to GDP. About 1.7 million employees are needed to drive about 10% of Canada’s GDP. 93% of the manufacturing sector is made up of SMEs. Companies without a foundation for R&D and IAC implementations, artificial intelligence implementations, and other challenges they face to move forward in their business segments will see 25% of their workforce retire by 2030, Many companies will retire. Large manufacturers and many global manufacturers have already moved to more automated operations. So I think this presents some challenges for the manufacturing sector in Canada. It means we need to take the next step in digitization and do it in a way that makes it easier for Canadian businesses to do business.

Jen: [00:02:17] Wow. So it seems like some of these small businesses have a big challenge to move forward. What kind of coverage should they provide?

Ryan: [00:02:27] I think this is probably one of the hardest questions and one of the most important questions everyone should ask in this conversation. So, traditionally he has two types of boiler machine coverage. There are some additions to the policy. This is called a special contract. This is added to property policies to fill gaps not otherwise covered by property policies. There is also what is called a breakdown policy for model lines or stand-alone equipment. It sounds like it, but it has been completely removed from the property policy and has its own definition and scope for the manufacturing sector. And the most important part for them to focus on is what is subject to business disruption, acceleration, and additional costs. And here Sovereign’s business specifically talks about facilitating additional costs with his partners. These are because they allow manufacturers to speed up or reduce the amount of downtime, feel complete autonomy and resolve breakdowns. I have it at the time.

Jen: [00:03:34] We talked about business interruptions, Ryan. And, of course, we’ve been through all the turmoil that the pandemic has brought. With that in mind, how have customer expectations of insurers evolved in recent years?

Ryan: [00:03:47] Yes unfortunately coverage is very evolving due to COVID, the pandemic or the impact of COVID on the industry. But everyone’s knowledge of the press is evolving. Delays in delivery of spare parts and delays in generally available products. Many clients are beginning to realize that in the event of a loss, the costs associated with downtime are much higher than previously seen. has long been expected. So brokers and client representatives are looking at how much coverage they have and are they limited enough to address the shortages and constraints the pandemic has brought to the industry?

Jen: [00:04:36] And talk about loss control. How does this fit into the works?

Ryan: [00:04:41] In other words, risk engineering, risk control, loss control, all synonymous terms are employed by insurers to assist company owners (in this case, manufacturers) in managing exposures that can adversely affect overall risk. used in industry to describe a group of people who identify work. Sovereign uses risk engineering in the sense that it uses risk engineers to help them think about what they would do when a loss occurs, rather than just go out and see what the company is doing. takes a slightly different approach to to do today Losses do happen, and we want to help them understand what they look like when they happen. That’s why we are in business. And help say that this is the way to solve that problem. Where do you get the product from?

Jen: [00:05:47] And why is it so important, especially for manufacturers?

Ryan: [00:05:50] yes. And I think this goes back to your comment on the pandemic and back to COVID. So with longer delays, I think it’s more important than ever to look at predictive maintenance. This is where risk engineers really show their value. Historically, we’ve considered preventative maintenance and sometimes reactive maintenance, depending on our business philosophy. But components are becoming so hard to come by that if you see something about to happen, you should consider making a predictive decision that you can go ahead and buy that asset or component. There is also no lead time impacting the overall operation.

Jen: [00:06:30] It is very important to identify these problems and proactively try to find solutions before problems occur. Are there any other big trends that you’re looking at at the moment that have challenges? Ryan.

Ryan: [00:06:41] Very specific to Canada. I’m actually looking into an area that I’m very passionate about, the Industrial Internet of Things. It’s artificial intelligence. These are two areas where the manufacturing sector lags far behind other global sectors, with SMEs and SMEs needing significant support from the insurance sector and governments to better manage their overall impact. I think it’s an area that needs to be understood. directed to their future activities. So if anyone is looking into manufacturing, I think we are automated. The next step is a possible labor shortage in the manufacturing sector, which is vital to the economy as a whole. We need to consider how AI and IIOT can be leveraged and what it means for everyone in terms of their impact on overall business operations.

Jen: [00:07:39] So we’re looking at building some of these tech capabilities, and we want to ensure that these businesses also benefit from the new technology. Well, thanks for your insight, Ryan. It’s great to have you on the show.

Ryan: [00:07:52] Thank you for inviting me.

Jen: [00:07:54] And thank you to all the viewers. Don’t forget to check out our videos, podcasts and daily news at www.insurancebusinessmag.com/ca. I’m Jen Frost, news editor for the insurance business.