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Transforming the Supply Chain


Dramatic changes in the basic American business model, driven by competition, have intensified business interruption risk.


“There’s certainly been a tremendous change in the business model over the last 50 or 60 years that has brought the concept of not only business income but contingent BI right into the forefront.”


Stephen Clarke, ISO


The standard business model has changed dramatically over the last half century. Businesses once controlled the entire production process, from the raw material to the finished product, and kept large stores of inventory. The business model has evolved to just-in-time inventory, outsourcing and ever-greater degrees of specialization. Dependent property and business income coverages have been around for a long time, but only in recent years have underwriters and risk managers responded to the tremendous risk implications of a longer and more specialized supply chain.


Copyright © 2012 by A.M. Best Company, Inc. All rights reserved. No part of this report may be reproduced, stored in a retrieval system or transmitted in any form or by any means; electronic, mechanical, photocopying, recording or otherwise.


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