India Blackouts Raise Questions About Outsourcing Risk

The great India power blackouts of the summer of 2012 left about twice the population of the United States without electricity. For Insurance carriers who depend on Indian outsourcers, these events raise questions about what constitutes due diligence in evaluating the risks and how to appropriately craft service-level agreements for potential exposures.

The only way for insurers to adequately prepare for events such as the India blackouts is to a full-scale risk assessment of suppliers to the second and third tier.

“They need to employ a supply chain risk assessment methodology that is flow-chart oriented, and which identifies exposure points and bottlenecks,” explains Zurich’s Larry Collins. “The same methodology applies whether you are an underwriter considering insuring a supplier or an insurance CIO doing business with the supplier.”

See India Blackouts Raise Questions About Outsourcing Risk, by Anthony O’Donnell for Insurance & Technology.


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