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Record levels of stockpiling around Brexit presents risk and underwriting issues

Underwriters and brokers are being advised to watch out for risks associated with stockpiling by commercial policyholders as Britain approaches (or perhaps doesn’t) its Brexit deadline day.

Fear and uncertainty over what might happen on 29th March has led to some businesses that rely on imported goods already initiating their Brexit contingency plans and bringing more stock and parts into the UK over recent months. Concern over the flow of goods, the potential for a significant fall in the pound and tariffs being imposed on products from the EU mean importers are seeking to weather a possible Brexit storm.

Of course, UK exporters may also be affected by Brexit related disruption, with goods intended for shipment to the EU piling up this side of the border as well.

According to critical information, analytics and solutions providers, IHS Markit, February saw manufacturers stockpiling raw materials leading to a record expansion in input inventories. Pre-production inventories rose to the greatest extent ever recorded, with almost 70% of businesses attributing the build-up of stocks to Brexit.

Associated risks

As David Reynolds, RiskSTOP’s Head of Risk Engineering and Surveys explained, stockpiling has a number of associated underwriting and risk issues.

“Of immediate concern would be the increased exposure and ensuring the sums insured are adequate,” he said. “Also, businesses may have to resort to additional premises or storage facilities, so underwriters will need to be made aware of these changes and how the risk is impacted. 

“From a fire risk perspective, lack of space may result in stock being located closer to electrical equipment or heaters. When it comes to theft, consideration needs to be given to the type of stock, because more theft attractive items on site means greater temptation for thieves. Lack of space due to stockpiling also presents safety issues, such as slips and trips or falling items of stock if stored inappropriately.”

David added that underwriters and brokers should also be aware of the potential for shutdowns. “It’s something that has been reported among some of the higher profile motor manufacturers around Brexit, and this may have a knock-on effect for satellite suppliers for example. Shutdowns could lead to the kind of risks normally associated with unoccupied properties, especially those around malicious fires or damage, security and still, at this time of year, burst pipes.”

RiskSTOP has a range of risk bulletins available to underwriters and brokers covering many of the issues highlighted in this article. For further information, please email



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