The ability of UK businesses to compete internationally is being seriously compromised by the country’s poor infrastructure, including road, rail and air transport, according to a new survey published today by QBE Business Insurance.
An index of European countries’ ability to manage risks to supply chains, places the UK 12th out of 15 countries for the quality of its infrastructure with only Italy, Greece and Ireland receiving poorer ratings, and lagging behind countries such as Spain and Portugal.
The survey indicates that the UK’s track record of decades of under investment in infrastructure has given a strong advantage to other less prosperous European countries. The UK scored poorly on the quality of its road network and overcrowded airports.
Richard Pryce, Chief Executive QBE European Operations, said:
“A significant challenge for many of our customers is that the UK’s infrastructure lags behind many European peers which is unacceptable for a country of our economic aspirations. If we are to be a nation that continues to build economic growth, it is essential that components and goods can be effectively and agilely moved around the country. Our survey highlights the country’s big disadvantages with our internal infrastructure.”
“QBE’s focus as a business insurer is to manage the risks of our customers enabling them to be successful but the country’s infrastructure shortcomings mean they risk starting from a position of competitive disadvantage. This is an issue that is too important to be continually ignored.”
The QBE Supply Chain Index is based on five pillars of influence, which can create risk to supply chains and economic activity – economic, environment, infrastructure, cyber and political. The UK scored particularly poorly on cyber and political risks.
Markedly, it is the quality of the UK’s infrastructure where the contrast with European competitors is so stark. The UK is markedly worse than, for instance Portugal where, according to a European Commission report, “the quality of the Portuguese road infrastructure is rated amongst the best in the European Union.”
Richard Pryce said:
“The UK has a great deal of lost ground to make up to create an environment that supports our customers’ need for a modern, competitive economy. The country urgently needs to improve its outdated motorway system and relieve pressure on the airports.”
“With Brexit fast approaching, it is more important than ever that the country is able to move components and goods in and out of the UK. The survey shows just how far behind the UK is with our northern European neighbours.”
“The survey highlights that the UK’s current infrastructure is putting the country at a considerable disadvantage to those nations against which we will be competing vigorously.”
“We are not at their level and therefore need to totally reappraise our attitude and approach to economic growth and competitiveness.”
In the survey the UK fared poorly in the political pillar because of risks associated with uncertainty due to Brexit, two general elections, two referendums in three years, and the impact of terrorist attacks which cause business interruption and affect business confidence. Another area where the UK performs poorly is vulnerability to cyber attacks in general and particularly attacks on networks.
Research for the QBE Supply Chain Risk Index, conducted by Opinium Research, found that the Netherlands was best at managing risks followed by Switzerland, Sweden and Luxembourg.
A report published today by QBE provides advice and guidance on how businesses can protect their supply chains in a world of global supply. The report says that while the risks to supply chains can be extensive, they can be controlled by:
• Taking time to understand risks
• Protecting the business contractually
• Ensuring businesses have a current risk assessment, a strategic crisis plan and a fit-for-purpose continuity plan
• Being properly insured.
Opinium Research developed the Supply Chain Index combining 20 indicators of threats to supply chains to demonstrate which country has the greatest and least exposure to supply chain threats. The overall index score was a weighted average of the pillars with the economic and infrastructure pillars each making the largest proportion of the score.
For further information contact:
Sandra Villanueva, Corporate Communications, QBE, 020 7105 5284
QBE European Operations is part of QBE Insurance Group, one of the world’s leading international insurers and reinsurers and Standard & Poor’s A+ rated. Listed on the Australian Securities Exchange, QBE’s gross written premium for the year ended 31 December 2016, was US$14.3 billion
As a business insurance specialist, QBE European Operations offers a range of insurance products from the standard suite of property, casualty and motor to the specialist financial lines, marine and energy. All are tailored to the individual needs of our small, medium and large client base.
We understand the crucial role that effective risk management plays in all organisations and work hard to understand our clients’ businesses so that we offer insurance solutions that meet their needs – from complex programmes to simpler e-trading solutions – and support them in minimising their risk exposures. Our expert risk management and rehabilitation practitioners focus on helping clients improve their risk management so that they may benefit from a reduction in claims frequency and costs.