How insurers can mitigate procurement risks with resilience and visibility
Insurance companies specialize in safeguarding policyholders against losses from perils and hazards.
But how should their own procurement teams protect themselves from outside threats?
Data collected for Amazon Business’ State of Procurement report shows that procurement professionals expect to face a variety of risks in the coming years. As they chart their paths ahead, resilience and expense visibility should be guiding priorities.
“With access to hundreds of thousands of sellers, organizations can enhance supplier diversity by purchasing through Amazon Business. They can also gain greater visibility into spending, a crucial first step in understanding and mitigating risks.”
— Tiffany Jensen, Head of Financial Services, Amazon Business
Top procurement risks outlined
According to the Amazon Business report’s findings, costs and budgets are the highest reported risk on procurement specialists’ radars, with 29 percent of survey respondents pointing to them as a top risk. Next on that list is market and supply chain volatility (25%), followed by security and technology threats (22%), and politics and regulations (21%). Staffing issues ranked fifth (14%).
Beyond these reported risks, Jensen knows that procurement specialists working at insurance companies face a significant risk with heightened strategic importance: regulatory compliance.
“It adds complexity to procurement, vendor selection, and contract management in companies historically resistant to change and using legacy systems and technologies,” she said. “This can be mitigated by gaining visibility into your spend.”
Partnering with Amazon Business enables procurement specialists at insurance companies to analyze spending with data visualizations. This better informs budgeting decisions, making it easier to spot compliance issues and find opportunities to save in the future.
All of this becomes even more important as procurement teams further their digital transformations. According to Deloitte’s 2024 Global CPO GenAI survey, 92 percent of CPO respondents in a cross-industry selection are planning and assessing Generative AI capabilities in 2024. By 2025, 22 percent of surveyed CPOs are planning to invest $1 million or more in GenAI capabilities.
Integrating procurement systems with Amazon Business empowers insurance firms to achieve a balance between automation and visibility, ensuring effective checks and balances, Jensen said.
“This allows them to automate and streamline tedious procurement processes, enabling a focus on more strategic aspects like managing data governance as well as operational and strategic risks."
— Tiffany Jensen, Head of Financial Services, Amazon Business
Looking ahead: Prioritizing resilience
In addition to regulatory compliance and supplier diversification, Jensen believes that supply chain disruptions and technology-driven threats, such as cybersecurity issues, are among the key risks that insurance procurement organizations should monitor.
When asked about the most important thing procurement professionals should prioritize moving forward, Jensen pointed to resilience in the face of these multifaceted risks.
“To effectively navigate these challenges, partnering with a stable yet innovative organization is crucial,” she said. “With a vast supplier network, cutting-edge technology, and commitment to compliance, Amazon Business offers a robust solution for procurement teams to build resilience and manage risks in today's dynamic business landscape.”
Discover smart business buying solutions for insurance firms
