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Adapting risk frameworks to a more complex threat landscape

This article captures insights from the quarterly webinar series dedicated to emerging risks shaping the manufacturing and automotive industry.

06/02/2026 · 4 minute read

Organizations are increasingly operating in a heightened risk environment. Rather than managing episodic or isolated risks, they are now often contending with persistent and interconnected challenges that are shaped by forces well beyond the four walls of the enterprise. 

For manufacturing and automotive companies, the evolving risk landscape is influencing core decisions around strategy, capital allocation, and supply chain configuration, among others. In an era defined by uncertainty, rather than stability, manufacturing and automotive organizations are being challenged to rethink their risk frameworks, while making rapid decisions intended to protect the business from evolving and emerging threats.

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Manufacturing & Automotive Emerging Risks webinar series

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An interconnected risk environment

Geopolitical tensions have long influenced manufacturing strategies, particularly when supply chains are involved. Issues such as the ongoing conflict in the Middle East, uncertainty around critical global trade routes such as the Strait of Hormuz, and the upcoming renegotiation of the US-Mexico-Canada Agreement (USMCA) are contributing to an increased level of ambiguity. 

Beyond the impact of each event, these developments may be having a cumulative effect on manufacturing and automotive companies, increasing volatility and complicating long-term decision-making. This reflects a broader shift in the nature of risk. While historically many risks could be treated as discrete and manageable, today’s threats are more complex and deeply interconnected, with impacts often cascading across supply chains, trade relationships, customers, and financial performance. 

Trade, industrial, and economic policies, as well as national security considerations, are increasingly intertwined and influencing organizations’ core decisions. For example, supply chains remain highly exposed to external disruption; even events that do not halt production, can drive volatility in input costs, availability of key materials, and lead times. The USMCA renegotiation is introducing uncertainty around rules of origin, enforcement mechanisms, and compliance requirements.  

Further, these challenges are unfolding alongside rapid technological change. While technology advancements, such as automation, robotics, and AI improvements, provide significant opportunities, they also compress decision timelines and turn the ability to anticipate, absorb, and respond to disruption into an even more intense competitive differentiator than it was before.

Moving from awareness to action

The cumulative effect of interconnected risks is increasing volatility and complicating long-term decision-making. In a landscape defined by uncertainty, the organizations most likely to build and maintain resilience are the ones that take a more structured and disciplined approach to managing risks, which often requires building a practical framework underpinned by four key actions:

  • Identifying current and incoming risks. Gaining clarity is a critical first step. Organizations need to identify the risks that are most significant to their operations. For many automotive manufacturers, this will involve looking beyond immediate, visible risks and considering both upstream and downstream exposures across the supply chain. Tools like Sentrisk, Marsh’s supply chain analytics platform, provide visibility and risk scoring to help organizations focus on the highest-priority locations. It is also essential to understand where vulnerabilities sit and how they connect to one another.
  • Quantifying the impact of risks. Once risks are identified, they need to be quantified. This includes assessing their impact on the entire network and identifying where disruptions would be most damaging. Quantification helps to turn risk from an abstract concern into a decision-making input grounded in data that can be understood by different decision-makers.
  • Mitigating risks. A comprehensive risk-mitigation strategy involves rethinking supplier relationships, strengthening contractual clarity, exploring multi-sourcing strategies, and revising inventory and continuity planning. For some organizations, this may also require adopting new approaches to supplier engagement and response planning to reduce downtime and increase resilience.
  • Transferring risks effectively. Once organizations have identified and quantified the impact of risks, they can more effectively develop insurance programs for those risks that cannot be mitigated. Understanding what coverage is needed and what risks the company is able to retain on the balance sheet enables leaders to be more intentional with how available risk capital is utilized, helping to optimize insurance spend. Targeted and specialized insurance solutions can help protect against low-frequency disruptions that can have a significant impact on a company’s finances.

Balancing short-term pressures with long-term resilience

Considering the complexity of today’s risks and their potentially wide-ranging and financially damaging impacts, it is understandable that risk managers and senior leaders prioritize addressing and mitigating the challenges that are right in front of them. This means focusing on preserving cash and minimizing shocks during times of elevated uncertainty. 

However, resilience cannot be built solely through short-term measures. Over the longer horizon, companies should consider reassessing their supply chain footprints, strengthening procurement and compliance systems, and embedding resilience metrics into broader performance frameworks. 

The decisions of today could shape manufacturing and automotive companies’ ability to remain competitive for years to come. Building a resilient organization requires a shift in mindset that treats risk as a constant rather than an exception. For manufacturing and automotive organizations, success will increasingly depend on the ability to identify and understand the impact of today’s and tomorrow’s risks and take action to reduce the impact on the business.

To learn more about the main geopolitical threats currently impacting manufacturing and automotive companies, listen to the replay of our webinar, The new geopolitical landscape: Navigating economic risks in manufacturing and automotive.

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Lisa Caldwell

US Manufacturing and Automotive Industry Leader, Marsh Risk

  • United States

Falak Kothari

Falak Kothari

Manufacturing Industry Leader, Marsh Risk Canada

  • Canada

Christopher Coppock

Christopher Coppock

Head of Geopolitical and Economic Risk Analysis, Credit Specialties Marsh Risk

  • United Kingdom

Rupert Watson

Rupert Watson

Global Head of Economics and Dynamic Asset Allocation, Mercer

  • United Kingdom

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