Global economy fueling more severe business interruption claimsReprints
Increasing interdependencies between companies is a key factor driving growing business interruption claims, according to a report issued Wednesday by Allianz S.E.’s Allianz Global Corporate & Specialty S.E. unit.
“Global Claims Review 2015: Business Interruption in Focus” analyzed 1,807 business interruption-related claims from 68 countries recorded in accident years 2010-2014. The survey found that both the severity and frequency of business interruption claims is on the rise.
According to the survey, the average large business interruption property insurance claim is now in excess of $2.4 million, 36% higher than the corresponding average property damage claim of just over $1.7 million.
The report said that the majority of business interruption claims originate from technical or human factors and not from natural catastrophes. Fire and explosion was the top cause, accounting for 59% of all business interruption claims globally.
“This growth in BI claims is fueled by increasing interdependencies between companies, the global supply chain and lean production processes,” said Chris Fischer Hirs, CEO of Allianz Global Corporate & Specialty, in a statement accompanying the report, “Whereas in the past a large fire or explosion may have only affected one or two companies, today losses increasingly impact a number of companies and can even threaten whole sectors globally.”