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Fires, explosions top corporate insurance losses: Allianz

Fires, explosions top corporate insurance losses: Allianz

Fires and explosions account for nearly a quarter of corporate insurance loss, according to a report from Allianz Global Corporate & Specialty SE on Thursday.

The top 10 causes of insurance loss lead to over 75% of total financial losses, the report said, led by fire and explosion at 24%, aviation collision/crash at 14% and faulty workmanship/maintenance at 8%, the report said.

In the past five years, fires and explosions have caused in excess of €14 billion ($15.92 billion) worth of insurance losses from over 9,500 claims and are responsible for 11 of the 20 largest nonnatural catastrophe loss events analyzed, the report said.

Damaged goods claims were most frequent, the report said, with claims involving damaged goods resulting from a number of different causes including storage, handling, loading and unloading issues – or when in transit.

Although they constitute the most frequent losses for insurers, accounting for 11% of all claims by number around the world, such claims account for only 5% in value, the report said.

Allianz also points out the overall lack of natural catastrophe on the list.

“Despite recent record-breaking activity in the U.S. and elsewhere around the world, storm is the only natural catastrophe event to appear in the top 10 causes of loss,” the report said.

One growing source of loss is business interruption, the report said. The average business interruption property insurance claim now totals some €3.1 million, 39% higher than the corresponding average direct property damage loss of €2.2 million, or a split of 58% to 42%, the report said.

“Almost all large property insurance claims now include a major (business interruption) element, which typically accounts for the majority of the loss when previously the split might have been nearer to 50:50,” AGCS said.

Energy claims are infrequent but costly, while “financial claims notifications continue to rise globally while claims are increasingly larger, more complex and international, reflecting increasing regulatory activity and litigation across many important jurisdictions.”

Property claims have seen an increase in the size of large losses, as globalization and the development of integrated supply chains lead to much higher concentrations of insured values, both in terms of assets and business interruption exposures, the report said, noting fire accounts for 51% of the value of all property insurance losses.

The findings are from information taken from more than 470,000 insurance industry claims in over 200 countries and territories with an approximate value of $66.5 billion, AGCS said in its report.








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