Fire leads as cause of corporate insurance payouts

Source: Xinhua | 2018-12-27

Fire and explosions are the sources of most commercial payouts by insurers and the Asia-Pacific region is seeing growing exposure to business claims, a new report from Allianz shows.

The global review by Allianz Global Corporate & Specialty looked at about 470,000 claims in over 200 countries over the past five years totaling about 58 billion euros (US$66.5 billion).

It found more than three quarters of financial losses globally arise from 10 major causes, with damage from fires and explosions, aviation incidents, faulty workmanship or maintenance, and storms accounting for more than half. Of these, fire and explosion incidents dominated, making up for 24 percent of the value of all claims.

And the costs associated with business interruption following a fire can significantly add to the final loss. Fires resulted in more than 14 billion euros in claims during the period.

The Americas, driven by the US, continues to be the largest corporate insurance market in terms of both umber of claims (57 percent) and value (35 percent).

But AGCS said claims activity in Africa and Asia are likely to increase and the Asia-Pacific region is seeing a strong rise and accounts for 17 percent of the total value of global claims and 6 percent of the number.

In China, fire is also the top contributor — 65 percent of all claims by value. Large industrial blazes like the Tianjin explosions in 2015, which severely disrupted the port and its container storage, hit many businesses, resulting in a large number of claims.

“In today’s interconnected and globalized business environment, financial losses are increasing due to the geographical concentration of values — often in risk-exposed areas — and from the knock-on effects of global supply chains and networks,” said Philipp Cremer, global head of claims at AGCS.