Global warming may be increasing the rate of natural disasters while cyberattacks have almost everyone on edge, but it seems a more traditional risk is still proving to be the costliest for insurers and corporations around the world.
The resulting data showed that, despite increased tension around cyber and technology, fire and explosions remain the most significant source of loss, accounting for 24% of all corporate losses analysed during the period.
“Cyber risks and the impact of new technologies will have an increasing influence on the corporate loss landscape in years to come,” acknowledged the report. “However, it is fire and explosion incidents that cause the largest claims for insurers and the businesses they cover.”
Between 2013 and 2018, fire and explosion incidents caused in excess of €14 billion worth of losses and were responsible for more than half of the 20 largest non-natural catastrophe events analysed. The average claim was almost €1.5 million.
“In general, property insurance claims are higher with inflation and greater concentration in value as a result of globalisation and more integrated supply chains,” explained Raymond Hogendoorn, property and engineering claims specialist at AGCS.
“As manufacturers have become more efficient, the values per square metre have risen exponentially. Fire and flood claims are much more expensive per square metre than a decade ago.”
According to the report, the top 10 causes of loss were accountable for 87% of all claims worldwide. These causes were fire and explosion (24%), aviation collision and crash (14%), faulty workmanship or maintenance (8%), storm (7%), defective products (6%), damaged goods (5%), machinery breakdown (5%), water damage (3%), ship sinking or collision (2%), and professional indemnity (2%).
However, while fire and explosion could be blamed for the largest value of losses worldwide, this wasn’t the case for each country and Australia was among the nations to buck the trend.
In fact, a huge 32% of all corporate claims (by value) in Australia were due to aviation crashes or collisions. This was followed by defective products (9%), hailstorm (9%), professional indemnity (8%), and directors and officers (8%).
By number of claims, the top five ranking shifted somewhat, with damaged goods accounting for 16% of claims, followed by professional indemnity (15%), aviation crashes and collisions (11%), defective products (7%) and storms (6%).
