The increasingly high values at risk in industrial insurance claims are highlighted in a new report from business insurer, Allianz Global Corporate & Specialty (AGCS).
In its Global Claims Review 2014, AGCS identifies the top causes of loss and emerging trends from over 11,000 major business claims in 148 countries, each of above US$136,455, with which it has been involved between 2009 and 2013.
The analysis shows that nearly 70% of financial losses arise from 10 causes of loss, with the largest single identified cause being ship groundings, reflecting the high values of modern shipping risks, followed by fires, aviation crashes, eartquake and storm.
Completing the top 10 causes of loss, in order, are bodily injury (including fatalities), flood, professional indemnity, product defects and machinery breakdown.
In 2013, using industry-wide data, the 20 largest losses reported across the insurance industry totalled approximately $8.1 billion, excluding those caused by natural catastrophes.
Incidents from the oil and gas industry dominate these 2013 major losses, at 40% of the total, while fire and/or explosion was responsible for eight of the top 20 losses or, at approximately $4 billion, nearly half of the total loss bill.
So far in 2014, 80% of the major reported losses come from aviation incidents or from fires, particularly in the energy sector with the largest loss – a fire at a Siberian refinery complex in June - reported to be around $800 million.
Allianz’s 2009-13 analysis also confirms the high losses seen in the oil and gas sector, which is responsible for the largest insured losses on average at $28.4 million, over 10 times the average loss of $2.6 million reported in this analysis.
The growing relevance of business interruption (BI) as a consequence of losses in property insurance, heightened by lean supply chains and globalised manufacturing, is shown with average losses from BI at $1.36 million, 32% higher than those from direct property damage $1,030,505.