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According to AGCS’s Global Claims Review, financial lines and liability claims in the region are increasing in size and frequency as regulators have stepped up their activities by introducing tougher environmental and consumer protection regulation. Public awareness of rights to compensation is also growing, which contributes to the increase in claims.
“During Q1 2017, AGCS had some 800 pending liability claims in Asia, which has risen to 1,300 by Q2, 2018,” said Peter Oenning, liability claims specialist at AGCS. “We are also seeing much larger claims in Asia than previously. Once, nine out of 10 large claims globally AGCS would have seen would have come from the US. Now it’s more like seven in 10, reflecting greater activity in Asia. As companies have become more global and more Asian companies operate in the US, the chances of being involved in litigation have increased.”
The study, which examined over 470,000 global insurance claims from 2013 to 2018, showed that fires/explosions and aviation incidents have inflicted the largest financial losses on corporate clients.
Over the past five years fire and explosion incidents have caused in excess of €14 billion worth of losses and been responsible for the majority (11) of the 20 largest non-natural catastrophe events analysed. The average claim is around €1.5 million.
Fire is the top cause of losses in China, responsible for 65% of all claims by value in the market. Large industrial blazes, such as the 2015 Tianjin explosions, have severely affected multiple businesses.
“In general, property insurance claims are higher with inflation and greater concentration in value as a result of globalization and more integrated supply chains,” said 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.”
Costs associated with the impact of business interruption (BI) can significantly add to the final loss tally, according to the study. The average BI property insurance claim is worth €3.1 million, or 39% higher than the corresponding average direct property loss (€2.2 million).
While the global aviation industry recently experienced its safest year ever, claims activity didn’t seem to decline. Aviation collision/crash incidents – both ground and air – were the second largest cause of losses globally. It is the top cause of loss in Australia, accounting for almost a third of claims value. Increasing repair costs from composite materials and more sophisticated, higher-value engines on aircraft were some of the factors cited by AGCS for the rise in the value of claims
