What if you could identify the top 10 causes of two-thirds of the financial losses in business? One insurer has compiled just such a list.
Business insurer
Allianz Global Corporate & Specialty (
AGCS) recently released a report showing 70 per cent of financial losses arise from 10 causes of loss, with the largest single identified cause being ship groundings, followed by fires and aviation crashes.
In
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 above $143,000, with which it has been involved between 2009 and 2013.
As of 2013, the 20 largest losses reported totaled roughly $8.42 billion, notably excluding losses caused by natural disasters. Additionally, 40 per cent of total losses in 2013 were a result of oil and gas incidents, while fire and/or explosion responsible for eight of the top 20 losses.
It appears as if this trend is set to continue as 80 per cent of the major reported losses in 2014 have come from aviation incidents or fires.
Business interruption is also growing in relevance due to losses in property insurance, heightened by lean supply chains and globalized manufacturing based on increasingly specified production points. Average losses from BI are estimated at $1.42 million, 32 per cent higher than those from direct property damage at $1.08 million.
“AGCS’s diversified global business gives us unique insights into the sharp end of industrial insurance in terms of current claims experience and future trends - such as the growing importance of business interruption losses,” explained Alexander Mack, AGCS’s Chief Claims Officer. “By sharing this analysis, we hope to demonstrate the key role that effective claims service plays in getting businesses back on track when disaster strikes.” (continued.)
#pb#
In terms of emerging risks, the report specified technology, economic growth, climate change, societal change and the fast developing legal and regulatory frameworks are all making insurance claims more challenging. Often in the modern era we are seeing a shift away from tangible toward intangible risks such as reputation or supply chain interruption.
Top Causes of Loss by total value:
1. Grounding
2. Fire
3. Aviation crash
4. Earthquake
5. Storm
6. Bodily injury
7. Flood
8. Professional indemnity
9. Product defects
10. Machinery breakdown
