An insurance company is pointing to a 31 per cent drop in business crime according to claims from its customers from mid-2013 to mid-2014. AXA also reports decreases recorded in most, 87 per cent of postcode areas.
While the insurer claims a convincing decrease across all types of business crime and across the majority of postcode areas, it does warn that gaps in insurance leave many businesses vulnerable to heavy losses, as the average cost of each crime claim is going up.
Almost one in 20 businesses experienced a crime serious enough to launch a claim (for comparison, that was one in ten businesses four years ago. )Theft – the most common business crime – became less costly with the average claim falling by 10 per cent. A 33 per cent rise in the overall cost of business crime was entirely connected to the higher cost of arson and vandalism claims; where the trend is towards fewer, but more serious incidents
The highest rate of crime claims was recorded in London’s WC postcode district, where businesses have a one in three chance of making a crime claim.
AXA points to a longer term trend: whereas in 2010 a business would have had a one in ten chance of making a crime claim, that is now just shy of one in 20. Theft – most commonly forcible entry – remains the most potent threat to businesses, accounting for 75 per cent of crime claims made to the insurer for the last four years running. These incidents are down 29 per cent on the previous year, however; and the average cost of a theft claim is down 10 per cent.
As for arson and vandalism, while fewer businesses are targeted (arson is down 40 per cent, vandalism – 23 per cent), when such crimes do strike, it results in more serious damage. Arson and vandalism damage claims are responsible for pushing up the average cost of business crime claims by 33 per cent (from £4,456 the previous year to £5,919 this year).
Darrell Sansom, Managing Director at AXA Business Insurance, says: “Our figures suggest that the average business is now at lower risk of getting a brick through the window, being burnt to the ground by hooligans or facing a break-in. That’s great news, but we need to remember what it means if you are the one in 20 that does suffer a crime. We seem to be seeing a trend towards costlier crime claims, and that spells heavier financial losses for the many businesses that operate without the insurance they need for their premises, business equipment, tools or vehicles*. Furthermore, it’s not just about patching up broken windows or replacing a computer – there’s the lost income too. For the many small businesses that have no or only minimal savings to tide them over, it’s important to check that their policies also include business interruption cover.*
Around regions
The West Midlands and Wales saw the most modest reduction in their crime figures – at just nine per cent compared to the 31 per cent national average. Birmingham was the only major city in the UK that didn’t enjoy a reduction in crime, seeing a slight rise on the previous year. The North East emerged as the region with the lowest rate of crime claims at half the national average. AXA also saw a fall of 43 per cent on the previous year in the region. As for the north, the region still has hotspots where business crime rates exceed the national average, most notably Manchester, Stockport, Warrington, Bolton, Bradford and Leeds. The most dramatic improvements were seen in Oldham (a 59 per cent drop) and Wigan (a 76 per cent drop – the highest in the country). And in the south, Truro and Hereford stood out as areas that bucked the trend with rising crime rates.
Darrell Sansom adds: “It’s easy to link these falling crime figures solely to economic recovery and better employment rates – and certainly we’d expect to see less motivation for opportunistic thefts and burglaries in this climate. However, it’s clear that the crime rates for business are falling faster than for the general population. The Office of National Statistic reports a 14 per cent drop in crime in roughly the same time period as we’ve seen a 31 per cent drop.”
