Cyber risks and new technologies will have an increasing influence on the corporate loss landscape. However, fire and explosions cause the largest claims for insurers and the businesses they cover, according to new research from the insurer Allianz Global Corporate & Specialty (AGCS). The company says that most corporate insurance claims originate from technical or human factors despite natural catastrophes such as hurricanes, having caused devastating losses over the past two years.
In its latest Global Claims Review, AGCS reveals the top causes of claims in the corporate insurance segment based on an analysis of 470,000 claims from over 200 countries over the past five years (July 2013 to July 2018) with an approximate value of 58 billion euros ($66.5 billion).
The largest financial losses come from fires and explosions, aviation incidents, faulty workmanship or maintenance incidents and storms, which collectively account for over half of all claims by total value. Over 75 percent of financial losses globally arise from ten major causes of loss.
Philipp Cremer, Global Head of Claims, AGCS says: “The report highlights the increasingly high values at risk for businesses and their insurers alike. In today’s interconnected and globalised business environment, financial losses are increasing due to geographical concentration of values – often in risk-exposed areas – and from the knock-on effects of global supply chains and networks. Looking to the future, new technologies bring business benefits but also risks and claims. However, they also provide an opportunity to prevent and mitigate losses and improve the claims settlement process for our customers.”
Aviation recently experienced its safest year ever but claims activity shows no sign of abating, the insurer adds. Aviation collisions and crashes – on the ground and in the air – are the second major cause of losses. Increasing repair costs from composite materials and more sophisticated higher value engines on aircrafts are also a factor. Around a third of large corporate liability claims involve litigation with third parties, compared with property insurance where less than 1 percent of claims do on average. The United States, in particular, has seen a trend towards higher settlements and awards in personal injury cases with some facing high punitive damages.
