Allianz Global Corporate & Specialty’s Global Claims Review 2022 says that fires and explosions (excluding wildfires) are the single largest identified cause of corporate insurance losses, accounting for 21% of the value of all claims.
According to the firm, the past five years such incidents have caused in excess of €18bn worth of insurance losses from over 12,000 claims and are responsible for 13 of the 20 largest non-natural catastrophe loss events analysed. It said that the average claim loss from such incidents stands at €1.5m.
It wrote: “Natural catastrophes (15%) ranks as the second top cause of losses globally by value of claims. Losses continue to rise with climate change and changes to exposures (such as increasing economic activity in natural catastrophe zones).”
It added: “Analysis of more than 20,000 claims around the world, with an approximate value of €13.7bn, shows that hurricanes/tornados are the most expensive cause of natural catastrophe loss, accounting for 29% of the value of all claims, driven by the fact that two Atlantic hurricane seasons out of the previous five (2017 and 2021) now rank among the top three most active and costliest seasons on record. Collectively, the top five causes of loss – hurricanes/tornados (29%); storm (19%); flood (14%); frost/ice/snow (9%) and earthquake/ tsunami (6%) account for 77% of the value of all nat cat claims.”
The firm said that insurers are seeing newer and more-unusual loss scenarios, drawing attention to the freezing in Texas last year, alongside the flooding in Germany. The former, it said, caused huge disruption to infrastructure and manufacturing. The event, it said, is estimated to have caused economic losses up to $150bn, while Winter Storm Uri caused $15bn in insured losses nationwide.
Around inflation, Thomas Sepp, chief claims officer at the firm, said that the Russian invasion of Ukraine was an exacerbating factor in the current high inflationary rate.
He added: “The war in Ukraine caused further price shocks for a wide range of commodities, energy, and food. As a corporate insurer, we find several specific inflationary trends particularly alarming, and we are closely monitoring how price indices for energy, raw materials, and construction costs are developing because these have an immediate impact on businesses and on potential claims.”