Saturday Sep 21, 2024
Saturday Sep 21, 2024
Monday, 22 September 2014 00:00 - - {{hitsCtrl.values.hits}}
The Costa Concordia loss in 2012 drove grounding to the top of the causes of loss list by value in the analysed claims, says AGCS in its Global Claims Review 2014. The Costa Concordia, a multi-storey liner carrying over 4,000 passengers and crew, ran aground and capsized off Italy’s west coast. The total insurance industry loss alone from the wreck and salvage of the cruise ship ‘looks set to get very close’ to $ 2 billion, according to a report by Artemis which provides an information service devoted to the alternative risk transfer, catastrophe bond and insurance linked security markets.
However, this cause of loss is relatively infrequent (8%) in the surveyed sample being a potential contributing factor in over 60% of claims over EUR 1 million, says the Review.
For the report, AGCS identified the top causes of loss and emerging trends from over 11,000 major business claims in 148 countries, each of above EUR 100,000 ($ 136,455), with which it has been involved between 2009 and 2013.
In 2013, using industry-wide data, the 20 largest losses reported across the insurance industry totalled approximately EUR 5.9 billion, excluding those caused by natural catastrophes. Incidents from the oil and gas industry dominate these 2013 major losses, at 40% of the total, while fire and/or explosion was responsible for eight of the top 20 losses or, at approximately EUR 2.9 billion, nearly half of the total loss bill.
So far in 2014, 80% of the major reported losses come from aviation incidents or from fires, particularly in the energy sector with the largest loss – a fire at a Siberian refinery complex in June – reported to be around EUR 586 million.
Allianz’s 2009-13 analysis also confirms the high losses seen in the oil and gas sector, which is responsible for the largest insured losses on average at EUR 20.8 million, over 10 times the average loss of EUR 1.9 million reported in this analysis. Fire is the number one cause of energy losses in the surveyed claims, both by number and value (45%/65%) followed by blow-out (18%/19%). Machinery breakdown, explosion, natural hazards (storm) and contingent business interruption (CBI) are the other main causes of loss identified in the AGCS data.
In emerging risks, the review said that technology, economic growth, climate change, societal change and the fast developing legal and regulatory framework are all affecting risk and making insurance claims more challenging, not least with a shift away from tangible risks like fire damage towards intangible risks like reputational risk and supply chain interruption. For property casualty insurance and claims, rising natural catastrophe exposures and climate change, the increasing complexity and interconnectivity of risks, especially for business interruption, and the growing importance of cyber threats will be among the most relevant emerging risk trends to watch.
