Global Claims Review 2022 | GATS

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In one of the most comprehensive analyzes in the industry, AGCS has identified the top causes of losses for companies over 530,000 insurance claims in over 200 countries and territories with which it has been involved between 2017 and 2021 (typically a number of insurers provide cover jointly given the huge values ​​at stake in the corporate sector). These claims have an approximate value of 88.7 billion euros, which means that the insurance companies concerned have paid out – on average – more than 48 million euros every day for five years to cover the losses.

The analysis shows that almost 75% of financial losses come from the top 10 causes of loss, while the top three causes account for almost half (45%) of the value. Despite improvements in risk management and fire prevention, Fire / Explosion (excluding forest fires) is the leading identified cause of business insurance losses, accounting for 21% of the value of all claims. The fires resulted in more than 18 billion euros in insurance claims over five years, according to the analysis. Even the average loss amounts to around 1.5 million euros.

Natural disasters (15%) is the second leading cause of loss in the world in terms of value of claims. Collectively, the top five causes (based on over 20,000 claims worldwide) – hurricanes/tornadoes (29%); storm (19%); flooding (14%); frost/ice/snow (9%) and earthquake/tsunami (6%) account for 77% of the value of all disaster claims. Hurricanes and tornadoes are the costliest cause of loss, due to the fact that two of the last five Atlantic hurricane seasons (2017 and 2021) now rank among the three most active and costly on record , as well as recent record tornado activity. . Insurers are also seeing new scenarios. In 2021, the “Texas Big Freeze” in the United States and the floods in Germany stood out as events that were both significant but with unexpected losses. For example, the “Texas Big Freeze” in February caused huge disruptions to infrastructure and manufacturing, forcing many businesses to shut down due to widespread power outages, resulting in property damage and outage losses. activities (CBI). It is estimated that this event alone caused economic losses of up to $150 billion.

Manufacturing/maintenance defect incidents are the third leading cause of overall loss (representing 9% by value) and are also the second most common loss driver (representing 7% by number, ranking only behind damaged goods with 11%). Costly incidents may include building/structure/subsidence collapse due to faulty workmanship, faulty manufacture of products/components, or incorrect design.

The other 10 main causes of loss are: aviation collision/accident (#4; 9%), machinery breakdown (#5; 5%), defective product (#6; 5%), shipping incidents (#7; 3%), damaged goods (#8; 3%), negligence/misguided (#9; 2%) and water damage (#10; 2%).

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