According to recent data, some of the top causes of claims losses include power outages.
A recent data analysis conducted by Allianz Global Corporate & Specialty has revealed that power failure were among the leading causes for interruption related loss claims on business insurance policies from 2010 through 2014, worldwide.
In fact, power outages took tenth place when it came to losses from business interruption during that time.
The Allianz Global Corporate & Specialty firm specializes in industrial and business risk coverage and its research involved an analysis of almost 2,000 cases of business insurance in which there were interruption-related claims from 2010 through 2014. These claims were made from 68 different countries within that span of time. The total value of the claims were greater than $5 billion and did not include 149 claims that involved the losses from “very large events”, such as 2012’s Superstorm and 2011’s earthquake in Japan.
The average size of the business insurance claims for interruption is currently about $2.4 million.
This figure is considerably greater than the corresponding average claim for business property damage, which was slightly more than $1.7 million.
The report released by Allianz based on its data analysis revealed the leading ten causes for business interruption losses. It showed that those ten causes made up more than 90 percent of the total global losses. Most of them were associated with events that were non-natural catastrophes.
In the report Allianz said that the recent increases in insurance losses due to business interruption was the result of the global supply chains that are now more complex and interconnected than ever before. It stated that “The effects of interconnectivity are of growing concern, and play an important role in many risks now appearing on the horizon.”
In the report, it was also pointed out that business insurance claims are affected by the fact that while energy supply and distribution had, at one time, been isolated and localized. However, today’s power infrastructure is far more integrated and can span entire continents, let alone countries. Therefore, a cyber attack or solar storm affecting the power grid could cause an entire country to fall into darkness for days or even weeks.