Where the money went: The 10 biggest causes of claims
Aviation-related claims are the biggest driver of insured losses in Australia, according to an Allianz Global Corporate & Specialty (AGCS) annual report released yesterday.
They make up 32% of the €1.6 billion ($2.5 billion) of claims paid by the industry over a five-year period from July 2013 to this year.
Events under this category include damage caused by collisions or crashes, faulty maintenance, travel issues, ground-handling incidents, over and under-shooting runways, emergency or forced landings and damage caused by bird strike.
Defective products and hailstorms shared second spot on 9%, and professional indemnity and directors’ and officers’ (D&O) were joint third on 8%.
Damaged goods (16%) tops the list based on numerical share of the 3608 claims received during the five-year period. Professional indemnity placed second on 15% followed by aviation (11%), defective products (7%), storm (6%) and other (45%).
AGCS predicts D&O claims to trend upwards in Australia, which is regarded as one of the most litigious countries outside of the US.
Australia, the US and Germany have the most D&O claims in the world, AGCS says.
“Australia, for example, has experienced a sharp rise in D&O activity in recent years, caused by more litigation.
“Class action lawsuits and more litigation funders have made Australia one of the most litigious countries outside the US from a business perspective.
“It is now relatively easy to build and fund a class action in the country, where consumer-friendly laws have supported an increase in class actions and larger settlements.”
Globally, fire and explosion-linked claims dominate with a 24% share of the €58.1 billion of claims received during the five-year period to last July.
Following are the top 10 global causes of loss by value of claims:
1. Fire/explosion 24%
2. Aviation collision/crash 14%
3. Faulty workmanship/maintenance 8%
4. Storm 7%
5. Defective products 6%
6. Damaged goods 5%
7. Machinery breakdown 5%
8. Water damage 3%
9. Ship sinking/collision 2%
10. Professional indemnity 2%
Click here to read the full report.