Allianz Risk Barometer 2023 -
Rank 9: Fire and explosion

Fire risks are often well understood and typically well risk managed. However, fire remains a significant cause of business interruption (BI) and supply chain disruption, especially where companies rely on third party suppliers for critical components. Claims analysis by Allianz shows that fire is the largest single cause of corporate insurance losses, accounting for 21% of the value of 500,000+ insurance industry claims over the past five years (equivalent to €18bn). Aging property and infrastructure, such as in the energy industry for example, is a worrying cause for fire and BI-related losses, as is a lack of trained personnel.

“Aging assets and processes are harder to maintain, and these can be contributory factors impacting fire and explosion losses,” says Marianna Grammatika, a Regional Head of Risk Consulting at AGCS. “A number of claims were caused by human errors in the first instance, but these errors also occurred because of production pressures and the hiring of third-party contractors to maintain works, who may not have had the same expertise and knowledge of the permanent workforce.”

Regularly assessing and updating prudent fire mitigation practices, including preventative measures, fire extinguishing methods and contingency planning, remain essential for all businesses to lower the risk of loss from an incident.