Fires account for almost a quarter of all claims and are responsible for more than half of the 20 largest non-natural catastrophe events analyzed for the AGCS study. (Photo: Shutterstock)

Businesses are facing increasingly complex risks created by both man-made and natural hazards. In their Global Claims Review 2018, Allianz Global Corporate & Specialty (AGCS) analyzed more than 470,000 insurance claims to identify the 10 leading causes of loss around the globe. Among those having the greatest impact are fire/explosions and faulty workmanship or maintenance. |

Liability claims increase

The study found that there is an increasing potential for larger liability claims going forward due to the complexity and international focus of them, as well as higher legal costs. Approximately one-third of corporate liability claims involve litigation, compared to less than 1% of property insurance claims. The U.S. in particular is seeing higher jury awards for personal injury cases, especially those involving product liability and malpractice claims. In August 2018, a groundskeeper who claimed that the chemical glyphosate used in Roundup weed-killer caused his cancer was awarded $289 million. The award was later reduced to $78 million, but Monsanto, a division of a German chemical group, is still appealing the award. In July 2018, a jury awarded $4.7 billion in damages to 22 women who alleged that talc products created by Johnson & Johnson contributed to their developing ovarian cancer. Larry Crotser, liability claims specialist at AGCS, said in the report, "Personal injury claims in the U.S. now settle at much higher values than they did just five years ago. It could be that we are now seeing the 'millennial effect' on juries, which could result in increasing awards. A number of younger people tend to be less business-friendly and more co-operative than previously – and can be potentially less questioning in this area." Latin America and Asia are seeing an increase in liability claims as tougher environmental and consumer protection regulations are passed. "We are seeing more claims from the Asia region and other emerging markets as awareness of consumers has increased, making it more likely they will claim," shared Peter Oenning, liability claims specialist at AGCS. "We are now seeing much larger claims in Latin America and Asia than we have in the past. Once, nine out of ten large claims globally would have come from the U.S., now it is more like seven in 10." Related: Beware of bad-faith liability |

Technology will shape the future

Technology will also impact the liability and claims landscape in the future. Oenning says AGCS "expects to see more liability claims from emerging technology. For example, autonomous vehicles would see a shift in liability and claims from drivers to manufacturers and software providers. Such claims are likely to be harder to investigate and establish cause, and could result in increased cost and workload per case for insurers." Cyber risk has not yet translated into major claims activity, however this could be due to the fact that cyberattacks are usually excluded under commercial general liability policies. "Cyber is the next big trend, but as yet we have not seen this in liability claims," explains Crotser. "Plaintiff lawyers in the U.S. are not bringing claims for cybersecurity incidents and data breaches." The 10 primary causes of loss identified by Allianz are highlighted in the slideshow above. A full copy of the report is also available.