Compensation claims are rising rapidly in Asia PacificDecember 14 2018 by InsuranceAsia News Staff
Following an extensive claims study, Allianz Global Corporate Specialty has found that Asia Pacific has accounted for 6% of the number but 17% of the total value of corporate commercial claims globally over the last five years at almost €10 billion (US$11.3 billion) out of €58 billion.
According to the AGCS Global Claims Review 2018, financial lines and liability claims in the region are increasing in size and frequency as regulators step up their activities, introduce tougher environmental and consumer protection regulation and with growing public awareness of rights to compensation.
“For D&O and professional indemnity insurance across the region, we see more intense regulatory enforcements in Asia markets that do not always follow US or European understanding of law,” said Stephan Kammertoens, financial lines claims specialist at AGCS. “Australia, in particular 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.”
The frequency of liability claims in Asia has been increasing dramatically.
“During Q1 2017, AGCS had some 800 pending liability claims in Asia, which had risen to 1,300 by Q2 2018,” said Peter Oenning, liability claims specialist at AGCS. “We are also seeing much larger claims in Asia than previously. Once nine out of 10 large claims globally AGCS would have seen would have come from the US. Now it’s more like seven in 10, reflecting greater activity in Asia. As companies have become more global and more Asian companies operate in the US, the chances of being involved in litigation have increased.”
Over the past five years fire and explosion incidents have caused in excess of €14 billion worth of losses and are responsible for more than half of the 20 largest non-natural catastrophe events analysed; the average claim is almost €1.5 million.
Fire is the top cause of loss in China, accounting for 65% of all claims in China by value, due to large industrial blazes, such as the 2015 Tianjin explosions which severely disrupted the port and container storage stations and impacted multiple businesses.
Raymond Hogendoorn, property and engineering claims specialist at AGCS, commented: “In general, property insurance claims are higher with inflation and greater concentration in value as a result of globalisation and more integrated supply chains.”
He added: “As manufacturers have become more efficient, the values per square meter have risen exponentially. Fire and flood claims are much more expensive per square meter than a decade ago.”
- January 16
The claims burden from two powerful typhoons in Japan have increased by US$320m for the reinsurer.
- January 11
Natural catastrophes in Asia accounted for 23% of the US$80bn global insurance bill.
- January 8
The unusually powerful tropical storm is unlikely to be a major insurance event.
- January 7
Jackson's decision has given an opportunity to deputy Andrew Rice at the global adjuster.