ABI reveals £59m rise in fire claims over last two years

The total value of commercial fire claims rose from £365m during the first half of 2007 to £424m in the first half of 2009, according to the ABI.

The more detailed statistics follow the release of headline figures last month, which showed a 20% jump in the number of fire-related claims in the first half of 2009, compared with the same period in 2008.

The ABI said a rise in the number of large-scale fires in buildings valued at more than £500,000 had pushed up the cost of fire claims.

Earlier this year, ABI research showed the total cost of fire damage increased by 16% in 2008 to reach £1.3bn, the equivalent of £3.4m for every day of the year.

Such trends have led the association to carry out a report, due to be published in early December.

“We carried out some research, trying to analyse what the truth was behind these figures and the reasons behind the rising cost in fire claims,” an ABI spokesman said.

“It is a live issue for us, which we are working on to see if we can ascertain the reasons behind the rise in large-scale fires in particular.”

He added that a number of factors could be behind the surge, including an increase in fraudulent commercial arson and inadequate construction methods.

This follows on from the findings in AXA’s business crime index this year, which showed that commercial arson had increased by 23% in the second half of 2008.

AXA’s head of customer risk management Doug Barnett said: “I think it is a problem that is continuing to grow and will probably increase over the course of next year.”

He told Insurance Times that the increasing number of vacant properties owing to the recession forcing businesses to close, and a rise in opportunities for vandalism, were the main drivers behind the spurt in arson.

Aviva’s property risk manager Allister Smith believed that 40% of all commercial fires are now arson related.

“I think property insurers are very concerned about it. We have seen a 16% increase in the cost of fire losses and our own losses are fairly reflective of those figures as well.

“Just under half of all fire losses in the commercial arena are arson, so it is a serious problem in this country that needs to be tackled,” he said.