MGA issues plea as lithium batteries contribute to surge in fire-related home claims costs

Prestige Underwriting has called for heightened collaborative efforts between electric bike (e-bike) manufacturers and insurers following a surge in the cost of fire-related home insurance claims.

The managing general agent (MGA) said that its analysis showed the average price of such claims rose from £6,583 in 2007 to £24,021 in 2022.

It said the increase was partly attributable to the growth in the use of lithium batteries, which can be found in electric-powered vehicles.

During Insurance Times’ Fraud Charter on 19 September 2023, Mark Allen, the ABI’s head of fraud and financial, said fire risks that lithium-ion batteries presented were causing “real concern”.

According to London Fire Brigade (LFB) data from December 2023, there were 150 e-bike fires in London and 28 e-scooter fires last year, some 53% more than 2022.

Prestige said this alongside a rise in the cost of claims indicated “a pressing need for heightened vigilance and collaborative efforts”.

“Prestige Underwriting are urging e-bike manufacturers to proactively engage with insurers and redouble their efforts to ensure that consumers are more clearly informed of the potential risks from lithium batteries and how to mitigate them,” the firm said.

’Escalating pattern’

While claims costs increased over the last 15 years, Home Office data also showed the number of domestic fires in the UK decreased from 53,000 in 2007 to 18,800 in 2022.

However, Prestige said the costs associated with fire-related claims were expected to continue rising.

Alison Williams, managing director of Prestige, said: “The escalating pattern in fire-related claims, particularly fuelled by lithium battery-powered devices, is modelling as the capital’s fastest-growing fire risk and demands a collaborative approach to solve.

“We urge manufacturers to work with insurers to help consumers and for us to work together to implement preventive measures as well as ensure the safety of these widely used devices.”