2006
(12/10/2006) Business crime insurance claims on the increase
- AXA Business Crime Index reports 3% increase in number of crime related business insurance claims
- Arson is fastest growing crime related business insurance claim
- Derby tops the city business crime table
The latest findings from the AXA Business Crime Index show a 3% increase in the number of crime related insurance claims by businesses in the second quarter of 2006 compared to the first three months of the year. The Index, which is based on AXA’s own claims data, also reveals that over the same period, the number of arson claim settlements increased by an alarming 12% while malicious damage claims, such as graffiti and smashed windows increased by 11%. However, incidences of theft, which accounts for the majority of crime related insurance claims by businesses, fell by 1% between the first and second quarter though it still accounts for over 10% of all insurance claims made by businesses.
While arson accounts for a relatively low number of crime related insurance claims (4.2%) its impact on business can be devastating. The average claim settlement amount for a case of arson was around £40,000 in the second quarter of 2006 and it accounted for around £4 in every £10 insurers paid out in crime related insurance claims during this period. Across all crimes, the average insurance settlement amount is now £4,024.
While the impact of malicious damage on businesses tends to be more limited, the increase AXA has experienced in dealing with malicious damage claims comes despite a government crackdown on anti-social behaviour.
Commenting on the results, Neil Mercier, property insurance manager at AXA said: “Much of the focus surrounding the issue of crime is on the individual while the impact on the business community is often overlooked. We estimate that British insurers pay out around £1.9 million in business crime related claims per day; the true cost of crime to British business is likely to be far higher as not all crimes are reported. Indeed, one in five claims we process on behalf of businesses is a result of criminal activity which highlights the severity of the problem.
“We therefore urge businesses to do what they can to protect themselves against criminal behaviour. Our website www.axa4business.co.uk contains a range of guides for SMEs including on how to protect themselves from criminal activity.”
Quarter two 2006 findings from the AXA Business Crime Index
Arson is the most financially crippling crime small businesses can face; between April and June 2006 it accounted for 40% of crime related insurance payouts to businesses despite accounting for just 4% of crime related claims in the same period. Theft is the most common claim and accounts for the largest share of business crime related insurance settlements.
| Type of claim | % of all Crime Related Claims Settled Q2 2006 (cost) | % of all Crime Reated Claims Settled Q2 2006 (numbers) |
|---|---|---|
| Arson | 39.90% | 4.21% |
| Forcible/Violent Entry/Exit | 0.43% | 0.47% |
| Malicious Damage | 11.06% | 36.79% |
| Theft | 48.60% | 61.62% |
UK business crime by city
Derby tops the city business crime table this quarter, with 27.41% of claims settled between April and June being a result of criminal activity. Birmingham (25.55%) sees a 2% decrease compared to the previous quarter and drops to second place. Newcastle (13.85%) experienced a 5% decrease compared to the first quarter to become the city with the lowest proportion of crime related business insurance claims.
| City | % point change Q1 2006 - Q2 2006 | % Claims resulting from crime Q2 2006 |
|---|---|---|
| Derby | 3.95% | 27.41% |
| Birmingham | -2.32% | 25.55% |
| Leicester | 0.70% | 24.23% |
| Bradford | -0.51% | 23.67% |
| Leeds | -0.23% | 22.84% |
| Middlesbrough | 5.02% | 22.22% |
| Ipswich | 1.36% | 21.47% |
| Manchester | 3.23% | 21.37% |
| Nottingham | 2.59% | 21.29% |
| Cardiff | -6.03% | 20.79% |
| Norwich | 2.12% | 20.61% |
| Bristol | 2.00% | 20.13% |
| Glasgow | 5.13% | 19.25% |
| Edinburgh | 1.64% | 17.36% |
| London | -0.20% | 15.68% |
| Bath | -4.33% | 15.38% |
| Liverpool | 2.11% | 14.94% |
| Newcastle | -5.33% | 13.85% |
AXA offers a free crime prevention toolkit designed to help businesses protect themselves against criminal activity. The AXA Business Security Blueprint provides best practice advice on everything from securing windows and doors to CCTV and fire suppression systems. It can be downloaded free of charge from www.axa4business.co.uk.
- Ends -
About AXA’s Business Crime Index
*The index is based on figures from AXA’s own claims database. This release covers findings from April, May and June 2006.
**The figures are based on AXA’s claim payments in 2005, and its share of the SME population in the UK .
More information
If you are a journalist and require further information contact Melissa Jobson on 0020 7369 4293
About AXA
AXA Group is a worldwide leader in Financial Protection. AXA's operations are diverse geographically, with major operations in Western Europe , North America and the Asia/Pacific area. AXA had € 1,091 billion in assets under management as of June 30, 2006 , and reported total revenues of € 41 billion and underlying earnings of € 2,090 million for the first half of 2006.
AXA ordinary shares are listed on the Paris Stock Exchange; AXA American Depositary Shares (ADSs) are listed on the NYSE under the ticker symbol AXA.