Allianz hit by £25m riot claims exposure

Allianz UK is expecting £25m in claims from the rioting that took place between Saturday and Monday, chief executive Andrew Torrance estimated today.

However, he added that “the bulk” of the estimate was for property rather than business interruption, and therefore recoverable from the police under the Riot (Damages) Act 1886.

Insurance Times revealed earlier this week that Allianz had insured the Tottenham branch of Aldi, which was gutted by fire in the riots, for £4m.

The Act enables insurers to recover claims for certain types of losses from police funds. Property damage is covered under the Act, but business interruption is not.

While there is some discussion about whether insurers will be able to recover claims because the government has yet to officially declare the events as riots, Torrance said that the applicable portion of claims was “clearly recoverable under the Act”.

Torrance said that industry-wide loss estimates of between £200m and £300m were “not unreasonable”, but added that he felt higher estimates of £750m were too high.

Allianz have also confirmed they are the insurers for retailer JD Sports. "We are dealing with a number of claims from JD Sports outlets but it is too early to sat at the moment what the total cost of these claims is likely to be," said a spokesman.

Allianz today also reported its results for the first half of 2011.