Fire claims are at their highest since records began, new figures reveal. Last year's fire claims total was the highest since the Association of British Insurers (ABI) began collecting such data.
The UK domestic insurance industry, excluding Lloyd's, paid out fire claims worth £309m in the first three months of 2002, an increase of 10% on the last quarter of last year. Domestic claims rose by 12% and commercial claims rose by 10% to £221m.
The first quarter of this year has already generated claims worth 37% more than the same quarter last year. The main increase over the 12 months has come in commercial business, where fire claims have risen 115%. Domestic claims have fallen over the period by nearly 30%.
The statistics are revealed in the ABI's Insurance Trends quarterly review for July. The industry paid out £1.07bn in the first quarter of this year. Weather damage accounted for 37% of this total, with fire making up 29% and theft nearly 19%. Business interruption and domestic subsidence accounted for 10% and 5% respectively. Business interruption claims leaped from £24m in the fourth quarter of last year to £107m in the first quarter of this year as a result of a small number of huge claims, an ABI spokesman said.
The most expensive year for business interruption claims was 1997, when the annual total was £270m. Industry losses from weather damage in the first three months of 2002 rocketed to £398m, a rise of 83% on the previous quarter, as domestic policyholders claimed for storm damage and burst pipes. Overall, weather claims are much lower than the last quarter of 2000, when they reached £745m due to severe storms and flooding.
Theft claims rose by nearly 10% on the last quarter of 2001, up from £183m to £201m. Fraud, too, is increasing, with 35% more frauds identified in the six months to June than in the same period last year according to CIFAS, a not-for-profit fraud prevention service. CIFAS chief executive Peter Hurst said the industry had to face up to fraudsters who exploited security loopholes over the internet and telephone to sign up for new policies under false identities.
CIFAS identified 19,510 false identity frauds in the first six months of 2002. This is a shocking 50% rise from the 12,989 in the same period last year.
Hurst said only about 75% were spotted in time to prevent the fraud going ahead. There were another 15,821 cases of impersonation, creating a total of 35,331 identity crimes from January to June this year.