Property fire claims exceeded £1bn in 2001, according to figures from the Association of British Insurers (ABI).
The association says that it is the first time in a decade claims have reached such levels, and they are continuing at record levels.
This is resulting in spiralling premiums, so the ABI has warned that more emphasis must be placed upon fire prevention to curb this trend.
ABI spokesman John Parker said: "The current level of fire losses must be reduced. The insured losses are bad enough, but they are only part of a wider disturbing picture. Fires are estimated to cost the UK economy nearly £7bn a year. Arson in particular remains a major problem.
"Businesses must face the fact that they need to put more effort and resources into reducing the risk of fire. Effective risk management is key, especially as there has been an increase in large-scale fires.
"Costly disruption, lost productivity, risk of business failure and higher operating costs, including more expensive insurance premiums, all follow from the failure to treat the risk of fire seriously."
