Never work with animals or insects...

Heard the one about the raccoon and the destroyed interior of an unlocked truck? What about the coyote that ensured a company’s sprinkler system was permanently extinguished?  Or the fowl play from a turkey which had a gobble of someone’s leg? These aren’t just a list of bad jokes but are actual examples of some of the many claims insurers receive involving animals and insects.

Based on AGCS analysis of more than 470,000 global corporate and specialty insurance industry claims over the past five years in its latest Global Claims Review: Top Causes of Corporate Insurance Losses report, almost 2% (6,888) of these claims have involved animals, costing in excess of $500mn.

Dog incidents such as bites and scratches are the most frequent cause of animal-related claims, accounting for 30% (2,077). On average they cost almost €7,000 ($7,940). The second most common cause of loss is deer incidents (particularly involving collisions with vehicles). On average, these incidents cost in excess of €5,500 ($6,240) and account for 17% (1,186) of all animal-related claims received by insurers. The peak period for incidents (and claims) in the US is during October and November each year – otherwise known as the rutting season, which is when deer are engaged in fierce mating battles.

By far the most expensive insurance claims result from bird incidents, which are the third most frequent cause of animal-related claims (1,146). This is hugely influenced by one type of loss – bird strikes with  airplanes – for  which there have been over 900 claims in the past five years. The average bird strike claim costs around €322,000 ($368,000) in insured losses.

Bedbug incidents such as bites and infestations account for almost 8% (534) of animal-related claims received by insurers, according to the analysis, and have generated around €2.5mn ($2.84mn) worth of claims over five years, with the number of incidents rising. For example, the 2018 Bugs Without Borders survey, conducted by the National Pest Management Association and the University of Kentucky, found that infestations in the US continue at high rates, with 97% of respondents having treated for bedbugs in the past year. That number is significantly higher than 15 years ago when only 25% of pest control professionals reported treating for bedbugs. Meanwhile, in the UK, there has been a year-on-year increase in incidents since 2006, which shows no signs of plateauing, according to Bed Bugs Limited, one of the world’s first dedicated bedbug extermination companies1. While bedbugs are found year-round, infestations peak during the warmer months of the year (April to August in the northern hemisphere). The problem is exacerbated by a number of factors including warmer weather, bugs developing resistance to chemical treatments making eradication harder, and even people returning from their holiday with bedbugs in their luggage.
Read this article in Global Risk Dialogue. Appearing twice a year, Global Risk Dialogue is the Allianz Global Corporate & Specialty magazine with news and expert insights from the world of corporate risk.

SOURCES

1. The Guardian, Bedbugs plague hits British cities, August 19, 2018

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