Business Interruption Insurance Trends 

Risk scenarios are becoming ever more diverse and complex while increasing interconnectivity means the potential for higher losses from business interruption is growing. 


Business interruption (BI) risks can be physical, such as fire or storms, or virtual, such as an IT outage, which can occur through malicious or accidental means. They can stem from their own operations but also from a company’s suppliers, customers or service providers.

Whatever the trigger, the financial loss for companies if they are unable to provide products and services – or customers stay away – can be enormous. New risk management solutions and analytical tools can help to better understand and mitigate the modern myriad of business interruption risks and prevent losses before they occur.



Irrespective of whether it results from traditional exposures such as a fire at a manufacturing plant, a natural catastrophe which impacts production or a break in the supply chain due to property damages at the premises of a supplier or customer (often known as contingent business interruption), business interruption can have a tremendous effect on a company’s revenues, even if the event occurred thousands of miles away. Potential loss of income can be one of the hardest risks to measure.

Businesses are facing an increasing number of disruptive scenarios as the nature of business interruption risk evolves in today’s globally connected economy. Many of these scenarios can occur without physical damage but with high financial losses. Breakdown of core IT systems, product recall or quality incidents, terrorism and political violence events or riots, environmental or pollution incidents or even regulatory changes can bring businesses to a temporary or prolonged standstill and have a devastating impact.

Business interruption risk can be reputational and always financial and therefore should be well-planned for. Companies can often underestimate the complexity of getting back to business but risks can be mitigated. A sound business continuity plan should be written and tested in a tabletop exercise to be effective. Ideally, the tabletop exercise should be prepared well in advance and designed to test location-specific vulnerabilities.

Fire / explosion accounted for 59% of 1,807 BI claims globally, according to data analyzed over a five-year period. According to AGCS insurance claims analysis, the vast majority of insured BI losses are not caused by natural catastrophes. Non-natural hazard events account for 88% of BI losses, according to value.
Allianz Global Corporate & Specialty (AGCS) supports businesses further through provision of a number of business interruption and contingent business interruption insurance solutions including cyber business interruption insurance and non-damage business interruption insurance, which indemnifies a business for lost revenue due to disruption from an event. AGCS also utilizes semantics analysis to better understand supply chain risk. This enables mapping of supplier relationships down to the fourth tier in order to help identify any exposure or accumulation issues.
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Annual survey identifying business risks

Technology is breeding new threats as well as business models. Traditional risks such as natural catastrophes continue to challenge while other threats such as cyber, neck-and-neck with business interruption at the top of the Allianz Risk Barometer 2019 for the first time, reputational risk, increasing exposure to intangible assets and volatility and consolidation in the corporate environment evolve daily.

Top 3 global risks in 2019 

  1. Business interruption (37%) - 2018 rank: 1 (42%)
  2. Cyber incidents (37%) - 2018 rank: 2 (40%)
  3. Natural catastrophes (28%) - 2018 rank: 3 (30%)
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