Crawford & Company®

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Fire

Fire is one of the most expensive property insurance claims, with £1.3 billion being paid out to customers during 2018, according to the Association of British Insurers.

On 23 March, the UK Government placed the country into lockdown in response to the ongoing spread of the coronavirus pandemic.

Since the commencement of the new regime, Crawford® has been monitoring its impact on claims activity. During this period, loss data across virtually every line of business has shown a marked decline in all areas, except one – fire claim submissions.

During the lockdown period, Crawford has reported a 40 percent increase in reported fire-related incidents.

In this data study, we examine:

• The impact of lockdown on the number of UK commercial and domestic fire claims

• Fire claims by property, outbuilding and outside area• Regional variations in fire claim numbers• The impact of lockdown on causes of fire ignition• Factors contributing to the increase in fire-related claims

This study is based on data analysed between 1 September 2019 and 11 June 2020. During this period, Crawford has recorded a significant increase in fire-related incidents during lockdown, with a 40 percent spike in activity over the period 1 May to 11 June. This spike is illustrated in Figure 1.

Raising the alarm

Fire incidents in lockdown

Figure 1 – Commercial and Domestic Fire Claims

At a more granular level, Figure 2 provides a breakdown of the total number of fire-related incidents by commercial property, domestic property, outbuildings and outside area during the lockdown period.

Commercial and Domestic Fire Claims10/19 - 06/20

Figure 2 – Fire Claims – Property, Outbuilding, Outside

The data reveals that outdoor areas, including outbuildings across both property and commercial locations, account for 60.1 percent of fire-related incidents during this period.

An analysis of fire claim submissions during the UK lockdown across domestic and commercial properties, including outbuildings and outdoor areas by Crawford® data science team:

36.1%of outbuilding fires are arson

60.1%of fires occurring in outbuildings or outside

40%increase in fire claims

22.2%

25.5%

15.7%

17.6%

9.8%

9.2%Commercial Property

Commercial Outbuilding

Commercial Outside

Domestic Property

Domestic Outbuilding

Domestic Outside

Further analysis by Crawford of the fire-incident data has revealed how the UK lockdown is impacting the primary ignition sources of these events.

Figure 4 provides our analysis of data compiled by the UK Home Office over the last 9 years, summarising the causes of fire within both domestic and commercial properties, as well as outdoors. The figures reveal that during this period, cooking appliances accounted for 50 percent of domestic fires while for commercial properties cooking appliances and electricity supply account for almost 36 percent of all fire incidents.

Fire sources

Figure 3 – Summary of Pre and Post Lockdown Changes

Figure 4 – Causes of Fire (UK) 2010-2019

Dwelling

Commercial

Outdoor including outbuildings

17.6%

35.1%

38.6%

22.2%

26.3%

60.1%

2020 Pre Lockdown 2020 Post Lockdown

Fire incident statistics Since 2010, the UK has recorded a steady year-on-year decline in fire incidents in both dwellings (16 percent decline) and commercial buildings, while outdoor fires have increased during this period.

Source: UK Home Office data

35,000

25,000

15,000

30,000

20,000

10,000

5,000

02010/11 2011/12 2012/13 2013/14 2015/16 2017/182014/15 2016/17 2018/19

Fire incidents2010-2019

Dwellings Commercial Outdoors

Cooking appliance

Electricity supply

Other domestic style appliance

11.4%

49.7%

9.9%

Domestic Property

Comparing the post-lockdown incident figures to pre-lockdown (Figure 3) shows a significant shift in the primary locations for the reported fires, with the outdoor area including outbuildings seeing an increase of over 187 percent in the number of events recorded following the transition.

Source: UK Home Office data

Electricity supply

Cooking appliance

Industrial equipment

18.4%

17.5%

9.8%

Commercial Property

Figure 5 provides a breakdown of the sources of fire-related submissions received by Crawford since lockdown began inside the main property, in outbuildings and in outside areas.

Our analysis of the claims data received during lockdown has revealed a number of key findings:

• Only one in 20 property claims was caused by cooking equipment

• There was an even split of property, outbuilding and outside fire claims Typically, the bulk of incidents occur inside the main property

• One in three outbuilding fires and one in five outside fire claims are suspected cases of arson

• Electrical equipment is the main cause of property and outbuilding fires, which may be as a result of increased electricity usage during lockdown. The main attributable cause of suspected arson accounts for 31.6 percent of outbuilding fires

• Open fires accounted for almost 64 percent of outside incidents, while BBQs and smoking-related fires only accounted for four percent each

Figure 5 – Fire claims during lockdownSource: Crawford

Inside the property

VehicleSuspected Arson

Open FireHeating Appliance

Faulty WiringElectrical EquipmentCooking Equipment

Chimney FireCandles

2.9%11.4%

5.7%8.6%

20.0%5.7%

34.3%8.6%

2.9%

VehicleSuspected Arson

Open FireHeating Appliance

Faulty WiringElectrical Equipment

VehicleSuspected Arson

Open FireFaulty Wiring

Electrical Equipment

10.5%31.6%

21.1%5.3%

26.3%5.3%

Outbuidling

4.5%18.2%

63.6%4.5%

9.1%

Outside

Regional BreakdownAnalysing our data to understand the regional distribution of fire claim intake over the last seven months has revealed that incidents are relatively evenly spread, although there is a suggestion of an increase in the East Midlands which could be contributing to the spike in claims we are experiencing currently.

It is worth noting that the proportional split of instructions across our major clients has remained even throughout this period, which suggests that the spike is at market level rather than influenced by the client instruction strategy.

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70%

90%

60%

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40%

30%

20%

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0%

East Midlands Greater London N Ireland North East North West Scotland

South East South West Wales West Midlands

West MidlandsWales

South WestSouth East

ScotlandNorth WestNorth East

N IrelandGreater London

East Midlands

9.0%6.2%

11.5%

11.4%11.4%

14.2%

7.3%6.7%

8.9%13.5%

There are four factors that are potentially combining to cause the surge in fire-related claims activity witnessed during lockdown:

1. Unusual seasonal weather May 2020 was the driest May on record for England and the second driest for Wales, while the spring period from March until May also recorded the largest number of hours of sunshine on record. As illustrated in Figure 7, the last recorded peak in fire incidents occurred during the June 2018 heatwave. Warm weather coupled with children being off school during lockdown leads to an increase in outdoor fires.

2. Home activityThe increase in activity in domestic properties as a result of the lockdown, while contributing to a decline in escape of water incidents, is also resulting in an increase in accidental electrical fires as there is an increase in device usage and a commensurate surge in overall electricity usage.

3. Fraudulent activityThere is a possibility that a number of fires are being started fraudulently at a time when the country as a whole is experiencing considerable financial strain. In 2009, the ABI reported that the 2008 recession had resulted in over 107,000 fraudulent insurance claims with a total value of £730m – a 17 percent increase on the previous year.

Contributing factors

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Oct

18

Oct

19

Jan

19

Jan

20

Ap

r 19

Ap

r 2

0

Jul 1

8

Jul 1

9

Source: Crawford

Crawford is here to support our clients in providing expert loss adjusting services.

We have developed a comprehensive Fire Claims Solution which centres on:

Getting fire under control

Paul BowyerHead of Crawford Claims Solutions, UK & IrelandT: +44 7824 690 049E: paul.bowyer@crawco.co.uk

Wayne CalderbankHead of Data Science, UK & IrelandT +44 7471 996 571E: wayne.calderbank@crawco.co.uk

Andrew Shaw, MCMI, BDMA, InsTechHead of General Property, UK & IrelandT: +44 7917 327 164E: andrew.shaw@crawco.co.uk

More informationFor further information on the range of fire-related services that Crawford provides, please contact:

Early intervention focusing on emergency works, mitigation and causation

Fast tracking claims through our restoration process

Project Management of claims utilising Fire Accredited loss adjusters, forensic expertise and qualified surveyors

Close partnership between our case project management team and Crawford fraud team

Partnership with Crawford Legal Services to manage subrogation from day one

Investment in Data Science to provide insight helping Crawford to refine its cost containment activity and case management processes

CRAW-DATADRIVEN-FIRE-BRO-A4-WP-0620

Learn more atwww.crawco.co.uk

About Crawford & Company®

For over 75 years, Crawford has solved the world’s claims handling challenges and helped businesses keep their focus where it belongs – on people.

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