RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Jonathan O’Neill FPA Managing Director RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Arson – A Call to Action – RISCAuthority, FPA & Insurers Response

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Plus

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Introducing the FPA and RISCAuthority Mission is to identify current and future issues that may detrimentally affect UK property Insurance and to manage and mitigate the consequences. Provide text that underpin current insurer fire protection Make fire protection financially and technically attractive to the insured property owner Focal point for all stakeholders interested in fire protection Encourage commonality with government policy

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Arson – A Call for Action Data & trends identified to be presented by ABI to APF to allow other organisations to contribute to reducing the costs of Arson and associated impact on society FPA the RISCAuthority working with ABI to ensure data required to inform the scale of the problem is presented to APF annually A figure is captured for the cost of arson as this is not separately recoded from the total cost of fire

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Welcome Reduction in Number of Fire Claims

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice But Financial Losses Remain Stubbornly High

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Fire Headlines *Data from Association of British Insurers

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Business Interruption Headlines *Data from Association of British Insurers

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Large Loss Data Base NameAccidental% of totalDeliberate% of totalUnassigned% of totalUnknown% of total Animal Related Car Parks Dwelling Education Entertainment and Culture Food and Drink Grassland, woodland and crops Industrial Processing Medical Non Residential -Misc Other outdoors (including land) Other Residential Outdoor equipment and machinery Outdoor structures Permanent Agricultural Public Admin Public Utilities Religious Retail Sport Transport Unassigned Warehouses

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Cost of Arson Headline figures Deliberate causation accounts for 15.1% of large loss fires (fires with a minimum £100K loss). Accidental being the highest cause at 47.5% Occupancies with highest % frequency for Arson are: Dwellings Non Residential Misc (includes Labs/research centres; offices and call centres (permanent or temporary); studios and other private non-residential buildings Retail However 45% of all fires attended - deliberate or suspicious – improvement in recording required IRS

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Training Arson Investigators

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Arson – A Call for Action The insurance industry to commission research ABI to collate good practice with respect to arson reduction programmes within the insurance industry and share with APF for wider dissemination The insurance industry to invest in prevention ……

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice RISCAuthority Research & Guidance

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice FPA Guidance 2 publications and one DVD specifically covering arson Of the 69 FPA products in print currently in print all make reference to deliberate fire setting

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Preventing Arson by Design - FPA ‘Building of the Year’ Non-combustible materials of construction (properly ‘non combustible’) Excellent compartmentation Little or no reliance on ‘systems’ (human or mechanical) to deal with fire 15

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Insurer Guidance *Extract from Aviva – Risk Management Bulletin – Summer 2015

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Insurer Guidance

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Insurer Guidance

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Arson – A Call for Action The insurance industry to report on what has worked previously to drive down claims The insurance industry consider the role sprinklers may paly as a means of protecting properties and reducing the impact of arson and how their inclusion within buildings might reduce the fire element of insurance premiums

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Factors Affecting Size of Loss – Lessons Learnt Changes in the Built Environment Larger buildings, Greater use combustible materials Loosening regulatory environment Fire (Value) Engineering Loss of Local Building Acts Changes in fire and rescue response IRMP, Tightening fiscal environment

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Typical Surveyor Prompts

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Why Do Insurers Specify Sprinklers? Reliability – few sprinklered buildings appear in the large loss statistics Trust Tightly specified standards Third party certificated equipment Highly qualified installers Robust maintenance schedules Risk Proven Technology (Victorian Engineering?) Resilient They save insurers and their customers money

RISK INSIGHT, STRATEGY AND CONTROL AUTHORITY Reducing insurable risk through research, advice and best practice Arson – A Call for Action Data & trends Ensure data required to inform the scale of the problem is presented to APF annually Cost of arson (we need for IRS data) Commission research (RISCAuthority priority – Informer) Collate good practice (Guidance via portal) Invest in prevention Lessons Learnt Sprinklers