OP: A record number of large insurance claims in 2018
2018 was a record year in terms of large insurance claims according to OP Financial Group’s statistics. This was particularly due to the economic upturn that boosted business activity, as well as exceptional weather and natural conditions.
In January–December, OP’s Non-life Insurance recorded 98 large claims under property and general liability insurance, compared to 85 in 2017. Claims expenditure on large claims totalled EUR 107 million, while this was EUR 78 million a year earlier. A large claim refers to a claim that equals or exceeds EUR 0.3 million. These typically include major fires and serious road accidents such as accidents at railway crossings.
In 2018, the total claims expenditure amounted to EUR 977 million which was clearly higher than a year earlier.
Snowy winter and other weather phenomena reflected in statistics
Natural phenomena, such as an exceptional winter, storms and heavy rains, strongly affected insurance claims in 2018. A particularly snowy winter and challenging road conditions lasted as long as April across Finland, which increased the number of road accidents and motor vehicle claims in particular. In 2018, OP paid compensation to private customers for an average of 390 road accident claims per day, compared to 343 in 2017, representing a year-on-year increase of nearly 14%. On a record-breaking day in early March, the number of claims paid on a single day exceeded 800.
The large amount of snow also caused a considerable peak in forest damage claims. A total of 88% of all forest damage claims compensated by OP in 2018 were caused by snow, compared to just 30% in 2017. Moreover, the hottest May–August period on record in Finland and individual storms also had an impact on claims statistics.
”Last year was characterised by a long, snowy winter. The past winter may not be a one-off exception in Finland, as unusual weather phenomena may become permanent due to climate change. Insurance companies around the world must evaluate how the accelerating climate change will affect claims development, as well as identify measures to slow down climate change”, says Olli Lehtilä, Executive Vice President, Insurance Customers, OP Financial Group.
Economic upturn increased claims volumes
In 2018, a strong upcycle in the Finnish economy was reflected in the strong growth of claims volumes. For example, in the transport sector, a higher volume of transports combined with poor road maintenance in a number of areas led to a higher number of road accident claims. The total claims expenditure for corporate customers’ road accidents classified as large claims exceeded EUR 3.8 million, compared to approximately EUR 2.2 million in 2017. Furthermore, the number of corporate customers' large claims due to swerving off the road doubled year-on-year.
”Economic cycles have a major impact on claims development since increased economic activity is also reflected in a higher number of claims. Economic growth fuels business activity, which in turn increases the risk of loss or damage. A strong economy with sufficient growth forms a solid foundation for our society. Meanwhile, our shared challenge is to find ways to prevent losses regardless of economic cycles”, Lehtilä concludes.
The information is based on insurance claims received by OP Insurance.
Further information and requests for interviews:
OP Corporate Communications, tel. +358 50 523 9904, firstname.lastname@example.org
OP Financial Group is Finland's largest financial services group whose mission is to create sustainable prosperity, security and wellbeing for its owner-customers and in its operating region by means of its strong capital base and efficiency. OP Financial Group consists of 156 member cooperative banks, its central cooperative OP Cooperative, and the latter's subsidiaries and affiliates. The Group has a staff of 12,000 and 1.9 million owner-customers. www.op.fi