- Allianz Global Corporate & Specialty recommends site security inspections and dedicated loss prevention measures to ensure a successful and safe reopening after lockdown.
- Fires, machinery breakdowns and faulty workmanship/maintenance among the most expensive causes of insurance claims.
- Condition of electrical equipment and installations is particularly prone to fire risks.
- Implement fire safety precautions for newly-introduced hand sanitizers and other flammable disinfectants.
Johannesburg – August 31, 2020 – The coronavirus pandemic has impacted African businesses and their employees – closing many operations. With businesses in many African countries reopening after a period of inactivity, it is important that they remain vigilant about the risk environment in order to identify unknown problems which might have occurred during closure, as well as to mitigate losses that might occur as a result of reopening, according to a risk bulletin from Allianz Global Corporate & Specialty’s (AGCS).
“Restoring operations at a facility that was once idle or vacant presents another set of loss prevention challenges, particularly to manufacturing plants with hazardous equipment or processes,” explains Deon Venter, Head of Risk Consulting at AGCS in Africa. “For example, fuel-fired equipment may need to be restarted, which creates an additional risk of fires and explosions. There may be a reduction in workforce available to operate and maintain production equipment safely or to respond to emergencies. Also, lapses in maintenance of buildings, equipment and fire protection systems may create hazardous conditions.”
Businesses should pay particular attention to the condition of electrical equipment and installations, as around 20% to 30% of AGCS fire claims are related to these. Insurers have also seen a number of claims from fires resulting from technical defects or operational error after machinery has been restarted or cleaned in preparation for reopening of facilities, which has then caused further disruption to operations.
AGCS analysis of insurance industry claims shows that fires already account for almost a quarter (24%) of the value of all business insurance claims over a five-year period – the major cause of losses – while faulty workmanship and maintenance (8%) and machinery damage (5%) rank as the 3rd and 7th top causes of claims respectively.
Restore site security
According to the AGCS bulletin Coronavirus: Property loss prevention measures for restarting businesses after a temporary closureanother essential action for businesses to consider before restarting operations is restoring site security. A thorough self-inspection of the site, including all buildings and equipment, to detect and correct any unsafe or abnormal conditions, such as damage, maintenance issues, improper housekeeping or storage, signs of vandalism, etc. should also be considered. Businesses should also complete and reinstate any inspection, testing and maintenance procedures that may have lapsed since the shutdown.
As always when restarting idle machinery, operators should follow standard operating procedures and manufacturer guidelines for bringing shutdown equipment or processes back online.
Fire risk of disinfectants
In addition, those facilities introducing alcohol-based (flammable) disinfectants, such as hand sanitizers, should implement proper fire safety precautions. This should include keeping them away from ignition sources, such as open flames, encouraging employees to rub their hands dry to allow vapors to safely dissipate, disposing of all waste rags in approved, normally closed containers, and storing flammables in designated cutoff rooms or approved cabinets.
“Prior to restarting operations is the ideal time to review the effectiveness of your business continuity plan,” says Venter. “Revise the plan as needed based on lessons learned during the temporary shutdown to keep your emergency planning up-to-date.”
Press contacts
Johannesburg: Lesiba Sethoga +27 112147948 lesiba.sethoga@allianz.com
About Allianz Global Corporate & Specialty
Allianz Global Corporate & Specialty (AGCS) is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 10 dedicated lines of business.
Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience.
Worldwide, AGCS operates with its own teams in 33 countries and through the Allianz Group network and partners in over 200 countries and territories, employing over 4,300 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial ratings. In 2019, AGCS generated a total of €9.1 billion gross premium globally.
Cautionary Note Regarding Forward-Looking Statements
The statements contained herein may include statements of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. In addition to statements which are forward-looking by reason of context, the words “may”, “will”, “should”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential”, or “continue” and similar expressions identify forward-looking statements.
Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) general economic conditions, including in particular economic conditions in the Allianz Group’s core business and core markets, (ii) performance of financial markets, including emerging markets, and including market volatility, liquidity and credit events (iii) the frequency and severity of insured loss events, including from natural catastrophes and including the development of loss expenses, (iv) mortality and morbidity levels and trends, (v) persistency levels, (vi) the extent of credit defaults, (vii) interest rate levels, (viii) currency exchange rates including the Euro/U.S. Dollar exchange rate, (ix) changing levels of competition, (x) changes in laws and regulations, including monetary convergence and the European Monetary Union, (xi) changes in the policies of central banks and/or foreign governments, (xii) the impact of acquisitions, including related integration issues, (xiii) reorganization measures, and (xiv) general competitive factors, in each case on a local, regional, national and/or global basis. Many of these factors may be more likely to occur, or more pronounced, as a result of terrorist activities and their consequences.
The matters discussed herein may also be affected by risks and uncertainties described from time to time in Allianz SE’s filings with the U.S. Securities and Exchange Commission. The company assumes no obligation to update any forward-looking statement.