Cost of crime hits businesses in 2005

The latest findings from the index, which is based on AXA's own claims database, shows the average settlement amount for a crime-related insurance claim rose by a staggering 29.2 per cent, from £3,643 between October and December 2004 to £4,708 for the first three months of 2005.

By comparison, the average cost of a non-crime related settlement rose by 2.3 per cent in the same period.

AXA says the vast majority – 95 per cent – of crime related claims by business are so-called 'petty' crimes of theft and malicious damage, such as graffiti or smashed windows. But the research suggests the cost of such anti-social behaviour is becoming an increasing burden to the business community.

Arson, while rare, remains the most expensive type of criminal business insurance claim, with instances running into hundreds of thousands of pounds.

Though arson accounted for less than three per cent of crime-related business claims settled between January and March 2005, it was responsible for well over one-third of the total value of settlements.

According to AXA, arson was responsible for 38.49 per cent of the cost of claims made in the first quarter of this year, while forcible or violent entry/exit was 0.42 per cent, goods in transit 0.01 percent, malicious damage 15.34 per cent, money/hold ups 0.02 per cent, money (non-forcible) 0.08 per cent, and theft accounted for 45.64 per cent.

Neil Mercier, property insurance manager at AXA, said: “These findings confirm what we have experienced with our business customers; namely, that criminal activity against businesses is widespread and costly. It's essential that they take measures to protect themselves against the threat, not just by having adequate insurance cover, but by looking at the risks their business faces and finding practical solutions to safeguard their staff, property and other assets.

Steven Hill, policy advisor at the British Chamber of Commerce, said: “These figures show that crime continues to plague firms across the UK.

“Businesses require more support from the police and local authorities in tackling the issue, but there are also a number of relatively simple steps they can take themselves to combat crime.

“These range from ensuring that all doors and windows are secure to installing a security system.”

AXA's figures also show that Nottingham has reported the highest percentage of claims that are a result of criminal activity, at 25 per cent, while Newcastle was only on 12.2 per cent. Bath and Ipswich were the two highest after Nottingham, on 24.7 per cent and 24.3 per cent respectively.