A recent analysis by Allianz Commercial has revealed that companies are increasingly at risk from surging business interruption losses. The average total value of a business interruption claim now exceeds €850,000, which is around 70% higher than the corresponding average property damage claim of close to €500,000. This significant difference highlights the substantial financial consequences of being unable to operate. The report analyzed 7,888 business interruption insurance industry claims with a total value of approximately €6.74bn, or US$7.82bn, from January 1, 2021, to December 31, 2025.
According to Thomas Lillelund, CEO of Allianz Commercial, the operating environment is challenging due to geopolitical tensions, trade fragmentation, cyber-related incidents, and growing dependency on technology such as artificial intelligence (AI). Businesses need to identify and better understand not only their own critical assets but also those of the suppliers, technologies, and infrastructure on which their operations depend. The report found that fire is the dominant cause of loss, accounting for more than 40% of the total value analyzed, equivalent to approximately €2.9bn, or US$3.3bn.
Fire and explosion is the costliest cause of business interruption claims, with fire responsible for nine of the 10 costliest man-made business interruption events in the dataset. Natural catastrophes are the second-costliest cause, representing 34% of the value of claims analyzed, and the most frequent, accounting for 26% of claims. Together, fire and explosion and natural catastrophe events generated more than 75% of total claim value. However, events that do not involve natural catastrophe activity remain the principal overall business interruption loss driver, accounting for 74% of claims and 66% of their total value.
The analysis also found that recovery is taking longer and costing more. Some natural catastrophe claims are developing over increasingly long periods, with many associated business interruption claims remaining unresolved two years after Hurricane Helene in September 2024. Supply chain delays, labor shortages, and volatile material costs can extend both recovery and settlement. Concentrated production is also amplifying losses, as industries can depend on a limited number of specialist sites, suppliers, or regions for critical materials and components.
Underinsurance remains a key risk as declared values can be inadequate due to factors such as inflation, highlighting the importance of regular review to ensure it reflects current operating conditions. Charlotte Field, Regional Head of Short-tail Claims at Allianz Commercial Asia, emphasizes that businesses should regularly review their declared values and business interruption exposures to ensure they accurately reflect current revenues, costs, and operating conditions.
Cyber disruption is also broadening the risk landscape, with ransomware remaining the leading cyber-related cause of disruption. However, a growing share of loss activity is being driven by cloud outages, software failures, and incidents at third-party technology providers. More than 48,000 outages were tracked across cloud and software services in 2025 alone, highlighting businesses’ rising dependence on digital supply chains.
Alberto Barani, Business Interruption Global Practice Leader at Allianz Commercial, stresses that preventing business interruption is no longer just about protecting individual sites. Investments in fire protection, natural catastrophe resilience, cyber preparedness, and business continuity planning can make a meaningful difference to both the duration and severity of a business interruption loss. Even relatively modest investments can significantly reduce the impact of disruption when it occurs.
Key points
- Companies face rising business interruption losses due to concentrated production and fragile supply chains.
- Fire and explosion is the costliest cause of business interruption claims, accounting for over 40% of the total value analyzed.
- Cyber disruption is broadening the risk landscape, with a growing share of loss activity driven by cloud outages and software failures.
