Arson Prevention Forum

47% of all fires attended by fire and rescue services in England

are classed as deliberate

Insurers

Insurance is a risk management business where the policy holder transfers the financial risk of incurring a loss to a third party (an insurer) for a price (annual premium). To calculate an appropriate premium, the likelihood of the negative event (insured peril) occurring and the cost of meeting the loss (exposure) is considered. 

The insurance market operates  on the basis of the level of risk that is presented and there is clearly a link between risk and terms and conditions insurers are prepared to offer. 

The actions of government can have an impact on insurance costs including setting the level of Insurance Premium Tax through to the way in which buildings are designed and how public policy is enacted including emergency service response. 

Insurers have a role to play and pay out in excess of £1bn in fire related claims each year (ABI). Insurers remain concerned at the impact of arson as whilst the number of fire related claims are decreasing, the cost of these claims are increasing. 

By their very nature incidents of arson tend to result in larger fires and insurers are therefore clearly key stakeholders in any arson reduction strategy. 

There is good practice identified by  the ABI and FPA (who have remained strong supporters of the APF), as have some  individual insurers, it is felt that by acting more collectively, the sector could make an even stronger impact to reduceof the number of deliberately set fires.

It is recognised that more favourable terms and conditions may be obtained by policyholders who have good arson deterrent measures and good arrangements for controlling the spread of fire in the event that it does occur.

This has benefit for insurers as they improve the  quality of risk, it makes sense for the insured as they are less likely to suffer from the impact of a major fire and also works for the Government as business rates continue to be collected which would not be the case if the company was not in business.  

It is recognised that arson is more of a problem for insurers who cover commercial buildings than it is for those who cover residential buildings. According to the ABI, 29% of commercial fire claims in the UK can be considered as ‘deliberate’ whilst 4-5% of domestic fire claims in the UK can be considered as ‘deliberate’.

The ABI continues to encourage their members to develop a robust dataset and collate deliberate and non-deliberate fire claims and costs going forward. Commercial insurers therefore may want to take an even greater interest in risk mitigation and arson prevention approaches. 

Given that 45% of all fires are classed as deliberate by the Fire Service and insurers pay out £1b in fire related claims each year, there is a collective benefit in gathering better information and statistics on the cost of arson to insurers. The Home Office could be a key enabler in releasing IRS data to organisations like the FPA so that they may be able to better match incidents of deliberate fire setting with cost to insurers of individual claims. 

There were examples offered where the ABI members had been proactive in driving down arson with customers or where the FPA or ABI had supported insurers through industry analysis or initiatives but it was hoped to have drawn out more examples. 

A refresh of the membership in 2017 has seen the British Insurance Brokers Association join the forum. Given their role in advising commercial policy holders as to risk mitigation approaches, this is very much welcomed. 

Insurance Fraud Task Force

The Insurance Fraud Task Force was commissioned by HM Treasury and was established in 2015 and reported in January 2016 led by David Hertzell. The report states (para 2.80 and 2.81):

“Arson: not all arson involves a fraudulent insurance claim but some clearly do. Without better data it is impossible to know how much and whether trends are improving or deteriorating. The Arson Prevention Forum (APF) presented evidence to the Taskforce suggesting that the number of insurance claims involving elements of arson are increasing in size, and the overall costs are large. One of the biggest barriers to understanding the scale of the problem is a lack of comprehensive arson statistics, due to different definitions of arson, for example by insurers and fire services, and a lack of co-ordination between stakeholders”. “The Taskforce notes these concerns. It is essential that policyholders trust the data that is held on them. Highly publicised errors in this area given overall public sensitivity could result in restrictions being imposed that would hamper the effective fight against fraud”.

Insurers Round Table

As part of a campaign to raise the profile of arson and to consider how responding agencies and insurers can work better together, a round table was held and covered by the insurance magazine POST. It was hosted by DAC Beachcroft and discussed the following issues which were thought to contribute to the increase in cost of fires:

Training and competence of fire investigators along with the role of forensic scientists at crime scenes is of critical importance. It was noted that a Code of Practice for investigators of fires and explosions for the criminal justice systems in the UK had been recently agreed between the NFCC, Institution of Fire Engineers and the UKAFI.  The Code of Practice has taken on a further significance with the recent changes (which came into force on April 3rd 2017) to the declaration of the expert witness as described in the Criminal Procedure Rules rule 19(4) (j), (k) part 13 where the expert’s required declaration has been changed to “I confirm that I have acted in accordance with the code of practice or conduct for experts of my discipline, namely [identify the code]”.  The Code of Practice provides a baseline for the necessary knowledge and skills required by fire investigators, as agreed by the discipline experts, and as such defines a road map for both training and competence of practitioners which aligns with existing frameworks such as Skills for Justice.

The Chairman of the NFCC, Roy Wilsher OBE, attended and provided valuable insight into the view that there is some risk aversion being adopted by firefighters. It was clarified that firefighters would take personal risk to save saveable lives but would be unwilling to commit firefighters into burning buildings that were likely to collapse where there was little prospect of saving lives. 

The discussion considered the extent to which the Building Regulations is focused on life safety rather than property protection and the impact that this might be having on fire losses, including deliberate fires. Obtaining data from the Incident Recording System used by Fire and Rescue Services is problematic despite every FRS being prepared to release such data to the Fire Protection Association. 

Cooperation between fire investigators and forensic scientists at fire scenes was discussed and whilst some felt that improvements could be made, the majority of attendees were assured that arrangements were robust. Where there are local difficulties, it was agreed that the NFCC could assist. . There was a prolonged discussion regarding proposed additional burdens on fire investigators from the ruling by Forensic Science Regulator that by 2020 fire investigation team required accreditation to ISO 17020. Concerns were expressed by fire and rescue service representatives that under budgetary pressures non-mandated services such as fire investigation could disappear. Insurer interests universally registered their concern at this development, confirming the vital role the fire service has in assisting the fire investigation process.