Allianz General raises awareness on fire insurance

Allianz Malaysia Bhd chief executive officer Sean Wang

PETALING JAYA: Owing to the rising number of fire incidents in buildings over the past few years, Allianz General Insurance Co (M) Bhd has organised a media forum – “Ignore the Peril, Face the Mayhem” – with the aim of raising awareness on fire safety, as well as the importance of commercial insurance.

The forum, in partnership with the Fire and Rescue Department of Malaysia (Bomba) and Universiti Malaya’s department of building surveying under the Faculty of Built Environment, saw industry experts dive deep into issues, misconceptions and solutions surrounding fire insurance for commercial properties.

Bomba fire safety division senior fire superintendent one, Mohd Zaid Abd Ghani, pointed out that there has been an increase in fire breakouts with the number of cases hovering around 7,000 a year from 2019 to 2021 and losses estimated at RM1.12bil per year.

In comparison, he added from 2010 to 2018, the number of fire breakouts was consistently above 5,000 cases with a mean of 5,335 cases and a total estimated loss of RM21.95bil.

Mohd Zaid said Bomba’s fire investigation department found that 60% of fire breakouts in buildings were electrical-related over the same period of time.

In 2021, structural fire incidents stood at 7,447 cases, the highest since 2018, and involved 804 shops, 408 factories, 263 storage facilities and 200 offices.

The top three sources of ignition for structural fires were electrical (4,558 incidents), gas equipment (1,328 incidents) and lighters (525 incidents).

Allianz General head of risk engineering and consulting, Syed Zain Syed Noh, said the dominating cause of fire breakouts are electrical short-circuit and electrical resistance that comes from simple mistakes such as loose connections, electrical overloading, faulty electrical devices and faulty cable insulations.

“For commercial properties, the lack of maintenance is one of the key causes of fire incidents due to old installations and equipment, improper installation, lack of regular inspection, and no supervision during operation hours.

“Most importantly, electrical fires are preventable, and it is all down to managing risks and having actionable solutions,” Syed Zain said.

Syed Zain said commercial business owners should get into the habit of reviewing or re-visiting possible risks when any material change takes place on their premises such as building expansion or installation of new storage technology to identify potential risks.

“Secondly, say no to short cuts when it comes to safety standard requirements and guidelines no matter how attractive or lucrative it may seem at that moment and lastly, have a solid, reliable risk management plan that will help with continuity of their business in the event of a disruption,” Syed Zain added.

Allianz Malaysia Bhd chief executive officer Sean Wang said business owners must change their mindset of putting cost and probability of claim above safety issues and undertake a proper risk assessment of their premise.

“This forum is about raising awareness and to put it plainly, the issue is not that the sector is underserved.

“Unfortunately, it is the lack of the sense of vulnerability when it comes to fire safety or safety in general,” Wang said.

“To set things right, commercial insurance is not a buy one, fits all type of coverage.

“If you’re a business owner, having fire insurance is not a be-all, end-all,” Wang added.

When it comes to property damage, one of the most crucial points of insuring commercial buildings is for business owners to understand the basis of sum insured – either market value basis or reinstatement value basis, he said.

“It is vital that the value or sum insured for the insurance covers for the buildings, machinery, stocks and the like is assessed and reviewed regularly,” Wang highlighted.