AXA Reveals business crime up by over 19%

The latest findings from the AXA Business Crime Index* reveal a huge increase in the number of crimes against businesses. Although many of these are smaller malicious damage claims, it is clear that the business community is under increasing threat from criminal activity. The frequency of crime related insurance claim settlements in the second quarter of 2004 increased by a staggering 19.3% compared to the previous quarter. Around 1 in 5 of all business claims settled between April and June was a result of crime. Given these findings, it is not surprising that in an AXA survey of business owners,** 90% wanted tougher legislation for criminals who target businesses.

Despite the increase in crime, the index shows a 4% reduction in the collective cost of crime on the previous quarter. The average cost per settlement is now 3,384 down from 4,210 for the first three months of 2004. However, this is still higher than the figure for the same period in 2003 of 2,852.

Types of crime that affect UK businesses
Theft remains the major type of crime committed against business accounting for just under two-thirds of all business related crimes. Malicious damage has seen a dramatic increase in frequency and now accounts for over 30% of all crime against businesses. Even though violent crime against business is still rare, accounting for less than 1% of all crime related claims settled, there has been a worrying rise in incidences.

Type of Claim % of all Crime Related Claims Settled (Q2 2004) % of all Crime Related Claims Settled (Q2 2003)
Arson 3.03% 2.51%
Forcible/Violent Entry/Exit 0.21% 0.06%
Goods in Transit 0.06% 0.08%
Malicious Damage 30.34% 25.58%
Money/Hold Up 0.08% 0.02%
Money (non-forcible) 0.33% 0.77%
Theft 65.95% 70.99%

Neil Mercier, property insurance manager at AXA, said: ìWhilst crime against employees is relatively rare, the impact of crime on business can be disruptive and costly. Business owners need to be vigilant and thorough in their security precautions - there are many simple, cost-effective measures which can be taken to make businesses more secure against criminals, and these can also help reduce insurance premiums. The Government and many local authorities run schemes to assist with improving security measures.î

Professor Martin Gill, Perpetuity Research & Consultancy International, Leicester University said: ìOffenders tell us that crime is easy. Although security measures exist, they often do not stop offenders who find ways to manage these impediments. The insights they provide are illuminating. We need to ensure that we fully understand a company’s vulnerabilities and then build measures in response. All too often solutions are not sufficiently well thought through, and there is scope for vast improvements.î

David Frost, Director General of the British Chambers of Commerce, said: ìThese findings are consistent with our own, in that crime imposes real and significant costs on British businesses. This cost is not merely financial; it is human as well. Employers and employees are often left seriously demoralised by crime and incidents can cause serious disruption to the operation of affected companies as a consequence.î

UK business crime by city
The AXA Business Crime Index reveals that local businesses in Bradford are particularly at risk from crime, with just under 30% of all insurance claims settled between April and June 2004 resulting from criminal activity; the highest proportion of any major city in the UK. Bradford is followed by Birmingham (27.1%), Nottingham (25%) and Bath (24.7%). Liverpool (14.9%), Ipswich (15.8%) and Glasgow (15.8%) were found to have the lowest percentage of crime related business insurance claims settled during this period.

City Percentage of all claims resulting from crime Q2 2004 Percentage change between Q1 and Q2 2004
Bradford 29.9% 7.0
Birmingham 27.1% 13.8
Nottingham 25.0% -9.9
Bath 24.7% 27.8
Cardiff 23.3% 5.0
Derby 22.6% 24.7
Middlesbrough 22.0% 50.9
Manchester 21.4% -9.9
Leeds 20.8% 16.8
Leicester 20.2% 35.5
London 19.8% -9.1
Edinburgh 19.0% 15.8
Newcastle 16.0% 0.6
Norwich 15.9% -13.7
Bristol 15.8% -10.4
Glasgow 15.8% -8.2
Ipswich 15.8% -29.4
Liverpool 14.9% 3.2

AXA offers a free crime prevention toolkit designed to help businesses protect themselves against criminal activity. The AXA Business Security Blueprint provides best practice advice on everything from securing windows and doors to CCTV and fire suppression systems. It can be downloaded free of charge from www.axa4business.co.uk.