Companies are increasingly experiencing a sharp increase in business interruption losses, with average claims exceeding €850,000, around 70% higher than the average associated property damage claim, according to a new analysis from Allianz Commercial.
With the average property damage claim coming close to €500,000, the data demonstrates that the financial consequences of operational downtime can far exceed the cost of physical repairs.
Today, heightened reliance on technology, along with inflation, geopolitical instability, vulnerable supply chains, and centralised production, leaves businesses increasingly susceptible to escalating business interruption costs.
Allianz’s report analyses 7,888 business interruption insurance industry claims with a total value of approximately €6.74 billion, or US$7.82 billion, from January 1, 2021, to December 31, 2025.
Although claims frequency has remained relatively stable, the average value of claims increased by over 30% annually during the past two years.
Thomas Lillelund, CEO of Allianz Commercial, commented: “Business interruption and supply chain risk remains elevated and volatile. The operating environment is challenging with geopolitical tensions, trade fragmentation, cyber-related incidents, and growing dependency on technology such as artificial intelligence (AI).
“The scale of physical damage alone no longer determines the ultimate cost of a business interruption. Even a relatively contained incident can have consequences across production networks, customers and markets. Businesses therefore 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.”
Fire and explosion are the costliest cause of business interruption claims, the report highlighted, accounting for more than 40% of the total value analysed, equivalent to approximately €2.9 billion, or US$3.3 billion.
Fire was responsible for nine out of the ten costliest man-made business interruption events in the dataset and was the leading loss in markets like Germany, Singapore, the UK, and the US.
A single fire at a small manufacturing unit caused minor physical damage, but disrupted downstream operations, leading to a nine-figure group-wide loss.
Natural catastrophes are the second-costliest cause (34% of value) and the most frequent (26% of claims). Combined, fire, explosion, and natural catastrophes generated over 75% of total claim value.
Nonetheless, non-natural catastrophes remain the main driver of overall business interruption losses, representing 74% of claims and 66% of their total value, according to the report.
Moreover, some natural catastrophe claims take long to develop. Two years after September 2024’s Hurricane Helene, many business interruption claims remained unresolved, not due to coverage issues, but because affected companies had not yet fully recovered.
Supply chain delays, labor shortages, and volatile material costs can extend both recovery and settlement.
Concentrated production also amplifies losses. Industries often rely on a limited number of specialist sites, suppliers, or regions, allowing a single fire, cyber incident, or extreme weather event to cascade through global supply chains.
Notably, the two costliest non-natural catastrophe events analysed were fires at semiconductor factories.
The report also revealed that while ransomware remains the leading cyber-related cause of disruption, a growing share of loss activity is also being driven by cloud outages, software failures and incidents at third-party technology providers.
Over 48,000 cloud and software outages occurred in 2025 alone, highlighting businesses’ rising dependence on digital supply chains. Major attacks on software providers and logistics High-profile incidents, including attacks on software providers and logistics platforms, demonstrated how a single cyber event can disrupt thousands of organisations simultaneously.
Consequently, expanding dependence on cloud services, AI and third-party technology providers, makes cyber-related business interruption a more significant and complex source of loss.
“In today’s interconnected economy, preventing business interruption is no longer just about protecting individual sites. While companies have made progress in understanding their supply chain exposures, prevention remains the most effective form of risk management,” explains Alberto Barani, Business Interruption Group Leader, Risk Consulting at Allianz Commercial.
Adding: “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.”
