A burning issue

With acts of arson burning a bigger hole in insurers' pockets every year, an effective strategy for tackling the issue is vital. But whether action will come from the government or insurers, this particular fire is not likely to be put out any time soon, says Kirstie Redford

With ongoing investigations to find out whether the recent Cutty Sark fire was deliberate, the devastating effects of arson have once again been highlighted. Along with a new drive by the government to cut the level of fire-related youth crimes, the insurance industry is also taking steps to mitigate risks and therefore reduce arson-related claims.

It is believed that around 40% of arson attacks are committed by under-18s, a statistic that the latest government action plan, announced by Fire Minister Angela Smith in February, aims to tackle.

The programme, which is already up and running, involves the Fire and Rescue Service working with Sure Start family centres to give support to families in disadvantaged areas. It provides education to deter potential arsonists, as well as intervention training to steer young people, who may already be involved in arson attacks, away from such activities.

Although the initiative did not involve specific engagement with the insurance industry, Malcolm Tarling, spokesman for the Association of British Insurers, says the organisation has welcomed it. "Arson accounts for half of what insurers pay out in fire damage claims each year. Insurers are constantly looking at ways to better protect themselves against this crime. Educating young people to prevent arson crime has to be a positive step."

Axa's head of customer risk management, Doug Barnett, also welcomed the scheme, saying that education is vital, especially in high-risk locations. He explains: "Our latest figures show that Glasgow is the arson hotspot in the UK. Arson rates tend to be higher in poorer communities where there are more social issues. There is a real need to target these areas and educate children. Young arsonists often don't realise how their actions are harming their own community."

Arson hotspots

Commercial and public properties, especially schools, are the most common targets. Attacks usually take place out of hours, so there is an assumption that properties will be empty. However, malicious attacks on residential properties also happen.

Being at the sharp end of claims, Andrew Dear, director of technical services at loss adjusters AMG, says he is horrified at the number of arson attacks he sees. "It has almost become acceptable to have petrol poured through your letter box because someone doesn't like you; we get these types of claims every month, if not every week," he says.

Mr Dear believes more legislation is needed to deter offenders. "Although education is definitely key, stricter sentencing for arson would be useful."

He also suggests that a national television campaign, in the same vein as drink-driving adverts, could be effective. "The problem, as ever, is who would take responsibility for it, and who would fund it - the government or insurers?"

Risk assessment

The insurance industry is making moves to manage arson risk more effectively. Mr Barnett says that, over the last few years, Axa has started being much more proactive in assessing arson claims. "We now send a surveyor out to do a separate arson assessment for each claim," he points out.

Royal and Sun Alliance's property development manager, Alan Gairns, explains that its underwriters now use a geographical risk map to assess arson risks. "We also have surveyors nationwide who give advice on risk assessment. It's important to build knowledge of how and where arson takes place to secure the best terms," he says.

Norwich Union's property risk manager, Allister Smith, says that NU also carries out arson assessment as part of property surveys. "This often highlights a number of issues, such as inappropriate storage of waste materials and skips at the side of buildings. At night, in isolated locations such as industrial estates, fires often start when rubbish is set alight and then spread into the building," he adds.

NU has also been working with the Insurers' Fire Research Strategy Funding Scheme, which conducts research on behalf of UK insurers into fire risk mitigation. It publishes guides and recommendations on arson prevention and, according to Mr Smith, it is also currently working on a best practice guide for small and medium-sized business owners.

Prevention better than cure

In addition, NU, like many other insurers, is heavily involved with the Arson Prevention Bureau. The APB is headed by ABI's Jane Milne, and was established in 1991 to raise awareness of arson. Since then, it has become an active partner in the Arson Control Forum, set up by government in 2001 to lead the fight against arson crime.

The APB helps create dialogue between insurers, the government and other interested parties. It also produces guidance for best practice in arson prevention and investigation, commissions arson-related research, and works within communities to raise awareness of arson prevention.

Previous APB achievements include jointly funding the first Arson Task Force in the UK and the pilot of Arson Combated Together. The first scheme brought together the fire service, the police and other interested parties to tackle arson, which has led to a growing number of fire authorities having dedicated Arson Task Forces.

Arson Combated Together is a teaching resource developed by the APB and Zurich Municipal aimed at tackling fire-setting behaviour in schools. Zurich Municipal has now rolled out the programme nationwide.

"After an initial pilot in 2003, we have now extended it to every brigade in the UK," says Larry Stokes, underwriting manager at Zurich Municipal and chair of the APB's Schools Working Group. "We have since been lobbying the government to get sprinklers fitted in schools to tackle the effects of arson. This recently resulted in a commitment to fit sprinklers in all but a few low-risk schools going forward. So lobbying is paying off."

Whether the action plan announced by Angela Smith will deter young arsonists remains to be seen. But as long as youth-related arson continues to come with a heavy price tag for insurers, the incentive to keep lobbying for more help to tackle the issue is unlikely to wane.


- 40% of arson offenders are believed to be aged between 10 and 17

- Arson accounts for over half of total insured losses

- British business insured fire losses are £700m per year

- Every week, 20 schools suffer an arson attack, costing insurers £100m a year

- Car arson costs insurers around £77m a year

Source: Arson Prevention Bureau.

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