Equipment Finance News

Acquis Insurance records 43% insurance claim boost despite industry concerns about UK businesses lacking cover

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Acquis Insurance Management has reported a 43% increase in insurance claims paid in 2016, compared to the previous year.

However, Acquis’ director, Nick Leader believes that many SMEs and mid-cap companies continue to live with the risk of being underinsured. The UK Financial Conduct Authority (FCA) has previously identified underinsurance by businesses as a major concern. This has also been acknowledged by the insurance market as a current industry-wide problem, with policy claims made by underinsured customers being scaled down in line with the degree of underinsurance.

Leader said: “This adverse effect on claims is magnified with larger claims, but underinsurance does not apply to our programmes as each financed asset is individually covered for its full replacement value”.

The risk implication of customers being underinsured is increasingly being recognised by funders, and in Leader’s view “funders who rely on their customers’ insurance cover cannot be certain that their financed assets will be adequately protected over the term of their finance agreements”.

Commenting on last year’s record level of claims Nick Leader added: “The increase in claims received in 2016 was largely a result of the growth in underwriting volumes over previous years, which has seen exposure grow to over £1.3 billion”.

Acquis is currently working with 40 funders, placing cover or tracking insurance on over 340,000 lease contracts in 12 countries.

Claims in 2016 ranged in size from £48 for a mobile phone repair to £65,000 for a backhoe loader replacement.

Leader said: “Acquis partners with a diverse range of finance companies, from small independent lessors to captive finance companies and international banks. As we continue to expand, both in terms of geography and client base, we have found ourselves managing insurance for an ever widening range of assets.

“Some 10-years ago, post-sale insurance was heavily weighted towards office equipment such as photocopiers, computers and telecoms.  Today we have a diverse portfolio including construction, material handling, road building and agricultural equipment”.

Claims for assets costing less than £2,500 accounted for 72% of all claims settled in 2016.

Commenting on the changing attitudes of funders towards financed asset insurance, Leader stressed:  “It’s no longer only about fee income. Portfolio risk mitigation and outsourcing of insurance tracking, together with the ability to offer their customers a best in class product and claims service, are today replacing fee income as the key drivers of why funders are deciding to partner with Acquis.”