Acquis Insurance Management Ltd reports a 43% increase in insurance claims paid in 2016, compared to the previous year.
Commenting on last year’s record level of claims, Acquis Director, Nick Leader, said “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 €1.6 billion”.
Acquis is currently working with over 40 funders, placing cover or tracking insurance on over 340,000 lease contracts across 12 countries.
Claims in 2016 ranged in size from €48.48 for a mobile phone repair to €78,200 for a backhoe loader replacement. Leader commented “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”.
“Ten years ago, the Post Sale insurance product was heavily weighted towards office equipment such as photocopiers, computers and telecoms. Now we have a large, diverse and growing 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. According to Leader “our products are designed to be superior to standard business contents insurance policies, which often have significant excesses that may not cover smaller claims”.
The majority of assets covered by Acquis’ FEP programmes are insured on a “new for old” basis, with no excess, throughout the whole term of the finance agreement.
In addition to their policy excess that could impact small claims, Leader also believes that many SMEs and mid cap businesses continue to live with the risk of being underinsured. Underinsurance by businesses has been identified as a major concern by the FCA and acknowledged as an industry wide problem by the insurance market. The adverse effect for customers is magnified with larger claims as the amounts paid out are scaled down in line with the degree of underinsurance, but as Leader confirms “underinsurance does not apply to our programmes as each financed asset is individually covered for its full replacement value”.
The risk consequences of customers being underinsured are 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”.
Portfolio risk mitigation and outsourcing of insurance tracking, together with the ability to offer their customers a best in class product and service, are today replacing fee income as the key drivers of why funders are deciding to partner with Acquis.