Acquis, the specialist provider of equipment protection programmes to the European asset finance market, reports that it has handled a record level of SME flood related claims in the UK. Over the past two months, one in every four claims submitted to Acquis was caused by flood. Claim volumes increased by 113% over last year, as extensive flooding left many businesses in Britain fighting for survival.
Financed equipment that was lost or damaged completely due to flooding ranged from IT and office equipment to automotive/garage machinery, forklift trucks, health and beauty equipment, epos systems and vending machines. Acquis settled the majority of all flood claims by providing replacement equipment on a new for old, “like for like” basis, and supplied by the original equipment supplier.
The remaining claims were settled by paying off the outstanding lease rentals as the lessee was not in a position to utilise a replacement asset due to extensive flood damage to their premises. Commenting on their recent flood claims experience, Acquis director Andrew Hobby (pictured above) said: “The impact of flooding on any business can be devastating, and it is vital for SMEs to have comprehensive insurance covering flood risk that is becoming an increasingly common event. “We are seeing reports of businesses affected by flooding being unable to source insurance cover, or facing huge increases in compulsory excess levels. This has a direct risk implication for funders whose financed assets will no longer be adequately covered. Funders need to mitigate this risk, and Acquis’s products are designed to provide comprehensive cover to funders who cannot rely on their customers’ insurance to protect their assets”. Acquis underwrites its financed equipment protection products on a portfolio approach, based entirely on asset type and deal size. Customer location, building type, flood vulnerability and previous claims history are not taken into account in accepting new business risk or determining premiums. All policies have zero excess and no minimum claim amounts.
Jeremy Miles, Acquis’s Head of Operations, highlighted one flood claim where Acquis had protected the funder and customer from loss. He said: “The customer had just started trading as a motor repair garage and financed an MOT testing kit with a value of £22,000. The customer’s premises were five metres from the River Aire in Leeds and the area was hit by torrential rainfall from Storm Eva, with the river reaching its highest ever recorded level. “The premises were severely flooded, and the financed equipment submerged under five feet of water, silt and sewage, was completely written off. At this point the lease was less than a week old. The customer had no commercial contents insurance but the funder had insured the asset with Acquis’s Financed Equipment Protection Programme. “We paid off the outstanding finance obligation which was a great relief to both the customer and the funder.” Last year’s Financial Conduct Authority (FCA) review of SME insurance claims highlighted a significant degree of underinsurance by SMEs and also reported the problems faced by SME customers in dealing with the inefficient claims processes of insurance providers. The FCA’s conclusion was “an overall poor perception by SMEs of the claims experience”.
In contrast, one of Acquis’s key objectives is to provide an efficient, customer friendly claims procedure. As stated by Andrew Hobby: “We operate a straightforward telephone service for all customers reporting loss or damage to equipment, irrespective of the value of the claim. Our goal has always been to provide customers with a painless and easy loss reporting procedure. “Insurance organisations get tarnished by offering a poor service when customers need them the most. We take the complexity and hassle out of an upsetting situation for the customer and focus our effort on delivering a quick, fair and efficient resolution for the customer and the funder.” Miles added: “The quality and suitability of our products has resulted in 100% of flood claims being fully settled. It is essential that the quality of our service matches the quality of the product and we aim to authorise each claim as quickly and efficiently as possible. “The majority of claims are authorised within five working days and the quality of our customer service is backed up by 96% of our customers saying they would recommend Acquis. »
The full Asset Finance International article can be found here.