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How hard is your insurance working for you?

Insurance, like most other aspects of the crane industry, is based on traditional business values. It makes a difference when you have a proactive and experienced insurance broker working on your behalf with the right insurance underwriter.

Insurance, like most other aspects of the crane industry, is based on traditional business values. It makes a difference when you have a proactive and experienced insurance broker working on your behalf with the right insurance underwriter.

As a crane owner, you will understand the need for various levels of cover, but do you have an insurance broker that’s focussed on responsiveness and treats every claim as if it were their own? And does your underwriter really understand the nuances of the crane industry, offering you right the levels of cover in the right areas?

Cranes and Lifting spoke to Sam Sofi, managing director, Trans-West Insurance Brokers and George Grasso chief services officer, UAA, to discuss these and other issues relating to the insurance of cranes.

Trans West Insurance Brokers was founded in 1975 by Sam Sofi who remains the Managing Director and sole shareholder. Sofi was raised in a family of farmers and primary producers and grew up amongst machinery and learning how to fix it on your own. He knows insurance; he started calling door to door with the AMP selling life insurance, but his upbringing was to shape his approach to the insurance industry.

“If the machinery failed, there was none of this we’ll call the mechanic up the road, you had to fix it yourself. As a young boy, I learnt to weld, you learn everything you need to do to get the job done and if my father promised a neighbour that his tractor would be fixed and on the paddock at 6am the next morning that tractor was on the paddock. What happened in the background to make this happen might have been another story? To a large extent, my father’s integrity and honour has flowed throughout our family, if we promise something you do your very best to deliver,” said Sofi.

This approach has help set Sofi and Trans West apart from other insurance brokers.

“We have found a lot of the issues relate to brokers over promising and under delivering and that can be a real issue. It’s relatively easy for me in the ‘crane world’ because I understand the machinery, I understand that when you have a million dollar plus piece of gear driving out of your yard you are hoping it comes back later that day intact. I also understand what the impact of a claim does to a business. The larger the business the less impact it has, but when you are a small operation with four or five units, one unit can be more that 20 per cent of your business. A specific crane can be generating 40 per cent of your income with the other pieces of gear are playing a supporting role. You have to make sure that crane has the right level of cover,” he said.

Sofi speaks about his relationship with UAA.

“There are a lot of the positives about UAA. They have an experienced and
pro-active team that understands cranes. But like all relationships there are ups and downs. There are times when UAA has responded brilliantly and times where it’s been difficult for them to deliver the required level of service, that’s when I call George and let him know we’re not getting the responses we need. He’ll say, ‘we know and we’re onto it’ and the issue gets resolved. Our association with UAA is a co-partnership, and I treat it that way because we have a very large book of cranes and we need to understand where they are at as an underwriter. Like every underwriter, they have masters, it’s called QBE in this case as UAA’s security. I need to understand what George and his team are dealing with so I can deliver the promise to my client,” he said.

Accountability in business relationships is a key issue for Sofi.

“Many years ago, I received a phone call from Gerhard Baden, from Baden Services and we started a relationship regarding crane repair. At the time, I had a couple of cranes companies and we’d experienced some major losses with them, but Gerhard performed and with his typical German attitude of we’ll fix it, I’ll get that right and every crane that came out of his workshop looked as good as the day it was bought. We went on to develop a tripartite relationship involving Gerhard, myself and loss adjuster Paul Kiem. There are good loss adjusters, but Paul is one of the best adjusters that you can work with,” he said.

“Paul is a CICA Crane Safe assessor and he also works exclusively with UAA as a crane expert and loss adjuster. Over the years, we’d had tricky claims which were problematic even within the policy wording. You need a loss adjuster who is prepared to work with you and the client and not to the detriment of the insurer, because it’s not about that. We had a crane with a slew ring which had to have some work done on it. The slew ring wasn’t damaged but all the bolts around the slew ring needed replacing. Technically speaking, UAA didn’t have to pay for that but on Paul’s recommendation they did and did it happily. The cost of the bolts was around $10K on that part of the claim and that gesture sustained that client to this day and that’s been something like 15 years,” said Sofi.

According to Grasso, UAA will look favourably on claims if clients do the right thing.

“There’s a quote from Rupert Murdoch that I use, “I don’t mind if you lose some of my money but if you lose my reputation, I’ll be ruthless,” and we take the same approach with our clients. If you’ve got a long-term client who is reputable and paying $250,000 in premiums per annum and they’re not frequent claimants and using insurance for maintenance, don’t squabble over a few thousand dollars,” said Grasso.

“In our opinion, you’re better off having the conversation with the client and the broker and saying technically our obligation is not really there to cover this particular component, our obligation is only related to the claim but if it’s a bit grey we don’t want to squabble either, as Sam rightly points out, some circumstances are not black and white and we always look at claims from a commercial perspective,” he said.

“The client then knows that you know what you are talking about. We’re not an insurance company that accepts the wool puuled over our eyes, the broker and client understand and respect that as well.  That way, the broker can have the one on one conversation with the client, the client knows we respect them and in return they have respect for the Broker and Insurer. As Sam demonstrated, the client with the bolts has stuck with Trans West and UAA for 15 years because of the levels of respect and understanding,” said Grasso.

Sofi explains how insurance, like most other aspects of the crane industry, is based on traditional business values.

“Loyalty in business is honoured less and less but in UAA’s case I think it’s appreciated. We deal with UAA because we have flexibility in our relationship, we know the parameters within which we can and can’t operate and UAA know they can trust my word. If I’ve made a mistake, I’ll put my hand up and say I’ve made the mistake and I’ll get on the phone to George and explain that our intent was always there and these are the reasons why, can you do something? My staff know that if they’ve made a mistake, they are to tell me immediately and not try to hide it. You have to live with your integrity,” said Sofi.

“Trust and integrity is paramount in all business relationships, particuarly in our business,’ said Grasso.

“As Sam has said, there are other underwriters in the market but UAA is the pioneer in mobile plant and machinery with a product that has been developed since 1972, and the competitors have looked at our product and literally copied and pasted the wording from our contracts. We realise nobody re-invents the wheel and we are quite flattered that our competitors hold our policy in such high regard. As Sam highlighted, it’s not just about the wording, it is about the services provided from the underwriting perspective, the support of our business development managers and underwriters offer and their ability for them to do a deal. They’re not just coffee drinkers out there talking to brokers with products to sell, they actually have underwriting capabilities and authority,” said Grasso.

“Our claims services team means our claims are actually serviced here in Australia. Competitors have a very limited scope to manage claims in some cases up to $50,000 or $100,000 at maximum. Anything greater and it needs to go to their security which, in most cases, is based in London. At UAA, we understand how the industry operates and we work hard to support the industry as much as we can. This is a fundamental difference between UAA and the other competitive underwriters,” he said.

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