Security rating nudges insurers to reduce plant premiums

Insurers are set to cut premiums for plant owners who meet a new security rating system, writes Lauren MacGillivray.

Allianz has promised to reduce premiums for equipment owners who meet standards set by Thatcham, an insurance-backed research centre in Berkshire.

Other insurers are expected to follow suit.

Under the rating system, plant owners will need to obtain at least three out of five stars for a premium reduction.

To earn three stars, plant must be registered through Construction Equipment Security and Registration (Cesar), a system launched by the Metropolitan police in April 2007 to tag equipment.

The machines also require an electronic immobiliser and a set of keys unique to that vehicle.

Colin Wood, chief executive of the Construction Plant-hire Association, has called on insurers to introduce two premiums: one for policyholders who meet the three-star criteria and another for those who do not.

He also said insurers should set out exactly what discount they would give.

“Insurers have said they’d give discounts to people who register with Cesar, as well as get a unique key and an immobiliser – the big three stars. But how do we know what the discount is?

“It’s a bit like the double-glazing salesman coming to your home and saying, ‘Right, we’re going to fix your windows. And do you know what? I’m going to give you 50% off.’ And you say, ‘great.’ But then you think, hang on a minute, what’s the price in the first place?”

But Neil Clutterbuck, director of engineering at Allianz and chairman of the British Machinery Insurance Association, said insurers had already put together a “differentiated underwriting philosophy” for plant that met Thatcham’s recommendations.

He did not give figures.

“Does that mean premiums will go down? Yes, they will be lower for those plant hirers and users that are adopting these levels of theft protection,” said Clutterbuck.

Thatcham’s full five-star rating requires that machines also have special lockable doors and windows, and a tracking system.

Wood and Clutterbuck were speaking at the Construction Industry Theft Solutions conference, held on Monday at New Scotland Yard in London.

At the event, hosted by the Met’s plant and agricultural national intelligence unit and by Construction Industry Theft Solutions, a trade group, delegates heard that so far, 20,564 plant machines – or 26% of the UK market – have been tagged by Cesar.