Put your hands up: this is the insurance industry

News that a specialty police unit to tackle plant theft will be launched this week is proof of the power the insurance industry can wield when it bands together.

For years plant theft and fraud has cost insurers millions of pounds. It is estimated by the Metropolitan police to cost the UK around £600m each year.

The criminals involved in the plant theft are usually tied to organized crime rings that ship the stolen equipment out of the UK to places such as the Middle East and Africa.

It’s been feared by police investigators that the money made from the plant theft operations is being used to fund more violent crimes including terrorism.

And yet, the Met could not secure the public funding necessary to tackle the problem head on.

A spokeswoman for the Met told Insurance Times last summer that the police want to be able to afford specialty services but must work within its budget.

She said: “In some cases, we must seek sponsorship.”

So certain insurers began discussions with the Met’s stolen vehicles unit and forged a deal that they would sponsor a police unit to focus on plant theft if they could get enough donors.

This week it was revealed that a consortium of insurers including Allianz, Zurich, Norwich Union, RSA and broker HSB Haughton had contributed enough funding to launch the unit.

Neil Clutterbuck, secretary of the British Machinists Insurance Association, said: “Each company has made a significant contribution.”

Andy Penny, construction and engineering underwriting manager at Zurich said: "With the industry providing funding for a specialist unit, the police will be able to focus their attention on the major criminals involved in plant theft and also assist police and customs officers in identifying stolen items. This should lead to an increase in prosecutions and will make plant theft a more difficult target for potential criminals."

Over the next two years, the companies have pledged a total of £250,000. After the two years, the consortium will re-examine its commitment and determine whether to renew its sponsorship.

Penny added: "'t is our opinion that we should more than recoup our outlay in terms of the Police unit recovering stolen equipment, plus an overall reduction in levels of plant theft, and therefore this makes commercial sense for Zurich."

The hope is that the unit will achieve success and become self-sufficient.

The fact that insurers have to fund a police unit to combat theft is unfortunate. But the reality is, if it weren’t for the sponsorship, the thieves would continue to dog investigators and cost the industry hundreds of millions of pounds.

Private sponsorship of police units is not entirely unique to the Met. Banks have funded units to tackle credit card fraud and the police are still seeking sponsorship for an e-crime’s unit.

Clutterbuck said the hope is the new unit will increase the amount of vehicles recovered from 10% to 60%.

If that’s the case, it could be well worth the investment for insurers.