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UAA and MECON Insurance: Facing the challenge head on

UAA and MECON Insurance’s merger is set to provide clients with a one-stop solution for plant and machinery and construction insurance.

The plant and machinery and construction insurance industries are embracing current challenges, while remaining optimistic for the future. Stan Alexandropoulos UAA Group Chief Operating Officer and MECON Insurance Chief Executive Officer Glenn Ross explain.

Global impacts, enduring from the economic damage caused by COVID-19 lockdown, as well as the on-going conflict in Ukraine, continue to affect essential resources for Australia’s infrastructure and construction space.

Businesses ranging from sub-contractors to major infrastructure providers have been forced to re-evaluate how they operate. The insurance sector is no exception.

Stan Alexandropoulos, Underwriting Agencies of Australia (UAA) Group Chief Operating Officer, says the plant and machinery insurance sector is still working through these significant challenges. 

“Supply chain issues are a major challenge for everybody at the moment,” Alexandropoulos says. “And that actually translates back to insurance as well, because that’s causing what we call ‘claims inflation’. Every time we have a claim, it’s probably costing at least 30 per cent more than it was 12 months ago. Increased weather and catastrophe claims just add to the challenges.” 

MECON Insurance Chief Executive Officer Glenn Ross agrees. As he tells Roads & Infrastructure magazine, rising costs is a challenge shared between the construction, and plant and machinery insurance industries.

“There are commonalities between both industries, especially for challenges such as inflation. With unexpectedly high inflation, more than ever, we’re paying for today’s claims with yesterday’s dollars, and that’s never been truer than for late-reported workplace injury claims,” Ross says.

“We also have the COVID-19 runoff issues, such as materials delay, parts supply and repairs, all of these are being faced across the construction, and plant and machinery insurance industries.”

Lending a hand

UAA and MECON Insurance are amongst the leading providers of insurance in their given industries. Both companies recently agreed to merge, combining their expertise in the mobile plant and machinery, and construction insurance industries respectively. 

Now UAA and MECON Insurance provide insurance brokers with claims advice and technical knowledge, during what Ross refers to as “uncertain times”.

“Our clients challenges are our challenges,” Ross says. “Whether it be inflation, delays, fixed price contracts, or labour related problems. The consequence of most of these challenges are lengthy delays and cost over‑runs.”

“Delays in repairs and getting parts in can often leave equipment to deteriorate, like the seals hardening and then leaking for example. We’re often dealing with some form of consequential loss on the back of the original loss, the likes of which we haven’t seen in the past.”

Stan Alexandropoulos, Underwriting Agencies of Australia (UAA) Group Chief Operating Officer.
Stan Alexandropoulos, Underwriting Agencies of Australia (UAA) Group Chief Operating Officer.

Both UAA and MECON Insurance are working with insurance brokers to develop practical solutions to on-going impacts.

Alexandropoulos says UAA and MECON Insurance have “very comprehensive policy wordings, specifically designed to cover the exposures in our respective industries.”

“There’s already a number of policy enhancements within our policy wordings,” he says. “For instance, on the UAA plant and machinery policy, we spoke about inflation issues and increased downtime following a claim due to supply chain delays.”

“We have an appreciation clause within the policy wording already, which allows for a 25 per cent increase in the market value of an insured item within the period of insurance. So that’s an additional benefit that’s automatically in there. We also have financial protection covers and options within our policy that can reduce the impact of increased equipment downtime to the business.”

UAA and MECON Insurance are also providing additional education for clients, helping them to weather the storm of enduring impacts on the insurance market.


 

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“On the construction side, we’ve been sending out quarterly emails. Recently targeting fixed price contracts for residential buildings, helping to ensure that our clients are remaining vigilant. Our brokers will then pass that information onto their clients,” Ross says.

Alexandropoulos says that while UAA and MECON Insurance do not have direct influence over a lot of issues affecting the insurance industry, both companies are trying to play their part in giving back.

“We deal with our insureds via their insurance brokers who are effectively our customers. We’re really trying to push every single broker and our mutual clients at renewal time to go through their insurance schedules to make sure that they’re fully updated and their sums insureds have been reviewed,” he says.

“This is especially important, because prices are appreciating so quickly. One of the things we do is to have a look and compare it to the previous year to make sure that some adjustments have been made. If those adjustments haven’t been made, we try to educate the broker and our client on the importance of doing this in the current climate.”

MECON Insurance Chief Executive Officer Glenn Ross.
MECON Insurance Chief Executive Officer Glenn Ross.

Stronger together 

As Alexandropoulos explains, the merger between UAA and MECON Insurance this year will allow both businesses to further support clients and industry, as the insurance sector looks ahead to 2023.

He says the partnership is exemplified by the motto “two brands, one family”.

“We’re both experts and leaders in our industries and have been for a long time. The merger gives us more scale and resources to package up policies for clients,” Alexandropoulos says.

“Our clients can get the best of both worlds, as we can offer construction and plant machinery insurance expertise in the form of one industry powerhouse.”

Ross agrees, saying the two companies’ approach and specific industry knowledge is a differentiator in the market.

“We handle all claims ourselves, which differentiates us from other agencies. We’re visible and available with not only underwriting but also claims, and you don’t often get that with the large companies,” he says.

Optimism for the future 

Both Alexandropoulos and Ross remain optimistic for the future of their respective industries, despite current challenges.

“I think from a plant machinery perspective, it’s pretty exciting times,” Alexandropoulos says. “Compared to what we’re currently facing now the future certainly is bright. There’s certainly plenty of work out there for everybody at the moment, which is super positive.”

“With challenges such as inflation and supply chain issues we’ll hopefully feel some sense of normality soon. I think there’s a silver lining, particularly when it comes to the development of technology in the mobile plant and equipment sector and the industries they work in.”

For Ross, it’s the dynamic and ever-changing nature of the industry which excites him about the future of the sector.

“One thing that’s always excited me about the construction industry is that it’s constantly evolving and adapting. You never repeat the same thing all day, every day. Whether it’s design, materials, or legislation. We’ve seen a raft of changes,” he says.

Both say UAA and MECON Insurance will be looking to continue to expand their capabilities and policy wordings of both companies leading into 2023 and beyond.  

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