What types of esoteric assets have RVI Underwriters considered?

For the most part as an RVI Underwriter, the submissions you receive are for the “standard” types of asset such as Aircraft, Ships, Automobiles and Real Estate.

Every now and again you are asked to consider more esoteric assets. The Underlying philosophy of writing RVI is – will there be a secondary market if we need to take the asset back in the event of a claim and will there be plenty of useful life left in the asset? Can we get comfortable with future valuations (performed by a recognised appraiser)? If yes, then let’s consider the transaction subject to satisfactory return conditions and remarketing period!

One Insurer was asked about 20 years ago if they could write RVI on a winery. After investigation it was considered a worthy asset for an RVI policy based on the location (Australia) and the grapes.  This enabled the transaction to get funded and I believe it is a very successful winery today.

Other assets that have been considered (and some have been written!) include Beer barrels, Milk processing plants, Parking barriers, Containers, Aircraft simulators, Navy Vessels, Local Authority Equipment (such as double glazing, wheelie bins etc.) Medical Equipment, Robotic Equipment, Wind Turbines and many other types of assets.

More often than not, RVI is purchased by the funder to give a floor to the transaction allowing the funding to go ahead.

In essence almost any asset with a proven secondary market and longevity can be considered for RVI.

 RVI is designed mainly for Tangible Assets that have a known secondary market such as Transportation (Aircraft, Ships, Trains, Cars, Buses and Trucks), Equipment such as Yellow Goods (diggers, tractors, forklifts etc.), Real Estate.  Renewable energy assets can also be considered.

This post was authored by Nick Hester, Partner, Asset RVI.  Nick has been providing Residual Value Insurance solutions for nearly 30 years.