Residual Value Insurance

It covers the difference between the actual liquidated value of property returned to the insured lessor and the expected value of the property specified in the policy.

Residual Value Insurance helps companies by managing asset value risk by guaranteeing that if a properly maintained core asset cannot be sold for at least a specified sum (the RVI Sum Insured) at a future point of time the policy will respond by either buying the asset for the RVI Sum Insured or paying the gap between the RVI Sum Insured and the best sale price that can be achieved.

It is an enormously flexible tool with benefits which range from asset risk mitigation to complex financial objectives related to accounting treatment, capital optimization and cashflow improvement.

It also enables a lessor to offer operating lease solutions to their clients where they are not willing or unable to take any or all of the asset part of the transaction. Instead, the lessor buys RVI which underwrites this risk.

Asset types considered:

• Commercial Vessels;
• Helicopters;
• Fixed Wing Aircraft;
• Heavy Plant and Equipment (Yellow Goods/Construction Equipment/Mining Equipment);
• Rolling Stock - Regional Passenger Trains and Freight Cars;
• Other transportation such as Trams, Buses, Coaches and Trucks;
• Certain types of commercial property in established Financial Centers (Hubs).