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As I have always believed, a salvage buyer is one of the most
important components of the salvage disposal activity; I continue to
believe so while acting as a salvage manager as well. During last one
year, I had met more than 100 buyers and tried to understand their
mentality, their problems and as to why can’t they get any recognition
in the Insurance market. The reasons were many.
A salvage buyer, in our present system of salvage handling is
considered to be the least important person, considering that they are
available in plenty, anywhere and everywhere. But in my opinion, the
moment we start thinking like that, we start losing money. It should
be appreciated that Junk dealers may be available in plenty but not a
salvage buyer, a buyer who is interested in buying salvage because she
needs that commodity, is hard to find. Only because of the treatment
that a salvage buyer gets from Insurance Industry, genuine traders are
not interested in trading Insurance salvage. They are ready to deal in
goods lying with customs, railways etc. but not with Insurance
companies. Most of the Adjusters use salvage buyers just with an
intention to negotiate with Insured in the end and Insurers also
support them without recognizing the fact that without these buyers
its not possible to bridge the gap between Insured’s quote and fair
market value of salvage.
Let us examine the situation more closely.
1. Communication of buyer’s status to the Insured:
The importance of salvage buyer is never communicated to the Insured
in our present system. In case the buyer is visiting the Insured’s
place for inspecting the material without an adjuster accompanying
him, then the situation is not very friendly.
As a salvage manager, one should try to accompany the buyer during his
visit to inspect the goods, at a particular date and time and ensure
smooth inspection.
2. Retention by the Insured:
As per feedback I got during my conversations with salvage buyers, an
average salvage buyer travels not less than 4000 to 5000 kms per annum
for salvages that she never gets without any particular reason being
assigned. As salvage manager, one must understand that the cost that
she incurs in such cases is ultimately being recovered from the
pockets of Insurers only. The buyer just waits for one assignment to
click and then its party time for him.
As a salvage manager one needs to ensure that a level playing field is
created for all the parties who are interested in the salvage. Even if
Insured is interested in retaining the salvage, they should be made a
part of common platform and participate alongwith other buyers in
bidding for material. In no circumstances, should any buyer feel
discouraged or cheated, because otherwise one day she would like to
recover that lost money in some way or the other, as explained earlier
and also the Insurers would have to surrender to the Insured due to
lack of interested buyers.
3. Lack of transparency and fairness:
Almost all the buyers complained of lack of transparency and fairness
in salvage disposal. Especially due to the General method of random
negotiations that an adjuster/insurer follows to maximize the salvage
realization, buyers do not trust the Insurance Industry as a whole.
Because of lack of transparency and scientific system of salvage
disposal, buyers develop a sense of cheating and overall community is
affected.
As salvage manager one should ensure as far as possible to scrap with
old methods of salvage negotiations and adopt a scientific approach
through online auction or the next available fair and transparent mode
such as calling of sealed tenders etc.
4. Problems faced during lifting of material:
It is of importance that a salvage manager is present during salvage
lifting operation and manages the show.
Conclusion:
If we give good treatment to a salvage buyer and try to earn his trust
by providing for a fair and transparent system of salvage disposal, we
will be bettered of as an Adjuster, as an Insurer and as a society.
Although a buyer being a businessman will always be interested in
earning profit, but she will think twice before robbing Insurers by
earning say 100% profit out of the deal and instead might feel good by
earning say 20%. Insured, we all know is the best buyer for salvage,
but at the same time Insured needs to be treated as a normal buyer for
that commodity and needs to participate in the common bidding platform
and win the salvage transparently.
I personally feel that creating a good environment for salvage traders
is one of the social responsibilities of General Insurance Companies.
This might take some time, but atleast we need to make a start. |
