AIG Offers Personal Security Services
To Wealthy Clients
Wealth clearly has its benefits, but there are also pitfalls to having all those riches.
The obvious precaution is insurance coverage whenever and wherever possible. But insurers and their clients have discovered that coverage alone isnt always enough.
Thats what prompted American International Group in New York to begin AIG Private Client Group, a division of AIG Companies. Private Client offers homeowners the personal security services previously available to commercial accounts. The product is marketed through independent brokers.
“You can provide insurance for theft and break-in or a crisis like a kidnapping, but if you can prevent it from happening, thats far more valuable than indemnifying someone,” says Ross Buchmueller, president of AIG Private Client Group in New York. “Weve put together a half-dozen programs for some of the most prominent families in America.”
Security services, offered by Kroll Associates, complement AIG Private Client Group coverages. Their services include employee coverage and screening, which works as an adjunct to Private Clients workers compensation and employment practices liability for wealthy families employing domestic staff; and crisis management, which complements kidnap and ransom insurance, and provides insureds with customized pre-incident training, analysis and advice on kidnapping or extortion schemes.
Kroll also offers travel advisory services on issues ranging from terrorist activities to street crime.
Krolls goal is to help AIG clients “get smarter about their travel, or about the safety and security of their residence or vacation property,” says Ted Price, former deputy director of operations for the Central Intelligence Agency. Price is vice president, security services, and heads the crisis management division for Kroll in Washington.
“They might want to do some form of baseline security around their yacht or aircraft, or we could be available to provide consulting on how to protect the [personal computer] in their home against identity theft, or do a background check on domestics.”
Krolls services cover three areas:
Protection of personal security, which includes a number of services from basic driver training to highway safety training for teenagers and domestic staff.
Physical security of a residence, vacation property, plane or yacht, and travel safety and security briefings. And information security protection, which includes credit cards, cell phones and identity.
Basic investigations, including background checks for any household employees.
Price refers to the last services as “a basic piece of due diligence.”
The current high-priority threat to the wealthy is identity theft, he says. “The [Federal Bureau of Investigation] calls identity theft one of the fastest growing white-collar crimes in the nation,” he adds.
Although it can have long-lasting and devastating effects, identity theft can be averted. One common mistake people make is casually tossing out pre-approved credit card offers that arrive in the mail.
“Dont just throw them in the trash,” Price says. “All I have to do is take your trash and Ive got this absolute pre-approved Visa or Master Card in your name. What I do is sign it but I change the address. So not only do I use it up to its limits, but it bounces back to you and your credit history is ruined.”
Price recommends that mail such as this be shredded or ripped into small pieces.
Theft through a computer modem or DSL line is on the rise, he says. “You essentially are buying access to a service where your PC is online 24 hours a day and anyone can come right in the back door and take anything they want”–correspondence or financial information, he says. This situation is easy to remedy with a firewall that can be downloaded or inexpensively purchased, Price says.
An example of this type of theft made headlines recently with the arrest of a Brooklyn busboy, Abraham Abdallah, 32. By the time he was arrested he had victimized more than 200 of the nations wealthy by using the Web to gain access to brokerage, bank and credit card accounts. His career in crime began when he was 18, with credit card and bank fraud, authorities say.
Other crimes on the rise are committed by domestics and other personal employees such as nannies, cooks and drivers. “Most Americans dont do background checks,” he says.
One recent case involved a client who was ready to begin an investment deal with someone he had recently met. The client felt comfortable about the man, because of his admission of a prior bankruptcy. “The prospective partner in the initiative had said, Im sure youre going to do your homework and I want to let you know that I had a personal bankruptcy about eight years ago,” AIGs Buchmueller says.
The clients advisor, however, “didnt feel 100% certain” and requested a background check, he says.
“It cost $400 and was done in less than three days,” Buchmueller says. “And they found out that the person had three personal bankruptcies, leaving 11 creditors without their money.” This person was also charged with four misdemeanors, five felonies (including violent ones), “and he had served time, ” he says.
And when are the wealthy most vulnerable?
“When theyre traveling,” Price says. “They assume thatevery place is reasonably safe. So they dress up rather than dress down and they become somewhat of a target.”
is an associate editor of NU’s Property & Casualty/Risk & Benefits Management edition.
Reproduced from National Underwriter Life & Health/Financial Services Edition, June 11, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.