The Underwriter's Role In Working With The Affluent

The Underwriter’s Role In Working With The Affluent

To The Editor:

I just read Richard Harris’s article “Working with the Ultra-Affluent” in the April 15 issue and I take it that Harris is more a financial advisor than an insurance agent. I liked his approach on how to obtain the required information from wealthy clients, which will always be case-specific.

I’ve underwritten many wealthy insureds, and in the process discovered–from inspection reports and financial statements–that the agent didn’t take into account that the client also owned several other businesses worth millions aside from the “main” enterprise–the reason for the coverage.

These agents did not do a full “discovery”–as they say in law circles–of their clients’ assets, and in the process, lost a chance to sell a higher coverage, which the person actually needed.

Harris talks about “network” of contacts, and it is absolutely indispensable that agents and brokers consult certain cases with an experienced underwriter in order to know what to expect, or whether the case makes sense from a financial point of view–in other words, that there’s a “need” for the coverge. You can write the largest case ever, but if the person has enough coverage already, additional insurance may not be approved.

I once had this case with 2 execs wanting keyman insurance for $2 million each. I reviewed all the financial and medical info and sent the case to our reinsurer because everything seemed fine.

Turns out there were other executives from the same company asking for keyman insurance as well, for $2 million also, but I wasn’t aware of that!

The agent didn’t call me or anyone else to let us know he was sending a group for keyman insurance. If he had, I’d have asked him, among other things: Amount of coverage required? Line of business? Net worth of business? Average yearly income of the keymen? Job function?