Wealthy Clients Need Expert Insurance Advice: Here's How to Help

When it comes to property and casualty insurance for wealthy individuals, being in the good hands of an insurance agent is not as simple as choosing one that has a familiar brand name above the door. As wealth grows, the breadth and complexity of risks also tend to increase. Properly addressing these risks often requires an agent with specialized expertise and access to insurance products and services from the few companies that focus on serving high-net-worth families or individuals.

Unfortunately, most affluent and high-net-worth clients have not sought out such an agent. At least 70% may remain with agents who have placed them with carriers offering standard homeowners, auto, and other policies that are not structured to address the unique property and liability risks confronting well-to-do individuals. Wealth managers can quickly determine if their clients are likely underserved by asking “10 Questions to Ask Affluent Clients About Insurance.”The issue then becomes: how can wealth managers be confident in referring underserved clients to a qualified agent or broker. Here are key characteristics to seek:

• It almost goes without saying: the agent should be properly licensed as a property and casualty insurance agent by the state authorities. While not necessary, other industry designations that show additional training include ARM, CRM, CIC, and CPCU.
• The agent is independent in the sense that he or she represents a variety of carriers, including at least one that offers customized coverage and services for high-net-worth clients. By representing a variety of carriers, the agent can better match the customer to the appropriate company.
• The agent or broker works in an agency or brokerage that has a team dedicated to personal property and casualty insurance, and is not simply serving individuals as a side activity to commercial insurance. Furthermore, there should be some assurance that the operation has a solid base of affluent clients. The agency or brokerage may even have a team that specializes in serving only affluent and high net worth clients.
• The agent or broker has a well-defined process for reviewing the unique risks faced by the wealthy. The review should cover physical assets—homes, cars, recreational vehicles, watercraft, and especially high-value collections—and financial assets, which can be exposed to liability risks. Additionally, the client’s occupation, activities, and family status can reveal exposures to risk, such as volunteering on a not-for-profit board, managing a family trust, or employing domestic staff. Finally, the review should be updated regularly. This may range from a full review every year to every three years, with less intensive updates in the interim years.

One practical idea to find these agents would be to visit the websites of the carriers such as ACE Private Risk Services, which specialize in serving affluent and high net worth clients. They all have search tools that allow you to identify a local agent who represents them.