For Richer and Poorer
CARRIERS AND BROKERS MUST JOIN FORCES TO KEEP HIGH-NET-WORTH
COVERAGE FROM BECOMING A COMMODITY
Superstorm Sandy may have provided the most persuasive argument yet for the benefits of insurance coverage designed specifically for the owners of high-value homes. Those who bought coverage from specialists in the high-net-worth niche—including ACE Private Risk Services,
AIG Private Client Group, Chubb, Fireman’s Fund and
PURE—benefited from quicker service for tree removal, a broader interpretation of coverage for sewer and
drain back-up, greater flexibility with flood and excess
flood solutions and full replacement cost.
More more carriers and brokers specialize in this
niche in the U.S., but the aggregate homeowners’ market share of the five high-net-worth specialist carriers
decreased for the fifth consecutive year in 2012.
A RISING TIDE
The loss of market share among the high-net-worth
carriers is particularly concerning considering the
demographic trends that should be supercharging
growth in this segment. The inflation-adjusted net
worth of the wealthiest 1% of Americans has steadily
increased and research suggests that a massive pro-
portion of all additional net income in this country
has been realized by the wealthiest Americans.
During the past decade or so, the largest personal
insurance carriers in the U.S. have contributed to the
greatest spike in advertising spending in any marketing category. The trend seems stronger than ever. According to Kantar Media, insurers spent roughly $1.3
billion in advertising in the second quarter of 2013
alone, up 12.9% during the same period a year earlier.
And while the growth in insurance advertising
started as a call for consumers to save money, the
advertising has clearly shifted to turf that specialist
high-net-worth providers should own: professional
agents who complete thorough due diligence (“
discount double-check”), policy language that is broad