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ais in aun insu-anc mak say i plicynin lvls main sng,dspi cnmy’s impac. “W’n sing a mass xdus u clinbas,” says Jim isk, U.S. makingmanag a Cubb Psnal Insu-anc. “N a w sing n pa cuny suing ws anan.”iman’s und as ad a similaxpinc. “W’v ad an xmlygd nwal nin, s alls m a cusms a cauiusabu mving away m spcial-izd svics,” says Dn Sss, vicpsidn and sgmn lad ign w and aun plicylds.“W’ vn sing signifcan salsincass in gins lik txas, wicsms b gwing m an sas.”inding nw pspcs is a cal-lng, wv. “ral sa sals adwn 6% in Gnwic, Cnn., and15% in Palm Bac, la.,” ns Jyhuian, sni vic psidn andnainal sals manag in pivaclin gup a Cais. “ou nwbusinss is smwa ansacin-i-nd, maning a wn smnbuys a nw m i’s an insuanc-slling ppuniy. obviusly, sppuniis a a bi lss in cu-n cnmy.”
against crimes like kidnap and ransom,extortion and employment practicesliabilities.
Carriers Capitalize DespiteDownturn
Absorbing the property-casualty riskso these wealthy insureds is a handul o carriers specializing in the market, anddespite the eects o the recession, compe-tition is alive and well in the sector.ACE Private Risk Services most recently joined the ranks in January 2008 ateracquiring the high net worth personallines insurance business o The AtlanticCompanies. “The economy has made peopleexamine their spend(ing) or insurance andthe value they’re getting, which we seeas a plus or us as a new market entrant,”says Wetteland.ACE is now competing against veteransin the business—Chubb Personal Insur-ance, Fireman’s Fund, Travelers and ChartisPrivate Client Group (American Interna-tional Group’s new name or its p-c andgeneral insurance business). The insurersoer packages o insurance policies andendorsements addressing the unique risktranser needs o high net worth individu-als, with products like Masterpiece (Chubb)and Platinum Portolio (ACE). Since thewealthy can be cleaved into sub-categorieslike “new money” or “ultra-auent,” thepolicies within the packages are custom-tailored to each insured’s particular profle.There are subtle dierences in theoerings rom the insurers, rom cover-age limits to policy cost, but most tend toprovide similar coverages and services. Freebackground screening o new hires, likenannies and fnancial advisers, is oeredby most o the carriers.(ACE and Fireman’sFund actually use the same internationalsecurity frm—The Guidry Group.) Sincethe insurers absorb the risk o a nanny orfnancial adviser causing fnancial loss, thebackground screening makes sense. “Whilemost fnancial advisers are men and womeno high skill, integrity and unimpeachablecharacter, recent scams like (Bernie) Mad-o give pause or consideration among thewealthy, whose status invites greater expo-sure to such risks,” explains Wetteland.He explains the penny pinching thisway: “Many auent people have about75% o their total wealth wrapped up intheir investment portolios, which isn’tinsurable. The other 25%, represented bytheir homes, boats, cars and property, isinsurable. With portolios worth perhaps40% less than two years ago, more ocusis being given the insurable portion. Andthat’s where we come in.”Other agents servicing high net worthindividuals report similar fndings. “We’refelding a lot o calls rom clients abouttheir renewal policies, looking or ways toamend coverages or reduce the premium,more so than I’ve seen in the past,” saysBrian Bettini, president o San Raael,Cali.-based Allen, Bettini & Carter.
Recession Breeds New Risks
While the rich are still rich, they’re nowhesitant to pay more or some things.Santana, Bettini and Glunt acknowledgethat they are working closer with clients tostreamline insurance costs, while counsel-ing wealthy clients on how to decrease andmitigate new risks caused by the reces-sion. “Wealthy people, just like the rest o us, have lost signifcant amounts in theirinvestment portolios and are suddenlyvery concerned about protecting the assetsthey have,” says Claudia Wetteland, seniorvice president o ACE Private Risk Services.“In a downturn they become a target orlawsuits. Even i the suits are unsubstanti-ated, they still need proper coverage.”When people lose their jobs, go througha home oreclosure and/or suer devastat-ing investment losses, they’re more apt tocommit crimes. For example, a disgruntlednanny, gardener or chaueur let go orfnancial reasons might fnd cause to suea ormer employer or wrongul termina-tion, discrimination or sexual harassment.More ethically-minded people in thesedifcult times also create risks or theauent. “An average income earner mightreduce his or her auto liability limits,”says Santana. “We’re advising our clientsto increase their uninsured/underinsuredmotorists coverage.”She’s also suggesting broader liabilityprotection at higher limits, to protect