Today’s high-net-worth clients have continued to gather assets during the pandemic — in some cases, at an even faster pace than usual. Rising home values, a rebounding art and collections market, and “red hot” auto sales all demonstrate this trend, according to Heather Posner, Managing Director, Associate Vice President, Director, Private Client, Burns & Wilcox, Cleveland, Ohio.
This has increased the need for high-value insurance solutions, she said, but it comes at a time when the market for products like High-Value Homeowners Insurance and Excess Liability Insurance is hardening after at least 12 years of a softer market.
“Folks are sort of surprised when they are seeing their premiums increase the way that they are, or when they have difficulty buying coverage or getting the limits they desire,” Posner explained during a webinar hosted by Burns & Wilcox about high-value insurance solutions.
Affluent clients such as athletes and entertainers may have increased their visibility on social media over the past year and a half, when many of them had more free time amid pandemic-related shutdowns. This added exposure could make them more difficult to insure in a hardened market, however, added Sarah Chandonnet, Manager, Personal Insurance, Burns & Wilcox, Detroit/Farmington Hills, Michigan.
“Things like that are really coming into play with underwriting the individual,” she said. “We have had to be as creative as possible with these liability and property risks because of the social media risk.”
High-net-worth individuals are also increasingly taking advantage of opportunities to buy abandoned dwellings and co-ops, especially in places like New York City, said Daniel Verdun, Senior Underwriter, Personal Insurance, Burns & Wilcox, Parsippany, New Jersey. “I have seen a high number of submissions within the last year, mostly with renovations and individuals who see an opportunity to buy an investment property, fix it up, and sell it for a profit,” he said.
Other trends affecting the high-value insurance market include an increase in secondary vacation home purchases, particularly in more secluded areas on the West Coast. Due to heightened wildfire risk and longer emergency response times in these areas, these clients may require personal wildfire protection, which is available with Burns & Wilcox Homeowners Insurance policies through a partnership with Wildfire Defense Systems.
High-net-worth clients may also want to ask their broker about Excess Liability Insurance, Excess Auto Physical Damage Insurance, Flood Insurance, cybersecurity coverage, deductible buy-back programs and other solutions they may need. Brokers placing high-value insurance products should ensure they submit a fully completed application and provide as much detail as possible, Posner said. “In a hard market, these carriers are choosing who they want to write and what properties they want to write,” she said.
To watch the webinar in its entirety, click here.
Contributor(s): Bill Gatewood, Corporate Senior Vice President, National Personal Insurance Practice Leader, Burns & Wilcox; Heather Posner, Managing Director, Associate Vice President, Director, Private Client, Burns & Wilcox; Sarah Chandonnet, Manager, Personal Insurance, Burns & Wilcox; Daniel Verdun, Senior Underwriter, Personal Insurance, Burns & Wilcox
This commentary is intended to provide a general overview of the issues contained herein and is not intended, nor should it be construed, to provide legal or regulatory advice or guidance. If you have questions or issues of a specific nature, you should consult with your own risk, legal, and compliance teams.