“For quite some time, insurance companies have recognized that high net worth personal lines is a unique and different segment of the personal lines industry,” says Richard Kerr, CEO of MarketScout and part of the founding board of directors for MarketScout’s new Council for Insuring Private Clients (CIPC).
CIPC, which began operation last summer, was founded in response to what Kerr says is the growing interest in this segment and a lack of resources for the commercial lines carriers when it comes to insuring the class.
According to Kerr, commercial lines insurers are increasingly gravitating to the high-net worth segment because it is a highly profitable and specialized class of business. High-net worth individuals are often executives for big commercial companies, creating cross-sell opportunities for P/C carriers and agents providing commercial lines insurance for their companies.
The goal of CIPC is to provide a place where agents, brokers and carriers can go to share best practices, and, says Kerr, make market connections so those in the industry can learn from each other better ways to serve clients in this segment.
“People with homes over $1 million probably also have expensive autos, art, jewelry, etc.,” says Kerr. “Those types of people with those kinds of assets need a higher and different skill set than the normal personal lines.”
The council features carriers that specialize in this segment, with AIG, ACE Private Risk Services, and Fireman’s Fund signing on as the founding strategic partners and new carriers joining now as corporate members.
Kerr says the underwriters who are getting involved are those who currently specialize in high-net worth insurance, but anyone can join the CIPC, even agents who aren’t currently involved in the space.
Kerr says commercial line agents are turning towards the high-net worth segment more so than ever before because the premiums are much higher and accounts are typically tied to executives who also have a high-premium commercial lines account for their business. This relationship opens the door for agents to become a high-net worth client’s personal lines agent as well.
“Commercial lines agents used to say they don’t do personal lines but high-net worth is a different story,” says Kerr. “It can be very profitable for a retail agent.”
Members of the CIPC receive various educational and networking opportunities in the high-net worth space, including: introductions to private client markets; assistance in establishing a non-admitted facility that is a subsegment of MarketScout facilities; access to coverage and form information; and access to private client consultants that can help agents further their professional development in the space.
There will be an opportunity to seek advanced education and certification in this segment through the council, as well. The board of the CIPC is currently working on a creating a “Certified Personal Risk Manager” designation with various educational organizations, which it hopes to have available later in 2013.
The preliminary course curriculum may include:
- Homeowners, auto, collections and excess liability
- Risk management techniques for private clients
- Life and estate planning
- Coverage issues for private clients
In April, CIPC will hold its first annual conference in Dallas featuring educational sessions and networking events. Kerr says the conference will also focus on helping agents identify how vastly different all aspects—including geographic— of this market are, which Superstorm Sandy helped illustrate. Sandy also demonstrated how uninsured high-net worth individuals are and Kerr says there are opportunities in this segment for agents to capitalize on this, but also a great need for education and training. “It is a vastly differing homeowners market—California you have earthquakes and brush fire; in Florida it’s wind and water, and now in New York we know it’s flood,” he says. “There is a massive industry around this. If you bring people together and their primary mission is to do things for their clients, good things can happen.”
(This article was originally published on MyNewMarkets.com, a Wells Media sister publication. Amy O’Connor is the editor of MyNewMarkets.com.)