The super-rich, dubbed “ultra-high-net-worth” by property/casualty insurers, arguably have unique coverage needs. One of the more unusual turns out to be this: multinational coverage to address home ownership of properties in several countries, a new study from AIG Private Client Group has found.
That may seem like a fine detail to some. But the division of American International Group asserts that it is important to know that its U.S. ultra-high-net-worth clients tend to own multiple houses overseas, with a particular focus on North and South America. Knowing this, AIG said, will help it develop new multinational property coverage for clients in this class with “considerable overseas assets.”
Ultra-high-net-worth insurance clients represent a growth opportunity for insurers, and the industry has tried to understand the segment better. A Novarica brief issued in August, for example, found that carriers pursuing this market segment need to boost their customer service and customize workflows to fulfill the unique needs at hand.
Among Novarica’s findings: ultra-high-net-worth customers need a combination of traditional personal lines and commercial lines coverage, including private aviation; employment practices liability; domestic employee workers comp; recreational vehicle and ATV; inland marine for boats and yachts; natural catastrophe protection; jewelry, art and collections; personal umbrella; automobile and fleet; homeowners and condos; and classic car coverage.
Novarica also classifies ultra-high-net-worth clients as having more than $50 million in investible assets.
Separately, the Private Risk Management Association (PRMA) launched in 2014 as a nonprofit, independent, member-owned group focused on supporting the specialist high-net-worth insurance category through enhanced education, practice management, awareness and advocacy. Founding members and sponsors include ACE (Now part of Chubb) and Privilege Underwriters Reciprocal Exchange, as well as a number of independent agents and brokers.
Super-Rich Own an Average of 9 Homes Globally
The AIG Private Client Group report looked more closely at home ownership. For its study, it gathered data looking at trends with clients who pay more than $250,000 in annual personal insurance premiums. It found that ultra-high-net-worth customers typically own an average of nine homes overseas.
Here are the top countries in terms of home ownership for this client base: Mexico (14 percent), Bahamas (13 percent), England (12 percent), France (9 percent) and the Caribbean region (9 percent).
Underscoring the complex coverage needs for ultra-high-net-worth customers, the study also found that this client base on average owns 18 regular-use vehicles, $1.7 million in insured jewelry and $19.6 million of insured fine art.
AIG said its new AIG Private Client Group offering—a collaboration between its Commercial and Consumer Insurance segments—is meant to address the unique coverage concern. It is designed to give clients coverage through one provider, rather than having to rely on multiple coverage from different insurance providers as is typically the case with property ownership in multiple countries.