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Panel of insurance pros assess needs for high-net-worth clients

April 24, 2014

Palm Beach Daily News - 05/25/14
By Robert Janjigian

Insurance companies competing in high-net-worth markets strive to provide clients with sufficient levels of protection. As they do, protecting against new types of threats and individualizing policies are top priorities in developing comprehensive insurance plans.
Palm Beach-headquartered Celedinas Insurance Group organized a panel discussion centered on the evolving landscape of high-net-worth insurance. The event at The Breakers on Thursday drew about 125 private bankers, trust officers, accountants, attorneys and real-estate professionals from the local area.

Ray Celedinas, president and CEO of Celedinas Insurance Group, invited representatives of the five high-net-worth insurance companies to discuss the changing face of insurance geared toward wealthy individuals and families.

Participating were:
* Robert Courtemanche, chairman, ACE Private Risk Services, Basking Ridge, N.J.;
* Jerry Hourihan, president, AIG Private Client Group, New York;
* Christoph Ritterson, senior vice president, western territory manager for Chubb, Chicago;
* Joseph Kinsey, senior vice president, personal insurance field executive for Fireman’s Fund, Tampa;
* and Ross Buchmueller, president and CEO, Pure High Net Worth Insurance, White Plains, N.Y.

Web worries

Insurance that protects against damages resulting from Internet posts or social media is one area that providers advise high-net-worth, high-profile customers and their advisers to consider, said Courtemanche. “The web is forever, and reputations can be harmed, with legal action often required.”

“High-net-worth individuals could be targets of cyber-terrorists,” said Kinsey, noting that in the era of smartphones and residences that are more networked, the potential for exposure and tracking of wealthy people increases.

“We need to educate clients to protect themselves.”

Money matters

Hourihan expressed concern about drivers without insurance who are at fault in traffic accidents. High-net-worth clients should purchase uninsured motorist coverage or increase the level of such insurance coverage, he said.

Ritterson also pointed to the trend toward larger awards for damages in court cases, which is a reason for upping coverage.

“Just a few years ago, a brain injury award averaged $4 million to $5 million; in 2012-13, the average award was $9 million,” he said.

The Chubb executive pointed out the need for liability coverage to protect against injury claims on a client’s property. “A broken leg can be $2 million in the right lawyer’s hands,” Ritterson said.

Custom capability

“Clients don’t want off-the-shelf product,” said Kinsey. “They also want ease — blanket coverage of multiple locations, fine art, family members — with one bill.”

Being able to customize an insurance strategy is a high priority, said Ritterson, observing that insurance providers also are acting as advisers beyond matters of coverage and price. He especially sees a need for expertise at insurance firms about issues related to collectors and investors of fine art.

Kinsey looks to policies written on art, wine, jewelry and collector automobiles as growth areas for his firm. There is a need for current appraisals, done year to year as values increase, he said, citing the record-breaking prices paid at art auctions over the past decade.

Buchmueller sees increased services from insurance professionals as the key to satisfying clients, whom he calls “too busy” to do the research necessary to find the right coverage.

“They need us to do the work.”

“The challenge is complacency,” Courtemanche said. “Brokers can be more proactive.”