ACCLAIM - July 2017
The PURE Group of Insurance Companies is the only insurer in the U.S. focused solely on the high net worth niche offering coverage and services to help protect high value homes, artwork, jewelry, automobiles, and watercraft as well as defend against liability threats. Collectively, the companies that make up the PURE Group provide the PURE membership with excellent financial strength and capital flexibility and a strong sense of alignment of interests.
PURE is honored to have been named “Best Insurance Underwriter” for the second consecutive year and recognized alongside so many exceptional organizations.
What makes PURE so unique?
PURE was built from the ground up with the busy lifestyle and extraordinary assets of the high net worth in mind. It’s “throwback” model resembles the great mutual insurers of the past balanced with a smart, highly efficient capital structure, cutting-edge solutions, and gains of the reciprocal insurer allocated to its membership.
PURE has tackled the fundamental conflicts in the insurance industry and is dedicated to a strong alignment of interests with our membership. Looking at the typical shareholder-owned model, it can be difficult to deliver great returns to shareholders due to the amount of capital required, the unpredictability of Mother Nature and the many other influences that make insurance results volatile. The pursuit of returns often comes at the expense of policyholders through higher and higher prices. PURE, on the other hand, was designed to allow wealthy families to effectively fund their own insurer, with a steady flow of “surplus contributions” from members strengthening the balance sheet and contributing to a favorable cost of capital. Plus, having an independent management company (Attorney-in-Fact) produces an entrepreneurial environment, energizes employees and satisfies shareholders at a lower cost.
How does your team contribute to the success of your organization?
PURE is a purpose-driven company. Every employee understands that we are in business to make our membership smarter, safer and more resilient so they can pursue their passions with greater confidence. Our team is composed of outstanding, dedicated professionals from diverse backgrounds who all do their part in delivering an exceptional member experience. Many of them are seasoned veterans with deep expertise, but nearly half of all our employees are millennials who are growing into the future of the insurance industry. Having team members with such different levels of experience generates great passion, purpose and innovation.
What are the challenges of succeeding in this market?
One of the reasons we enjoy the insurance industry so much is the complexity. The industry tackles the fundamental challenge of not knowing the cost of goods sold until many years after writing a policy. This makes it difficult to match the prices we charge to the risk of loss we bear for the membership, but we’re committed to doing it. For example, we assess auto liability risk by, among other factors, the number of drivers in a household not the number of cars—because you can’t drive more than one vehicle at a time—so having many cars in the driveway doesn’t increase a family’s risk. Most recently, we broke from the typical practice of charging a flat, high premium per million dollars of coverage for personal excess liability limits over $10 million. We now integrate individual risk factors into the pricing model, which actually lowered premiums for the vast majority of members who purchase these high limits.
Serving the high net worth adds to the complexity, as our policies and service must meet their unique needs. For example, our Homeowners policy affords up to $50,000 for lost or stolen jewelry because that’s the level of protection many of our members need. The $5,000 afforded by most insurers just doesn’t do the job.
In which areas are you improving and developing?
We have viewed the delivery of the best service in the industry as a journey without a destination; we are always searching for new ways to innovate and serve our members better. In 2016, we accelerated the staffing of a full-time catastrophe response team to provide more timely and personalized service during events like Hurricane Matthew. We also launched PURE Programs, a Managing General Underwriter that provides coverage and great service for high net worth individuals with higher-risk homes outside the admitted market. PURE Programs is currently available in Florida and South Carolina, and we’ll continue expanding into other states. In early 2017, we completed the acquisition of a fine-arts services company, The Haven Art Group, which will add tremendous value to our members with substantial art and jewelry collections. Haven provides expertise in preservation, restoration and valuation of artwork and they provide curatorial services to help private collectors manage all aspects of their collection. But there’s always more to do, especially related to finding better ways to help our members prevent losses.
Whom do you look up to for inspiration and examples to emulate and compare yourself against, either inside or outside the wealth management industry?
We look directly to the wealth management industry for inspiration. Great wealth management firms have delivered upon the promise of an alignment of interests, the elimination of conflicts and a commitment to transparency. The insurance industry is naturally conflicted—even aside from shareholder pressures. Brokers are seen as the ones with a duty of service, but the insurers who try to use compensation to influence advice can be the real problem. We’re certainly not perfect, but we feel that we’re on the right side of history with this—and we aspire to be even better.
How will you use the award to raise profile in the industry and among clients?
The U.S. high net worth insurance market is estimated to be a $15 billion market. While PURE has grown by nearly 40 percent annually for ten consecutive years, massive opportunity remains. This recognition is an important mark of pride for our employees and the independent brokers who have introduced us to more than 65,000 wealthy families over the past decade. The best is yet to come.
You can also read this article on page 11 of the July 2017 issue of ACCLAIM.