Is the mass market letting wealthy insured people down? | Insurance business America
And how this insurance broker opens up 99% of all new business opportunities
Insurance News
By Jen Frost
When you deal with the glamorous and wealthy, personal service is important. That’s the mantra at boutique insurance company Personal Risk Management Solutions (PRMS), and it seems to be working.
The high-net-worth (HNW) and ultra-high-net-worth (UHNW) insurance broker has a 99% success rate when it comes to new business, according to Dale Krupowicz, chief operating officer and partner at PRMS (pictured ). Founded and run by women, the company has also met or exceeded its 25% growth target every year since its founding in 2007. He did this completely organically, and the tough market resulted in a boom rather than a bust for the company.
Its members include Forbes list winners, major art collectors, entrepreneurs and major business owners. PRMS operates in 50 states and also manages international engagements.
“We have customers that cover the entire spectrum,” Krupowicz told IBA.
“It’s a completely different world” – the hard market hit
In today’s changing market, staying on top of customer needs has proven crucial. Insurance carriers have curbed their appetite and some have pulled out of areas entirely to reduce their exposure in the face of inflation and severe weather pressures. Clients with properties in California, Florida, New York City, the Hamptons, Colorado, Louisiana and Texas have felt the strain.
“We have to advise our customers a little differently than before,” said Krupowicz.
For some, this meant a change in mindset and they viewed insurance as a means of paying out in catastrophic situations rather than for smaller claims. That could mean looking for higher deductibles, floor limits or, for UHNW customers, even self-insurance. The unauthorized market has played an increasing role.
“Five years ago, if a customer came to me and wanted to insure a luxury condo, a ski house or a beach house, insurance companies would knock on my door and try to close the deal,” Krupowicz said. “The same customer today, if I get an offer it could be 50% to 100% more than what they would have paid back in 2019, that’s a completely different world.”
Not all brokers will court customers
When insurers approach a customer with a claims history via email, they may quickly reject them, but sometimes a “no” turns into a “yes” when a member of the PRMS team steps in for the insured on the phone. All that is needed to change the situation is an experienced insurance broker to explain how the insured has attempted to mitigate the risks and why there may be extenuating circumstances.
According to Krupowicz, this can be “half the battle.”
PRMS regularly wins business from mass market brokers who are struggling to keep track of their clients’ needs in a more challenging environment.
“We’re taking advantage of the hard market,” Krupowicz said. “Our customers’ friends are calling us because they’re in a situation where their premiums are going up and they haven’t heard from anyone [at their broker].”
Winning with “High Touch” Service
Krupowicz attributed her firm’s growth success to her “high-touch service” and consistent advocacy for her wealthy clients. Insured people don’t just want to take out insurance; They also want consulting services.
“There was a recent survey by Oliver Wyman that showed that 70% of customers have not received an insurance review – this is amazing to me because customers are doers and their lifestyle is constantly changing,” Krupowicz told IBA. “It’s up to us as brokers to make sure we stay on top of things, advise them accordingly and ensure all the assets they have worked so hard to acquire are protected.”
HNW and UHNW customers – the advice and insurance gap
Research by Chubb and Oliver Wyman on wealthy individuals found:
- 10% of the wealthy people surveyed did not have extended insurance coverage
- 16% of wealthy families said they did not know the fair value of their possessions
- 70% of wealthy families said they never or rarely had a professional appraisal.
Travel and trends help PRMS keep track of customer needs
Aside from market dynamics, PRMS employees spend a lot of time visiting policyholders to ensure the company stays abreast of their needs. For Krupowicz, this could mean frequent travel to wealthy areas in states like California, Chicago or Colorado.
“It’s important for us to see our customers’ homes, it’s part of that personal touch and it’s about finding out what we insure so we can advocate for them with the insurance companies,” Krupowicz said.
Traveling is a bonus, not a burden.
“I always felt like this was the interesting side of insurance,” Krupowicz said. “You get to see the clients’ beautiful homes and talk to very interesting and intelligent people.”
It is also important to stay up to date with current trends. That could mean getting personal cyber insurance or looking into new types of valuables.
“You see designer sneakers like Air Jordans that cost thousands of dollars, you see Birkin bags, you see luxury watches,” Krupowicz said. “Perhaps in the past customers have only thought about typical valuables such as art and paintings, but insuring these items is becoming increasingly common.”
The increase in nuclear and other high-profile verdicts has also led to more customers seeking umbrella policies with higher limits.
“You see things in the newspapers and media about other types of lawsuits,” Krupowicz said. “Recently, clients spoke about their concerns that having a housekeeper could result in sexual harassment or wrongful termination [claims]they think about it more.”
Looking for local talent
When it launched 17 years ago, PRMS began advertising to seasoned insurance veterans. Since then, it has found a winning formula by focusing on homegrown talent.
“We found that it’s better to teach them our way because they don’t have any preconceptions, they want to learn, they’re young, they’re eager,” Krupowicz said. “Many of our employees come straight from university, and some of our EVPs started today as interns.”
Krupowicz herself began her career in the industry as a clerk in an insurance office before going to college, where she specialized in marketing. After graduating, she joined her cousin’s insurance agency.
“He gave me the go-ahead and the rest is history,” Krupowicz said. “I have always been on the side of the brokers, I have continued to rise through the ranks and I am here today.”
How are your HNW and UHNW insurance customers doing? Share your experiences in the comments below.
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2024-04-10 15:54:29
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