Navigating the complex world of high net worth insurance

High net worth insurance is a wholly unique field – tailored to meet the distinctive needs of individuals with substantial assets. These policies offer bespoke protection for high-value homes, luxury cars, yachts, and personal collections, emphasizing customized policies, higher coverage limits, worldwide protection, and expert risk management services.

Lorrie Baldevia (pictured), platform president at AssuredPartners, leads a high net worth insurance practice at the firm. This specialized group addresses the unique needs of wealthy individuals, families and business owners, covering everything from future tax liabilities, to medical benefits, to private art collections.

“When working with high net worth clientele, especially at the upper echelons, you’re a part of their advisory team as the insurance expert.” she told IB. “It’s a team effort, and our firm ensures all risks associated with the family and their advisors are managed.”

‘Many claim to be in the high net worth space but are still market shopping rates’

Baldevia noted that there are growth opportunities within this space, contrasting it with other market segments.

“Many claim to be in the high net worth space but are still market shopping rates,” she said. “In this space, it’s about understanding the type of coverage, not just rates. It’s a hard market now, with issues like carriers leaving areas and market disruptions. The biggest opportunity is educating clients so they understand coverage and aren’t surprised at renewal time. If they are, you haven’t done your job.”

Baldevia describes the high-net-worth insurance market as a consultative one, where advisors must educate clients about the complexities and nuances of their coverage. “It’s about having a consultative conversation,” she told IB. “If clients are surprised by rate increases, then you haven’t prepared them properly.”

The role of an insurance advisor in this space extends beyond traditional boundaries, involving close collaboration with other professionals in the client’s life.

“You’re not just working with the family; you’re working with their entire team—their accountants, CFOs, and other advisors,” she said. “This integrated approach ensures that all aspects of their wealth and risk are managed effectively. We have many high-net worth clients with high value assets including art collections and vintage cars. It’s not uncommon for these clients to hire their insurance advisor on their personal payroll to manage all their family’s assets because they know all the details.”

This in itself highlights the dynamic nature of the high net worth sector, driven by clients’ evolving needs and circumstances.

“Clients are always acquiring new assets, selling businesses, or transferring wealth,” she said. “This constant change requires us to be agile and responsive. We merge teams handling financial services and personal assets to offer comprehensive advice. This ensures that all aspects of the client’s wealth, from taxation to personal possessions, are covered.”

‘There’s a growing middle market of high-income earners’

Addressing the evolution of high net worth markets, Baldevia noted the expansion of this segment. “We’ve always had an ultra-high net worth practice, but now there’s a growing middle market of high-income earners,” she said. “Real estate costs and economic growth have increased wealth, creating new opportunities for us.”

And, touching on the regulatory and economic challenges affecting the insurance industry, Baldevia is optimistic. “Limited capacity to write policies, especially for high-risk areas like coastal or fire zones, is a significant issue,” she said. “Brokers with access to larger markets, like AssuredPartners, have an advantage in navigating these challenges.”

Looking ahead, Baldevia sees technology playing a crucial role in the industry’s future – as it will in almost every industry in some capacity.

“AI and data consolidation will help us understand clients better and advise on risks more effectively,” she said. “Once we know our clients and understand what they have, we can also give more education – which I think is a trend of an innovation. [It’s about] really investing in that so we understand if the carrier has had underperforming ratings… the importance of also understanding their claims and their loss ratios.

“I think those [trends] around technology [will] help us get [more precise] information so we can serve our clients better – that’s something we are most definitely putting emphasis on at AssuredPartners.”