Is the mass market failing wealthy insureds?

When you’re dealing with the glamorous and wealthy, personal service matters. That’s the mantra of boutique insurance business Personal Risk Management Solutions (PRMS), and it appears to be working.

The high-net-worth (HNW) and ultra-high net worth (UHNW) specialist insurance broker has a 99% win rate when it comes to new business, according to PRMS chief operating officer and partner Dale Krupowicz (pictured). The female-founded and managed business has also achieved or outpaced its 25% growth target every year since launch in 2007. It has pulled this off entirely organically, and the hard market has led to boom rather than bust for the business.

It boasts Forbes list honorees, major art collectors, entrepreneurs and large business owners among its roster. PRMS is active across 50 states and further manages international exposures.

“We have clients that run the gamut,” Krupowicz told IBA.

“It’s a completely different world” – the hard market impact

Keeping on top of clients’ needs has proved vital in today’s shifting marketplace. Insurance carriers have tightened their appetite, and some have pulled out of areas entirely as they look to cut down their exposure amid inflationary 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 clients a little differently than we have in the past,” Krupowicz said.

For some, this has meant a mindset shift of looking at insurance as a vehicle for payouts in catastrophic situations rather than smaller claims. That could mean looking at higher deductibles, sub-limits, or, for UHNW clients, even self-insuring. The non-admitted market has played an increasing role.

“Five years ago, if a client came to me, and they wanted to insure a luxury condo, a ski house, a beach house, I’d have insurance companies knocking down my door trying to write the business,” Krupowicz said. “That same client today, if I get an offer it could be 50% to 100% more than what they would have paid back in 2019, it’s a completely different world.”

Not all brokers are going to bat for clients

Insurers may be quick to turn down a client with a loss history when approached by email, but sometimes that “no becomes as yes” when a member of PRMS’ team goes to bat for the insured on the phone. All it might take to turn things around is a savvy insurance broker to explain how the insured has looked to mitigate risks and why there might be extenuating circumstances.

As per Krupowicz, this can be “half the battle.”

PRMS consistently wins business from mass-market brokers that have struggled to keep on top of their clients’ needs in a tougher environment.

“We’re embracing the hard market,” Krupowicz said. “We have our clients’ friends calling us because they’re in that situation where their premiums are going up, they’ve not heard from anybody [at their broker].”

Winning with “high touch” service”

Krupowicz attributed her firm’s growth success to its “high-touch service” and serving as a consistent advocate for its wealthy clients. Insureds do not just want to buy insurance; they also want consultative services.

“There was an Oliver Wyman survey recently, and it said that 70% of clients have not had an insurance review – now, that’s amazing to me, because clients are movers and shakers, and their lifestyles are changing all the time,” Krupowicz told IBA. “It’s up to us as the brokers to make sure we’re staying on top of that, to make sure we’re advising them accordingly, and making sure all the assets that they’ve worked so hard to get are protected.”

HNW and UHNW clients – the advice and insurance gap

Chubb and Oliver Wyman research on wealthy individuals found:

• 10% of wealthy individuals surveyed lacked expanded coverage
• 16% of wealthy families indicated they do not know the fair value of their possessions
• 70% of wealthy families said they never or rarely had a professional assessment done.

Travel and trends help PRMS keep on top of clients’ needs

Market dynamics aside, PRMS’ staff spend a great deal of time jetting around to visit insureds to make sure the business keeps up to date with their needs. For Krupowicz, this might mean frequent travel to wealthy areas in states like California, Chicago or Colorado.

“It’s important for us to see our clients’ homes, it’s part of that personal touch and it’s all about getting to know what we’re insuring so we can advocate on their behalf with insurance companies,” Krupowicz said.

Travel is a bonus, not a strain.

“I always felt this to be the interesting side of insurance,” said Krupowicz. “You’re seeing clients’ beautiful homes, you’re talking to very interesting and intelligent people.”

Keeping on top of contemporary trends is also vital. That could mean tapping into personal cyber insurance or getting to grips with new types of valuables.

“You’re seeing designer sneakers like Air Jordans going for thousands of dollars, you’re seeing Birkin bags, you’re seeing luxury watches,” Krupowicz said. “Maybe clients just thought about typical valuables like fine arts and paintings in the past, but it’s becoming a lot more common to look to insure those items.”

A rise in nuclear and other high-profile verdicts has also led more clients to look to umbrella policies with higher limits.

“They’re seeing things in the papers and in media about other kinds of lawsuits,” Krupowicz said. “Recently clients were talking about their concern of, when they have a housekeeper, there could be sexual harassment or wrongful termination [claims], they’re thinking about this more.”

Looking to homegrown talent

On launch 17 years ago, PRMS started by courting seasoned insurance veterans. Since then, it has found a winning formula in focusing in on homegrown talent.

“What we have found is that teaching them our way is the better thing to do, because they don’t come in with any preconceived notions, they want to learn, they’re young, they’re eager,” Krupowicz said. “A lot of our staff have come directly out of college, some of our EVPs today started out as interns.”

Krupowicz herself started in the industry as a file clerk in an insurance office before heading to college, where she majored in marketing. On graduating, she joined her cousin’s insurance agency.

“He got me my start and then the rest is history,” Krupowicz said. “I was always on the broker side, I just kept moving up and up through the ranks and here I am today.”

How are your HNW and UHNW insurance clients faring? Share your experience in the comments below.