Rich pickings for all?

When Norwich Union (NU) enters a market, it does not do so in a half-hearted fashion. So, now that the UK’s largest general insurer has launched a new high net worth (HNW) proposition, should the competition be feeling the heat?

NU is certainly not a high net virgin. It had an existing proposition – Tapestry, which catered largely for the mid net worth sector.

Its new offering, Distinct, takes over from Tapestry and has been broadened out into three elements. The first covers mid net worth and suits those with contents valued up to £75,000, while the second is aimed at those with contents up to £150,000.

The third product covers private cars, which if belonging to the wealthy, are likely to be of high value and several in number.

NU did not launch Distinct with ‘ ‘ a big bang. There was no formal press material and instead journalists were briefed at the recent Biba conference.

Meanwhile, the insurer has been talking privately to its intermediaries.

The products were initially only piloted with 30 brokers, before being rolled out to a further 50 this month and in the coming months to another 250.

Exclusive service

So, is the aim to give Distinct an exclusive feel certainly at the upper end?

Director of servicing Phil Hitchcox says all NU’s intermediaries can access the mid net worth product and comments: “We’re happy to talk to brokers about Distinct, but it’s mainly been available to a smaller number so that we can listen to their feedback and make changes as necessary in the early stages.”

He admits that Tapestry’s servicing did not always hit the mark but that this has been beefed up substantially with Distinct. “We have a stronger team in place and have been taking on board what brokers want.”

The service includes paying claims in cash where appropriate via a CHAPS facility directly into the client’s bank account and building up a network of specialist jewellers. Cars are also subject to an agreed valuation at the outset of the policy.

But, is this really sufficiently different from the other high net insurers in the sector – and can NU take away business from stalwarts such as Hiscox and Chubb?

Hitchcox says there are already plenty of satisfied Tapestry brokers out there and Distinct is a marked step up, in terms of the product and service.

He adds: “Brokers know what they are getting from us and we have the expertise to make this an exceptional product, whether through our knowledge of the classic car market or because we can easily incorporate holiday homes cover.”

No HNW insurer wants to talk about cost, but Hitchcox says: “This is a less price sensitive market obviously, but even if they are affluent, a lot of policyholders are going to be pretty astute people. I think brokers will find we are competitive.”

There certainly is more choice out there. For example, Allianz purchased specialist intermediary Home & Legacy last year and is understood to be investing in the business. Home & Legacy, under newly appointed managing director Barry O’Neill, now offers a new product across the broker market in mid net worth Portfolio Plus, which was launched at the start of the year.

Motor trade insurance specialist Tradex has also launched Homefleet, aimed at clients with a small number of named drivers, but a larger stable of vehicles.

It will offer same day quotes on cover and issue immediate policy documentation and a quality claims service.

“‘Greater competition between insurers to provide the widest cover has increased the size of the market. But in the rush to attract new business, insufficient attention has been paid to which insurers actually meet the most claims ’

Tim Bell, Caunce O’Hara

But, Tim Bell, personal lines team leader for Manchester broker Caunce O’Hara, says the well established players have the edge. “Greater competition between insurers to

provide the widest cover has increased the size of the market. But in the rush to attract new business, insufficient attention has been paid to which insurers actually meet the most claims.”

For this reason, he says Caunce O’Hara predominantly works with Hiscox and Chubb.

“Hiscox has been leaning heavily on its good record for claims payment in their recent marketing campaign, which shows the importance of establishing a reputation for generosity in this market – a reputation it is difficult to get, let alone sustain.

“It’s a mistake to recommend policies that seem exceptional at face value. Brokers need to investigate further to find out whether the insurer actually pays out fairly, too.”

He adds that Hiscox will almost always send a surveyor to the client’s home before cover is taken out, so that there is a clear idea of values and that security recommendations can be made.

Austyn Tusler left Hiscox to join AIG’s high net worth division for three years, but is now back as head of Hiscox’s UK art and private clients division.

He says talk is all very well, but insurers have to jump through hoops if they are to delight clients and get the all important broker recommendation.

He says recent claims have involved sourcing rare sapphires to recreate a lost ring, and in the case of a flooded home, going the extra mile when dried out goods were returned.

“High net cover means using better restoration and even removal firms. Following a recent claim we were thanked because all furniture and even toys were properly unpacked and reinstated.

“Likewise, someone who lost their laptop it was delivered the next day so their work would not be disrupted. And, with art, it is about having access to the best restorers. I think brokers can explain to clients that service like this is worth the extra premium.”

Loss adjusters too see mileage in HNW and are starting to launch specialist units.

Crawford Esteem is a new launch and brings together the company’s nationwide team of adjusters and specialists, with a central management unit based in Watford.

Its unit head, David Thompson, says: “We can offer a complete service, including marine specialists for those with yacht claims. We have handpicked these experienced people, not fazed with wealth and fully aware of the levels of service expected.”

Meanwhile, adjusters Davies had a newly established unit in Guildford focusing on special and complex losses and in particular, HNW.

So, longer term will even more entrants populate the high net market? Well, more adjusters in the market are a possibility.

But, as far as insurers are concerned, Bell, of Caunce O’Hara, sounds a note of caution: “This is still household cover and insurers across the board are being hit hard by weather claims.

“If you got a hurricane or severe flooding in Windsor, for example, you’d be looking at some massive bills. I think the market will remain pretty much as it is.”