What's new in HNW?

Mark Daines, director, Lark Insurance

We’ve seen a rise in escape of water and wet perils and that seems to have been a trend over the last two or three years. The problem for our high-net-worth clients is they are often travelling or staying in their other homes for large periods. You can imagine how many gallons of water would pump through a house if it was left unchecked for two weeks - especially if it was driven by the cold water mains.

A lot of insurers are trying to understand why we’re seeing this increase in escape of water losses. Some have been really proactive. If there’s been an escape of water loss and the value of the loss is high, for instance, they include the ability for the client to have a smart meter installed in the claim. We know of a few insurers that are trialling this.

Year-on-year, underinsurance continues to be a challenge. From a broking and customer perspective it’s about making sure the portfolio remains correctly insured so that it’s covered if a loss does occur. The value of watches has increased quite substantially, for instances, and so it’s important to stress the importance of reviewing your sums insured and undergoing regular valuations. In the event of a loss the last thing we want is for the claim not to be settled for the full amount.

Mark Coffey, Private Clients managing director, Oak Underwriting

The same claim last year would most likely be more expensive this year. The cost of replacement parts is having an impact on claims inflation, and while the impact of Brexit is unknown at the moment it may play a part in the future by driving up the costs of repair and replacement.

When we discuss losses everybody talks about security and theft and making sure you’ve got the right alarm and the right levels of security, and yet the peril that is costing the most in the high net worth space is escape of water. We would expect our brokers to be having conversations with their customers about this. RSA are piloting a product at the minute that detects leaks - so it highlights the problem before it escalates. And there are others that will shut your water down completely if a leak is detected, but those can be quite intrusive.

Underinsurance is a common problem and brokers should be advising customers to get a valuation carried out at least every three years. Obviously there’s a balance to be struck as there is a cost attached to valuations, however the value of luxury items can fluctuate quite dramatically. It would not be unusual for a Rolex watch to be worth double in 2017 to what it cost in 2013, for instance, so you don’t want to be in a position where you have a single article of cover of £15,000 for a watch that is now worth £24,000.

Brokers should also be keeping in regular contact with their customers so they are also aware what items are being added to their portfolios throughout the year, such as on birthdays, wedding anniversaries, Christmas etc.

Simon Marsh, director, VisionTrack

At the high-net-worth end of the market, big data and the internet of things (IoT) can improve the customer experience, simplify the claims journey and help to reduce the underlying risk. There is a huge opportunity for high-net-worth individuals to control their home, car and other assets from their smart phone and the risks associated with those, which is only just taking off. 

We are at the point where homeowners can turn on heating and appliances remotely and using smart technology to detect moisture or movement. And it’s about connecting up all this different technology onto one platform. People don’t want to have millions of apps. They want the ability to monitor everything in one place.

The super rich like to buy their children nice things. So you could potentially have a 20-year-old driving a car that’s worth a lot of money, and which is also extremely powerful. The parents may want to have access to information on how their child is handling that vehicle - photographs as well as data.

Such information can also be extremely useful in making claims quick and easy to process and reducing potential disputes. In collision claims where both drivers said the other went through on a red light it would be impossible to know the facts without the camera footage. But because it’s automated and there are no grey areas the claim goes through its review and the insurer can make a decision within half a day.