Please set up your API key!

The Rough Notes Company Inc.



June 01
08:00 2017

CPRIA certification addresses the changing high-net-worth segment

When insurance professionals endeavor to attract young people to the industry, they usually point out that, as with the medical field, people will always need insurance. Thus, job security. Unfortunately, the young people often counter with, “But it’s a dull profession.”

Again—like medicine, the insurance industry is ever-changing, as new exposures appear on the horizon. Think cyber security or drones—or high net worth. High net worth? Really? Has that exposure really changed?

Think about it. We’re told that the middle class is shrinking. That’s true, perhaps, when one considers the segment whose jobs have been replaced by technology or have been sent to other countries. At the upper end of the middle class, however, “the bar has been raised,” says James Kane, CIC, CRM, senior vice president and personal risk practice leader for USI Services, in Valhalla, New York.

A new segment

According to Kane, high net worth no longer is comprised of the upper 5%. It’s made up of those who probably don’t even realize that they qualify for the moniker. “They can earn a million dollars, but the lion’s share make $300,000 and own two cars,” he says.

Jim Opie, vice present and personal lines sales director at PayneWest Insurance, an agency with locations throughout the Pacific Northwest, concurs, adding, “The upper middle class spends money differently than they have in the past. They often spend money on things that are difficult to insure—things they use on a daily basis.” Travel, second homes, eating out at high-end restaurants, jet skis, or boats are givens.

“They’re not the Warren Buffets,” agrees Patricia Couzi, assistant vice president of private client insurance for Sahouri Insurance, a family-owned, independent agency in McLean, Virginia. “They don’t necessarily represent money wealth.” Yet, because they have moved up on the middle class ladder, “they acquire valuable possessions and don’t even realize that they need advice on these possessions or the legalities related to their business position.”

They may have a vacation home, which is empty for extended periods of time. What are the implications? What about their collections or antique cars? Kane says one of his clients owned 12 cars. Umbrella coverage comes to mind.

Wilmington, Massachusetts-based Susan Ogrodnik-Smith, chief sales officer-personal insurance for HUB International New England, points out that, particularly with the advent of two-income families, many of which are made up of professionals such as lawyers or doctors, “The middle class percentage is leaning toward mass affluence. They’re wine or art collectors, have toys like jet skis and snowmobiles, and may have household domestics.

“They’re smart people,” she adds, “but they’re so busy being successful, that they don’t think of protecting themselves in a different way. They spend time with accountants and wealth managers, but don’t think of the risks they face. Their wealth can be decimated if they don’t have proper protection.”

In addition, she observes, many have started businesses that bring along new exposures. Does the wife own a boutique business? Do clients come to her home to confer with her? Does she have employees, which may create the need for workers compensation insurance or employment practices liability for alleged wrongful termination or sexual harassment?

What about farms and ranches? “There are a lot of ins and outs with the exposures associated with these businesses; I learned about all of the particulars,” says Ogrodnik-Smith, who recently completed an educational program about risks associated with the segment. “It was interesting for me and I actually learned quite a bit about that.” Perhaps a couple decides to dabble in supplying the farm-to-table restaurant industry. “They need P-C analysis just as much as a wealthy person,” she notes, “and, unfortunately, they don’t know what protections they need.”

Kane cautions that “they can be a liability target because of their profession, being doctors or lawyers, for example. Their assets portfolio is vulnerable and gets more complicated with age. They may have up to $1 million to $5 million in assets.”

Think about liability coverage alone, Ogrodnik-Smith says. “People’s lives are much more complex. Wealthy individuals are often the targets of lawsuits, frivolous or not, because of perceived deep pockets. All of the best estate planning and tax planning that these individuals undertake can be at risk if the proper property and casualty insurance is not put in place.”

All agree that these “unaware” clients need protection, and the insurance professionals who serve them need the knowledge to advise them well.

“The area is becoming more complicated.We must be better prepared to advise.”

—Patricia Couzi
Assistant Vice President of
Private Client Insurance Sahouri Insurance

An answer

Education is the key, and a relatively new professional designation fits the bill. The offering was developed and is administered by the Private Risk Management Association (PRMA). PRMA members include large and small agencies and brokerages, carriers, and any specialists who serve high-net-worth clients. Its goal is to link this community together in a collaborative way.

Completing the course of study earns participants the Chartered Private Risk and Insurance Advisor (CPRIA) Certificate, which is issued by Private Risk Management Association and the St. John’s University School of Risk Management Center for Professional Development. Some of the curriculum is CE-qualified in some states.

The first class of 149 participants received certification in March 2017.

Made up of six segments, the online curriculum allows participants to work at their own speed. Most segments take six to eight hours to complete.

They are:

  • Segment I: Fundamentals of Personal Risk Management
  • Segment II: Understanding the High Net Worth Universe
  • Segment III: Strategic Coverage Placement
  • Segment IV: Lifecycle Risk Management
  • Segment V: Understanding Specialty Risks
  • Segment VI: Personal Security, Life Safety, and Protection

Students receive reading assignments, hear case studies, take part in sessions where they’re discussed more fully, participate in interactive e-learning activities, and listen to speakers who, according to Opie, relate their topics to the daily lives of both small and large firms. All of the instructors are volunteers, who consider their efforts to be a labor of love, says Kane, who serves as a PRMA trustee.

Employers and employees alike find the curriculum to be time and cost effective. Instead of financing travel to a central location, and paying for meals and hotels, employers can, says Opie, “work with employees each day to assure that they are applying what they learned at desk level.”

In addition, because PayneWest “is education driven and has an education budget per person on an annual basis, we can capitalize on the dollar with a big group working at one time.” Currently around 30 employees are going through the program, with 25 finishing during the second quarter of 2017.

Kane’s company has 50 participants working on the program (two have been certified), and they hope to increase participation by 20%. Because they have family responsibilities, many employees find it hard to get away; the online component becomes quite practical. It also has proved to be more attractive to Millennials, Kane observes.

All agree that the CPRIA certification program has exceeded their expectations.

“It’s a very rich, very remarkable curriculum,” says Couzi, who emphasizes the convenience of being able to work according to one’s own schedule. “Other courses, such as the CIC, take more time. This covers all aspects: products, exposures, how to approach the customer.” In addition, “one can learn from others with experience, and speakers provide specific examples.

“Most of all,” she adds, “It helped me understand the background of the customer. I feel more empowered.” Couzi concludes, unconsciously revealing her enthusiasm for the entire concept, “I hope that PRMA will add more segments that go into greater detail on coverages. In this industry, you never can learn enough.”

Having spent her entire career in the high-net-worth arena, and currently serving as a PRMA trustee, Ogrodnik-Smith, says the CPRIA Certification Program has enriched her own experience. She particularly likes the curriculum, because it goes into commercial coverages. The segment that covers understanding specialty risk proved to be most valuable to her, she says, as she learned about exposures she hadn’t considered.

The value of the program is reflected in the enthusiasm of the participants in her office. “They work on it together,” she observes. “I saw two people sitting at one computer working on it. Morale is high.”

Adds Opie, “Because PayneWest places a high focus on education, it constantly looks for a way for sales executives and account managers to become more in tune with their client base.” In addition to the usual insurance training, the CPRIA curriculum “can train on processes and becoming more client-centric. It has exceeded my expectations. Its greatest advantage is that participants can go through a module and apply it to daily life. It’s not theoretical.”

Kane concludes, “Participants are expected to think critically and learn about real-life problems—to assess and strategize. It’s not just about shoving a policy. The right answer may not be a policy at all.” Rather it’s about comprehensive risk management. What do you own? How do you live? Do you leave for the weekend?

And Couzi echoes, “The high-net-worth area is becoming more complicated. We must be better prepared to advise.”

Satisfying these needs was PRMA’s intention. According to PRMA Executive Director, Lisa Lindsay, “The CPRIA certification was really intended to show that a person is willing to go through training to gain deeper understanding of those who want to become wealthy.”

For more information:

Private Risk Management Assn.

The author

Alice Ashby Roettger is a freelance writer based in Indianapolis, Indiana. She also serves as an editorial assistant at Rough Notes magazine.

Warning: count(): Parameter must be an array or an object that implements Countable in C:\inetpub\wwwroot\roughnotes\wp-content\themes\legatus-theme\includes\single\post-tags.php on line 5

Related Articles






Philadelphia Let's Talk - Click Here

Spread The Word & Share This Page

Trending Tweets