MARKETING
Designer protection
AIG attacks the upscale personal lines market with comprehensive protection and risk management
By Phil Zinkewicz
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For the past five years, American International Group, long known as an innovator in insurance products, both domestic and international, has been targeting a very exclusive audience—one that has heretofore been the province of only a handful of insurance underwriters, including Lloyd’s of London, Fireman’s Fund and, of course, Chubb. That audience consists of high net worth individuals—people who own multiple dwellings, multiple cars, art collections, yachts, private jets and more. Obviously, these are very wealthy people who are seeking to protect their most valuable assets and, in recent years, AIG Private Client Group has moved into that market with a vengeance.
“The needs of wealthy individuals cannot always be adequately served by traditional property and casualty insurance,” says Ross Buchmueller, president of AIG Private Client Group. “We, therefore, offer a flexible program that can respond to one’s individual risk management needs as opposed to one that offers off-the-shelf coverage.
“We set out to provide precise solutions for personal risks, ones that can be tailored to protect each policyholder’s assets,” says Buchmueller. “The program includes comprehensive coverage with high limits; a ‘concierge-level’ claims process; and risk management services designed to enhance protection of, and minimize threats to, personal wealth and safety.”
Buchmueller says that AIG Private Client Group’s insurance products were designed exclusively for high net worth individuals. They include:
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“The program includes comprehensive coverage with high limits; a ‘concierge-level’ claims process; and risk management services designed to enhance protection of, and minimize threats to, personal wealth and safety.” —Ross Buchmueller, President |
Excess Liability. Admitted coverage offering worldwide protection against personal injury, property damage and catastrophic financial losses. Policyholders can choose desired limits in increments of $1 million, up to $100 million. The policy also includes employment practices liability coverage to protect against lawsuits filed by domestic staff. In the event of a covered lawsuit, policyholders can participate in their own defense by choosing counsel from a nationwide panel of leading defense firms. In addition, one’s personal attorney can be involved in the case and be reimbursed for some of their expenses. “With our clientele, it’s crucial that personal attorneys are offered a seat at the table,” Buchmueller says. “When reputations are at stake, their involvement ensures that clients’ needs are always considered.”
Homeowners. Comprehensive coverage with deductible options up to $100,000. Taking higher deductibles can often result in premium credits, which enable policyholders to control costs. Policy enhancements include coverage for the breakage of fragile articles and damage caused by domestic pets. If a total loss occurs, the group will
pay to rebuild the policyholder’s home, even if rebuilding costs more than the policy limit. The latest homeowners policy enhancement to be introduced is primary flood coverage for eligible properties.
Excess Flood. The industry’s first admitted solution for excess flood. “Many U.S. home owners, particularly those in coastal areas, obtain basic flood protection from the National Flood Insurance Program (NFIP); but our clients typically own residences with property values that greatly exceed NFIP coverage limits,” says Buchmueller. “As a solution to this gap in coverage, we offer an excess flood solution that enables policyholders to insure each dwelling up to its full replacement value.” Having one’s homeowners and excess flood policies with the same carrier can also eliminate concurrent causation issues at the time of loss.
Private Collections. Precise levels of coverage to protect fine art, jewelry, antiques, wine and other precious collections. Worldwide coverage, which automatically extends to newly acquired items, offers freedom and flexibility for collectors, particularly those insuring jewelry.
Automobile. Specially designed for owners of high-value vehicles. Collector and regular-use cars can be packaged together on one policy for added convenience. The program also provides for repairs with original manufacturers’ parts, choice of repair shop and increased coverage for loss of use, so policyholders can rent a vehicle of comparable value while their car is being repaired or replaced.
Additional insurance products include yacht coverage, aviation coverage, kidnap & ransom and extortion insurance, and insurance for family offices.
But comprehensive coverage is only one part of the AIG Private Client Group story. Risk management and loss control services are stressed whenever possible. Says Buchmueller: “When we first started five years ago, our focus was on client satisfaction. Our aim was to delight clients at the time of loss. And out of our first 10,000 claims, only 16 resulted in complaints. Taking this concept a step further, we began to analyze past claims to see if and when losses could have been avoided, or if damage could have been mitigated. This led us to establish our Department of Loss Prevention in 2004. A designated team studies all incoming claims and develops solutions to reduce the likelihood of similar losses in future.”
For example, many high net worth individuals own vacation homes that are located in remote areas and that are often unoccupied for extended periods of time. Buchmueller states, “Our experience has shown us that a significant number of losses could have been prevented, or damages lessened, if someone had been there at the onset of the event—whether the cause was a burst pipe, an electrical fire or burglary.” To promote the importance of full-time occupancy within primary and seasonal residences, AIG Private Client Group offers policyholders employing domestic staff access to complimentary background investigations. Kroll, Inc.’s, Background Screening Group, a leading provider of employee and vendor screening services, conducts the investigations.
AIG Private Client Group serves two main segments of the high net worth market. At the entry level, access to the program requires either owning a home with a replacement value of at least $1 million, or paying at least $10,000 annually for all personal property and casualty coverages. Those paying over $50,000 a year may have more sophisticated needs that require greater emphasis on risk management.
AIG Private Client Group employs a team of more than 20 risk manage-ment specialists, one of whom is assigned to each large account. The specialist conducts pre-loss valuations and property inspections and, when applicable, recommends specific loss prevention tactics.
To ensure that claims are handled with care and in confidence, each AIG Private Client Group risk management specialist is also a licensed claims adjuster. In the event of a loss, policyholders or their advisers work one-on-one with a professional who intimately understands the property in question. In many instances, the same specialist who oversaw the original property valuation will also serve as the point of contact at the time of loss.
Regardless of account size, all policyholders can access a wide range of AIG Private Client Group’s risk management services. Complimentary, expert home valuations help policyholders maintain adequate coverage. Valuations include detailed documentation of architectural features, unique building materials and valuable structural elements of a residence in order to ensure a fast, fair settlement in the event of a loss. Each risk management specialist has significant experience in the determination of rebuilding costs of fine homes. As needed, AIG Private Client Group’s in-house team is supplemented by a network of independent professionals.
Another key component of AIG Private Client Group’s risk management practice is art collection management. In-house experts, uniquely trained in art-related loss prevention, work in partnership with clients’ personal curators or art advisors to help conduct and maintain inventories, and inspect and monitor the condition of each collection. Collection management specialists can provide experienced insight on the proper display and protection of a collection and, if needed, can arrange and supervise the performance of third-party appraisers.
Despite the group’s comprehensive coverages and loss prevention services, Buchmueller finds customer selection to be of paramount significance. “One of the most important things we can do for our policyholders is to maintain selectivity in the client pool. This results in lower risk overall, which helps controls costs. For example, the average AIG Private Client Group policyholder pays $18,000 in premium per year. If the average client only paid $1,800 per year, then that would affect our fixed costs of doing business.” *