"ACE-ing" the affluent market

ACE Private Risk Services delivers its ACE Platinum Portfolio to high net worth clients

By Elisabeth Boone, CPCU

“The very rich,” author F. Scott Fitzgerald famously observed in his 1926 novel The Rich Boy, “are different from you and me.”

Indeed they are. From the heirs to centuries-old family fortunes to the 20-something tech billionaires of modern times, the very rich are different—from what they value to what they expect—and it takes a special kind of savvy to anticipate and respond to the needs of affluent clients.

That specialized skill is a hallmark of ACE Private Risk ServicesSM, a unit of the ACE Group of Companies, a leading global insurer and reinsurer. In February 2008, the ACE Group acquired the affluent personal lines business of The Atlantic Companies, whose centerpiece product was the Atlantic Master Plan (AMP). (See “Partners in Personal Lines” in the October 2005 issue of Rough Notes.)

In May 2008, ACE Private Risk Services launched a refined and expanded version of the Atlantic Master Plan. Called the ACE Platinum PortfolioSM, the new offering is a package product that provides home, auto, valuables, umbrella, and watercraft coverages for high net worth individuals. The policy is available to agents in 17 states and the District of Columbia, and plans call for the rollout to be completed in all 50 states by the end of 2009. Nonadmitted options are available in all states.

The jurisdictions in which the ACE Platinum Portfolio is currently available represent more than 70% of all homes in the United States valued at $1 million or more, according to Bob Courtemanche, chief executive officer of ACE Private Risk Services. With the addition of Florida and Texas early in 2009, he notes, that figure will increase to more than 80% of all $1 million-plus homes.

Expanding the platform

What motivated ACE to acquire the personal lines business of The Atlantic Companies?

“For some time, ACE had been viewing the long-term growth and profitability of the high net worth market segment as a strategic opportunity to further diversify its business operations,” Courtemanche says. “The acquisition gave us a platform to advance our progress quickly. There were many strong agency relationships; there was a loyal distribution force. There was an excellent systems platform that made it easy for agents to do business with the company. Also, there was a strong culture of excellent claims and policy issuance service that is serving us well now as we build on that foundation,” he explains.

Even before acquiring the Atlantic Mutual business, the ACE Group was no stranger to the high-end personal lines market, Courtemanche points out. “Prior to the acquisition of Atlantic Mutual and the creation of ACE Private Risk Services, ACE touched affluent customers through its specialty offerings in the recreational marine, kidnap/ransom, residential builders risk and fine arts product lines.

“With the creation of ACE Private Risk Services, we’re able to offer a total account solution that enables us to integrate those offerings into a client’s personal insurance portfolio,” Courtemanche explains. “When necessary, we can draw upon the broader capabilities of ACE to handle customer needs outside of the ACE Platinum Portfolio to achieve our goal of providing a seamless customer experience.”

Building on strength

“Our goal is to make the ACE Platinum Portfolio the best product for high net worth customers through ACE’s commitment to stay close to the consumer and constantly innovate,” Courtemanche says. Billing options, for instance, include automatic payment via an American Express® card or electronic funds transfer.

“The package approach improves retention and saves work for everyone: agency, client, and company,” Courtemanche remarks. “Our product provides unique features such as full replacement cost for additions and alterations on co-ops and condos, automatic full window glass coverage and GAP coverage for leased vehicles. It also offers a deductible reserve, which adds 10% of the deductible amount to a reserve in each claim-free year. The reserve can be used to reduce the out-of-pocket deductible on the customer’s first claim.”

Speaking of claims, ACE is proud of its commitment to providing outstanding service at the time of a loss, Courtemanche asserts. “Ninety-five percent of our customers who have had a claim report being very or completely satisfied—not just satisfied—with the treatment they received,” he says.

Improving on the AMP, Courtemanche says, the ACE Platinum Portfolio includes new coverage features, raises some sub-limits, broadens coverage terms, and increases package discounts in certain states. Among the improvements are the addition of kidnap/ransom expense coverage; an increased limit for business property in the home policy; adding coverage for accidental airbag deployment and increasing coverage for loss of use in the auto policy; and providing limits up to $100 million in the umbrella policy.

“Particularly for the high net worth market, high umbrella limits are important,” Courtemanche declares. “Also, we’re offering endorsements to the umbrella policy that will cover employment practices liability in the event the insured is sued by a domestic staff member. We also offer protection for an insured who is sitting on a nonprofit board in the event he or she is sued personally. Particularly for the affluent market,” Courtemanche says, “umbrella is one of the lead coverages an agent should be selling.”

The ACE Platinum Portfolio can provide coverage for secondary and vacation residences as well as the primary residence; home coverage is written on a replacement cost basis. For higher valued items such as collections of jewelry, fine art, antiques, and wine, valuables coverage can be added to cover these items on a worldwide, all-risks scheduled basis with no deductible. Covered losses can be settled for at least the scheduled amount or, if higher, at a market value up to 150% of the scheduled amount.

Auto coverage is offered with an agreed value option and allows the insured the choice of a repair shop. Reimbursement is provided for parts produced by the original manufacturer.

Security and peace of mind are the intangibles that clients seek when they purchase insurance, and that starts with having confidence in the financial strength and stability of the company standing behind their policy. The ACE Group of Companies is distinguished in that regard, as evidenced by its A+ ratings with A.M. Best and S&P and its conservatively managed investment portfolio. The real test of a policy and the carrier behind it, of course, comes at the time of a loss, when the insurer is called to deliver on its promise.

For its high net worth clients, ACE Private Risk Services is committed to providing first-class treatment when a loss occurs. A team of adjusters is on call 24/7, and in most cases a loss mitigation team can be on the insured’s premises within two hours. Claims specialists will help the insured select a contractor to rebuild a damaged structure, review repair estimates, and arrange temporary housing while repairs are being made. Restoration and repair work is performed by skilled craftsmen, and experienced counsel are available to help resolve personal liability claims.

Distribution model

Because the ACE Platinum Portfolio is a complex, multi-dimensional product, two key goals for ACE Private Risk Services are to identify committed agent partners to distribute the product and to make it easy for those agents to do business with the company.

“We work with smaller independent agent specialists as well as the major national brokers,” Courtemanche says, “but the key factors are their commitment to and expertise in this marketplace, and their ability to provide a high level of personal risk management analysis and advice to high net worth clients.”

In the same way, ACE Private Risk Services offers agents a broad platform of services and support.

“We offer several options for agents to quote and issue policies or process endorsements,” Courtemanche says. “Agents can call or fax quote or endorsement requests, but most use AbizSM, our online account manage-ment system through which 80% of quotes and 90% of new business submissions pass. The system is easy to use and learn, and our tech support has gotten high marks in agent surveys.”

Speed and accuracy are key service goals, Courtemanche notes. “Based on long-term averages, new business policies are issued within two days and endorsements within five days, and almost 100% are free of errors,” he says proudly.

A big plus for agents, he adds, is ACE Private Risk Services’ cooperative business development program, which allows top agents to share marketing costs with the company as they build their presence at the local market level.

Untapped market

Most of us think of the very rich as people who are accustomed to demanding—and receiving—top-tier service in all aspects of their lives. While this may be true of individuals who have inherited family wealth, many of today’s high net worth clients come from modest backgrounds and are still carrying the garden-variety personal lines insurance they purchased when they were just starting out.

“Up to 70% of high net worth clients are still insured with direct writers and may have coverage that is inadequate for their needs,” Courtemanche observes. “Agents have a tremendous opportunity to reach out to and educate these clients about the advantages of working with an independent agent or broker to identify their personal risk management needs.”

Courtemanche estimates that the high net worth personal lines market is worth close to $30 billion in premium and is continuing to grow.

“We have many enhancements planned to our ACE Platinum Portfolio coverage and service offerings to continue to be at the forefront of serving the needs of high net worth customers,” he asserts.

For more information:
ACE Private Risk Services
Web site: www.aceprivateriskservices.com