HNW brokers – a breed apart

High net worth brokers are a special breed. As Aston Scott chief executive Peter Blanc says: if you phone up to insure your Stradivarius, you don’t want your broker to ask, “What’s a Stradivarius?”

Blanc has a busy year ahead of him. The broking boss is preparing to merge his business with Lark Group, in a move that will see the two entities become known collectively as Aston Lark.

Blanc took some time out of his busy restructuring schedule to join Insurance Times to discuss HNW home and contents insurance, and explain what sets HNW apart.

Non-standard warranties and terms and conditions

“Normal household insurance is remarkably straightforward, but high net worth policies come with quite a lot of standard warranties and terms and conditions,” says Blanc.

Blanc gives the example of a homeowner being expected to set an alarm if they have stated that they have one in their policy, or risk not being covered.

However, the case in HNW situations is quite different.

“In the HNW arena, you’re dealing with people with much larger properties and much more significant assets,” he explains. “Generally, when you get into that space it’s very difficult to police what goes on in those sorts of houses. So, the underwriters that we deal with must understand the nature of the beast.”

“The underwriter must understand that if you are dealing with somebody with a country estate, set in the middle of 50 acres of Norfolk, expecting every single window to be locked and expecting the alarm to be set every time the house is unoccupied is unrealistic. So those underwriters take a different view. They charge more money, but they take a different view about how the people live.”

Customer expectations vary

HNW customers have vastly different expectations to most consumers, says Blanc.

Some people can be very demanding, he admits: “When lady so-and-so phones up and wants to add on a piece of jewellery, the answer has got to be yes and then find a way of getting it sorted. The answer can’t be no or send in some paperwork and we’ll think about it.”

“When a HNW individual is getting a quote, they have to be dealt by with someone who can talk their language,” he continues. “If they say they’ve got a Vermeer, they don’t expect the person at the end of the call to say sorry, you’ve got a what? If they say: oh, and my son’s a keen musician and he’s just bought a Stradivarius, then frankly, they expect the person they are talking to to understand what a Stradivarius is.”

To tackle this, a broking office, which is the first port of call for the client, has to be “capable of conversing at all levels of society”.

Crucially, they must also have facilities with underwriters who are able to find the right solution for a client.

It is also critical that customers are dealt with properly at the claims stage.

Blanc explains: “If someone in a country mansion has a water damage claim then you cannot send the bloke from Carpetright round to replace the floors.”

“When there’s a claim, as an underwriter you have to be pragmatic, sensible, but your overriding desire has to be: how can I make this client as happy as possible? It may seem counter-intuitive to an insurance company to be thinking: how can I pay more on this claim?”

“It does feel completely counter-intuitive,” Blanc continues. “But, as a business model, it works, because if you look after your HNW customers, they will refer people to you left right and centre.”

No threat from direct

Although he deals in bespoke policies for the super-rich, Blanc is complimentary about direct underwriters and the positives of direct channels.

“For the vast majority of the population, actually buying their house insurance online would be perfectly satisfactory. But in the HNW space, I’ve yet to see an offering that’s appropriate,” he says.

Blanc points out that there is a huge price difference between a house insurance typical policy, which could be £150 annually, while a HNW policy could be £3,000 to £4,000.

At this stage, according to Blanc, the product is just too dissimilar for direct selling to work. The claims journey is very different and going direct can lead HNW clients to pay too much on their premiums, or miss out on valuable advice.

A stand-out service

For Blanc, the most interesting thing about HNW is what a “big opportunity” it is. There is a huge gap in the market, according to the broking boss, where people who should have HNW policies are lacking cover and have standard policies.

He thinks brokers need to shout more about their services and the differences between standard and HNW policies, so that customers don’t lose out in the long run.

After all, if they do get refused at the point of a claim, unfortunately – or perhaps fortunately for them – HNW customers have more than most of us to lose.