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How to Sell It: High Net-Worth Homeowners

Most homeowners haven't grasped a true understanding of their growing insurance needs in a burgeoning market—and that’s good news for independent agents who are eager to grow their books.
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After a rough couple of years, the homeowners market is finally on the upswing. But that doesn’t mean consumers have grasped a true understanding of their growing insurance needs—and that’s good news for independent agents who are eager to grow their books.

“The majority of U.S. homeowners do not have the right amount of insurance,” says Jerry Hourihan, executive vice president and chief marketing officer for AIG personal lines in the U.S. and Canada. “If they were to face a severe loss, they could be out of pocket tens or hundreds of thousands of dollars because their homes are under-insured.”

The high net-worth homeowners segment in particular is brimming with possibilities for agents to defend against worst-case scenarios. “There’s a huge opportunity in the affluent space that we play in,” Hourihan says. “It’s demographically a very strong segment that, despite the economy, has continued to grow. With the catastrophe activity over the last few years, the awareness levels and the desire for consultative comprehensive insurance solutions—not to mention exceptional claims service—are much higher than they used to be.”

But while the market has plenty to offer independent agents, catering to affluent homeowners requires significant effort and attention to detail. How can agents make sure they remain competitive in the high net-worth homeowners space?

“It’s important for independent agents to understand the emerging issues of their clients so they can appropriately place them with the right insurance carrier,” says Brian Milnamow, vice president of personal insurance product management at Fireman’s Fund Insurance Company. “I think the policyholder that is willing to go the extra mile to protect their property and their family can generally get rewarded.”

Whether that means finding related discounts to the overall homeowners policy or providing service that goes above and beyond the norm, agents will need to pay close attention to which options and choices they present to their most successful clients.

“In the high net-worth space, it’s important that agents feel comfortable with a company’s underwriting approach and overall flexibility when presented with a unique customer request,” Milnamow says, noting in particular the connection between the homeowners policy and more distinctive high net-worth needs, such as private collections coverage. “Obviously with catastrophe activities, they also need to be incredibly comfortable with the company’s approach to claims.”

The high net-worth homeowners market also involves a greater focus on smart home technologies like intelligent lighting, AV control, climate control and more—an area Milnamow says continues to rapidly evolve. “As insurance companies pay more and more attention to property-specific characteristics, an agent that is in tune with their clients’ major home projects will be able to make sure their clients are getting the most favorable rates,” he explains.

Doing so will require agents to research marketplace offerings that provide tailored solutions to customized needs. “The biggest thing independent agents can do is just understand their markets and the ancillary services and coverages that are being offered,” says Kate Sutton, zone distribution manager for high net-worth personal insurance at FFIC. “Agents need to make sure they’re really taking that consultative risk management approach to their clients, so that when clients do have these discretionary funds, they’re with the carrier that’s going to adequately protect them for those investments.”

Regardless of strategy, affluent clientele comprise a demographic most independent agents simply can’t afford to ignore. “There’s a big opportunity for agents to step in and develop expertise in the high net-worth segment or grow their businesses,” Hourihan says. “We’ve seen significant growth in the last few years in agents focusing on this segment. So I think that’s a trend that’s here to stay, and will be there for agents for many years to come.”

Jacquelyn Connelly is IA assistant editor.