Old Mutual Insure introduces specialist division to service high-net-worth customer needs

Cape Town, 19 July 2018: Elite Risk Acceptances, a specialist underwriter and wholly-owned subsidiary of Old Mutual Insure, is a new entry into the high-net-worth insurance market which will be providing bespoke short-term insurance and personal risk solutions to wealthy individuals, backed up by over 180 years of insurance experience, from 01 August 2018. Christelle Colman returns to the short-term insurance sector to head up the new entrant.

South Africa’s wealthy population is on the increase, according to New World Wealth’s 2018 South African Wealth Report, which reveals that at the end of 2017 there were 43 600 high-net-worth individuals (HNWI) in South Africa – up 8% from 40 400 in 2016. HNWI are categorised as people who have a total wealth of more than US$1 million (R11, 93 million). These wealthy individuals have unique personal and asset risk management needs requiring specialist cover.

Hannes Wilken, Old Mutual Insure acting Chief Executive Officer, says the time was right for a specialist high-net-worth offering within the insurer. “We realised that the affluent market sector had increased considerably and we needed a service offering that was tailor-made to the specific needs of this market. Striving to always improve our value proposition to intermediaries and customers remains our objective and this development was a natural next step for us.”

The population of ultra-wealthy – those with a wealth of US$50 million or more – is also on the rise. As at the end of 2017, South Africa is home to 2 200 multimillionaires, each with net assets of US$10 million (R119,3 million) or more, and five billionaires each with net assets of US$1 billion ($11,93 billion) or more.

Christelle Colman, Managing Director of Elite Risk Acceptances says that they realised this market has very specific needs and whilst there are a number of players currently in the segment, the market is seeking a more comprehensive offering underwritten by a blue-chip insurance brand such as Old Mutual Insure.

“We also did extensive market research into the distribution model required for this segment. Following our findings, Elite Risk Acceptances will follow an intermediated omni-channel business model, ensuring that our brokers and customers have highly skilled professionals to advise them in the most efficient manner possible, with the added benefit of broker and client interaction at claims stage.

“The biggest value proposition of our offering is that we will be taking a proactive approach to risk management and will be providing a full asset valuation service,” says Colman. Elite will appoint independent professional assessors to visit each client to determine the accurate insurance replacement values of both buildings and contents at policy inception. This will alleviate many of the challenges typically encountered at claims stage, as the current application of average condition is a complex insurance calculation not always understood by policyholders.  “We understand that with larger assets, the complexity of determining adequate insurance coverage increases, so we built our business model around addressing this issue,” adds Colman.

One of the key characteristics of this segment is that they are highly mobile and spend a lot of their time traveling, be it for business or leisure, says Colman. “We identified this trend and realised there was a real opportunity in the market for a new, more refined and competitive travel insurance offering within the South African market. Elite clients will be able to take out annual travel insurance cover for their business and personal travel needs as part of their personal insurance policy.”

The international travel cover will not only be for the insured, but for the whole family. Medical assistance will be provided through partner Europ Assistance, and policyholders will have the added benefit of concierge assistance services anywhere in the world.

Colman goes on to say that for clients with art collections and other collectibles that are particularly difficult to value, Elite will have a panel of experts available to assess the value of their assets. “This service complements Elite’s bespoke insurance cover perfectly enabling a seamless insurance experience should things go wrong.”

Colman adds that Elite Risk Acceptances will be introducing a number of first to market insurance features built into their product. “Motor insurance is a very important consideration in our chosen niche. Elite will be introducing an innovative new feature, the trade-in protector cover, it is essentially gap cover for vehicle depreciation following a partial loss or accident.

“We know that many wealthy individuals don’t like to drive cars once they’ve been involved in an accident, no matter how small.  They will now have the option to trade in the vehicle following an insured incident and the Elite policy will cover the gap in value created by the loss in trade-in value as a result of the accident.  We are excited about this innovative new product feature as we believe it will add real value to our clients, ensuring true reinstatement takes place following a motor claim.” adds Colman.

As many vehicles in South Africa now have self-driving features, the Elite policy will also cover accidents that occur while a vehicle is in self-drive mode, for instance when parking. There will even be a mobile application that will allow customers to track their vehicle once towed as well as request a hire car which will collect them from the scene of the accident.

In line with the global growth of cryptocurrencies, Elite will also cover theft of cryptocurrency as a result of hacking, says Colman, adding that another first to market is cover for the loss of cash as a result of phishing.

Elite will launch their innovative new offering to market on the 1stof August 2018.  Please direct all queries to Christelle.colman@eliterisk.co.za.