The percentage of a family’s wealth invested in tangible assets, such as property, art and cars, has doubled on average over the last year following the drop in the investment markets, according to Aon Private Risk Management (APRM) – the leading insurance broker for the ultra high net worth sector. In response, APRM has launched an insurance risk auditing service to provide impartial, professional advice to families, trustees and organisations that manage extensive private insurance programmes with an annual premium over £40,000.
The risk audit service is a three-step process, which starts by reviewing the current exposures faced by the family in relation to the following areas:
- Tangible assets – property, fine art/jewellery, private aircraft/yachts
- Liabilities – public and property owners, employers, directors
- Personal well-being – travel/medical, kidnap and ransom, security, reputation.
Once this information has been collated and the exposures identified, it is cross-referenced with the current insurance programme, to establish if the existing arrangements are:
- Appropriate for the type of exposures identified
- Without gaps or overlaps in cover
- Utilising full market leverage
The findings of the audit are published in a report that is given to the family or its adviser during a closing consultation.
Charles HamiltonStubber, managing director of Aon Private Risk Management, said: “Investment volatility has meant families are placing more emphasis on protecting their tangible assets. In turn, the role of the insurance broker has become key to insulating wealth by educating and boosting understanding on tackling risks. As confidence has been lost in some elements of the financial services, insurance brokers are in a strong position to respond and offer effective advice on protecting wealth.”
Harry Dawe-Lane, executive at Aon Private Risk Management, added: “Following a decade of prosperity the size and value of a family’s portfolio of insurable assets has significantly grown. During this period the insurance may not have been reviewed and updated, which can mean sums insured are incorrect and there are gaps or duplications in cover. Policies may be placed with numerous insurers with no attention having been paid to premium saving opportunities by utilising market leverage. Worse still, wordings may be old fashioned and outdated or just inappropriate for the risk insured. We wanted to create a service at the forefront of the ultra high net worth market that would provide the necessary due diligence to eliminate these issues where possible.”
