According to Michael Petersen, CEO of Risk Benefit Solutions (RBS), the SA insurance industry has witnessed an increasing number of high-net worth individuals (HNWIs) seeking more personalised services and risk management procedures. This has resulted in local insurers having to modify their current offerings to cater for the unique needs of this market.
Petersen says that the rise in HNWIs in the country, coupled with rising crime figures, has led to a growing need for specialised and tailored product offerings suited to the profile of this audience.
The New World Wealth Africa Report 2015 revealed that the number of dollar millionaires in South Africa approached 50 000 over the past year, and estimates that by 2017 this number will grow by 19% to reach approximately 55 000 dollar millionaires.
“Similarly, as this audience grows in numbers, so do the risks in the South African environment which we need to safeguard ourselves from. Increasingly we are hearing of cases of South Africans falling prey to more sophisticated crimes, such as cybercrime and identify theft. International research shows that the more affluent the market is, the more susceptible these individuals are to such crimes,” says Petersen.
He points to a fraud related report conducted in 2010 by Experian in the United States, which states that the wealthiest households are more likely to be identity fraud victims (43%), compared to middle-class households (13%). Petersen explains that HNWIs often have prominent public profiles, thereby increasing the chance of exposure to theft, fraudulent activity, and kidnap and ransom.
He says that developing tailored and unique risk management processes can be a very complex process, and should be addressed in a holistic manner to minimise the various risks that these individuals face. In order to service this growing market, RBS has launched a High Net Worth Insurance offering, Signature, which is geared at a more simplified approach with a service focus, delivering holistic solutions for the ever-changing needs these individuals may have.
“This product has the cover normally associated with a personal policy, but has been re-designed, with many unique enhancements and numerous additional benefits, such as identity theft cover and Director & Officers liability, as well as personalised assistance, to name a few.”
He adds that apart from enhanced options, it also has the flexibility to take each individual’s unique risk needs into account.
“HNWIs often own more than one house or car, and usually have integrated structures in place, for example businesses linked to trusts, or shares that are owned within companies. Such complexities require offerings that take various circumstances into account, as well as ensure that high value items, such as jewelry, collectibles or vintage cars, are appropriately covered.”
Petersen adds: “We expect the need for this type of product to continue to expand in the country as the HNWI market grows. To service the market efficiently, we have created a team to provide a private service approach as it is crucial to understand the demands of this complex and fast moving market.”