Are there still opportunities for brokers in the High-Net-Worth segment? Christelle Colman, CEO/ Founder of Ami Underwriting Managers, thinks so and shares her reasons for being optimistic.
Tony: We are specifically talking about high-net-worth insurance and the opportunities and challenges. South Africa is a country of significant differences in terms of income, with much talk of the wealthy leaving the country. From your experience in this segment, which you will be targeting with AMI, please give us your views?
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Christelle: High-net-worth insurance must be my favourite topic to discuss! My first stint at MUA was in 2004, when we launched SA’s first real high-net-worth policy to the independent broker market. So, I have many years of experience in this market segment, and I have seen it grow from an exciting new market segment with very few players to today, where we have quite a few competitors in this space.
Many people ask me what Ami means. Ami Underwriting Managers is a new UMA we are launching to the independent broker market in October 2022. Ami means friend in French, but it also means my nation in Hebrew and much loved in one of the Hindu dialects. Friends are there for each other in good and bad times. They’re reliable, compassionate, and understanding. They know and live in each other’s worlds. This is the vision of Ami… to be a friend to brokers, clients, and communities by providing straightforward, easy-to-understand, and socially aware insurance.
I absolutely believe that there is much more opportunity in the high-net-worth space. Otherwise, why would I leave a very secure job in a company I started to do it again? There’s an opportunity to do it better and improve on current offerings. Every time a step closer to what our policyholders and brokers want.
One of the reasons why insurance is a grudge purchase is because we give our clients too many surprises at the claims stage, already a very traumatic time for them. Insurance is complicated, and it is complex to deal with insurance companies. It is not easy to get hold of insurers; it is not easy to understand the policy wordings. Even though most personal lines wordings have been adapted to plain language, the wordings are still very long and cumbersome to read. At Ami, we will focus on making communication on all levels accessible, making processes easy to navigate, and providing service as fast as possible without overcomplicating things. All of this will be supported by the best people we can find in the industry using digital tools to always enable service excellence.
Those are just a few reasons why I think there’s an opportunity for us to do wealth insurance better and easier.
Tony: In this segment, although advice and personal relationships play a crucial role, technology also plays a key role. How do you manage to merge and balance those?
Christelle: If we look back over the last few years, including the many technology conversations we have had with you, technology has undoubtedly been a differentiator for many of the underwriters and insurers.
Research shows that technology is not a single differentiator anymore; it is simply a ticket to the game. And for us as underwriters, what we need to do now is to use technology to make it easier to do business with us so that we can bring our skills and expertise to the forefront quickly and efficiently.
15 years ago, when we were underwriting motor insurance, a broker would fill in a one-page form; we did not even ask for an ID number or much else. It was just the date of birth, occupation, the value of car, and where you live. Then it was sent through to a quote desk, and someone sent you a quote within half an hour. Now you must capture pages of date fields with many complex rating factors. We have complicated pricing to a point where you need so much information, making the process longer and more difficult. While I agree all of this is very important to manage underwriting results, we must admit that technology does not always help in improving the service experience to the end consumers – especially in the intermediated space.
We want to not use technology to differentiate us per se, but to instead focus on the service vacuum that exists in our industry and make doing business with us as easy as possible. Ami wants to step into this service vacuum and help our brokers to service our collective clients more efficiently. You must be able to contact us through any channel you prefer; phone, email, WhatsApp, online chats, etc. We have built a very efficient multi-channel communications platform that will, in our view, give us a clear strategic differentiator.
Tony: You are clearly optimistic about the high net worth segment of the market but considering the current economic environment, do you still think there is an opportunity in that segment?
Christelle: There are several reasons why we believe there is still considerable opportunity in the wealth insurance segment in SA. Apart from the growing middle class, there is growth from gen Z and the young millennial segments that are moving up in life and needing more sophisticated insurance solutions. Furthermore, although we have many high-net-worth underwriters, the insurance interpretation of the market segment is not adequately defined, as for instance, in the banking industry. The generally accepted global definition of an HNWI is a person with a net asset value of more than 1 million USD or a Dollar millionaire. Regarding insuring individuals in the wealth segment, we do not consider net asset value but insurable assets, whether financed or purchased in cash. It broadens the segment quite significantly.
We have seen that individuals with complex personal asset portfolios are often insured on perils-based policies in the direct space. We believe that a more significant and complex portfolio needs a deeper level of understanding and advice from a broker on the various offerings available in the market, including insured property valuations services which are vital to combat the effect of underinsurance. As a result, insurers with HNWI products and specialist underwriters are still seeing good growth as these HNWI clients migrate to the correct policy offerings. There is still scope for growth in this regard.
Lastly, in many established markets, there is an opportunity for a new entrant to come in and do things slightly better and to take some business away from the established players.
Tony: Just in closing, an update on going to market?
Christelle: We are planning to launch to market in October 2022. As Marcus Aurelius, former Roman emperor, said, “To go fast, you have to go slow.” I think it is vital to spend time on the build to ensure that you have your house in order before you open that front door for business.
We will not be doing direct business, and we will not just be doing high net worth. We have two products; the Ami Personal Plan and Ami wealth Plan, and we will blow your socks off with our innovation. We are incredibly excited to tell you more about it in October