Insuring the ultra-rich is a $40 billion business

It's tricky to price a collection of shrunken heads

Privilege Underwriters Reciprocal Exchange (PURE) in White Plains, N.Y. works with just 50,000 policyholders but expects its 2015 premiums to reach $500 million.

And that’s just a drop in the $40 billion business of insuring the toys of the ultra-rich.

Read: High net worth personal lines clients can lead to good commercial business

One percenters are often willing to spend a pretty penny on protecting their homes, boats, planes and wine.

“From an insurer’s perspective, you can only dream of people who care that much,” Ross Buchmuller, PURE’s CEO, told Bloomberg.

An art collection valued at $1 million could cost $1,000 in annual premiums. A jewellery collection worth the same amount would have higher premiums, since it’s easier to lose or steal a cushion-cut diamond than a well-protected Dali. And Ace even insures a collection of shrunken heads, which is perhaps the most challenging to price since it can’t be replaced easily.

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