It can be daunting to find a qualified, trustworthy property and casualty insurance advisor—one who not only meets your family or family office’s up-front needs, but also aligns with your sensibilities. The selection process can be further complicated without firsthand proficiency in insurance industry standards, trends, and best practices.

Before the search begins, look inward.

Identifying the best- fitting advisor will depend a great deal on what is most meaningful to you. Use your family’s lifestyle and risk profile as a guide, and prioritize the most- important attributes, such as discretion, global reach, or other relevant criteria.

Next, think practically. Are you receiving the services your family/office needs? Do they periodically present options as needs or circumstances evolve?

Each family is different.

Families can range from one G1 household with a single home and two cars, to many generations with multiple properties, collections, and other assets. Your chosen insurance advisor’s capabilities should align with the complexities of the family’s assets and activities.

Be proactive…and expect that in return.

Transactional relationships are not substantial enough to properly devise and manage a family’s risk management program. You’ll want to develop a year-round, holistic relationship that supports the organic way questions or concerns may arise.

The way a family buys insurance can matter.

Buying together is a great way to increase leverage due to size and spread of risk. It may also be challenging if there are not shared risk appetites, willingness or ability to self-insure, and interest in implementing loss prevention best practices. Just as you may encounter in your family office, working style, location, and personality should also be considered when selecting the right insurance advisor.

Navigating the insurance provider landscape.

The insurance provider landscape consists of advisors and insurers. Like families, not all insurance advisors and insurance company offerings are the same. Most of the personal insurance industry is focused on providing products to the masses. Consequently, most advisors and providers don’t have the expertise and offerings needed by families and individuals with substantial wealth and/or a public profile.

Insurance advisor relationships to insurance companies can be independent or direct. Independent advisors are appointed by, and have access to, multiple insurance companies, while direct- writing advisors only represent one insurer, which limits choice.

Consolidate your program with one independent insurance advisor.

High and ultra-high net worth families should work with independent insurance advisors to ensure the broadest choice of coverage and services. Advisors can be local, regional, national, or global. Their geographic footprint and reach should correspond to families’ preferences and needs. Advisors should also have commercial and specialty insurance capabilities to ensure access to expert solutions when needed. These capabilities are particularly important for wealthy families with complex exposures not anticipated in standard personal insurance products. Experience with London markets, such as Lloyds, and/or alternative risk transfer methods, e.g., captives, can help address high-risk exposures.

Size matters.

The number of customers and premium volume with insurers who specialize in serving high and ultra-high net worth families is a good indicator of the advisor’s experience with clients like you, their leverage with insurers, and the number of choices they can provide. Sometimes, an insurance advisor accesses insurers through a wholesaler. This can indicate they don’t have sufficient business to warrant an appointment with insurers specializing in this customer segment.

Service capabilities are paramount.

Even if the insurance advisor organization has the capabilities, understand how and who will service your family’s account. Do they take a consultative and holistic approach; for example, do they ask about net worth and estate planning? The tenure of key staff and team structure is also important; turnover can lead to a lack of continuity and client dissatisfaction. Their client management platform should ensure continuity of service.

Make sure to understand the advisor’s servicing team structure. How do they manage client programs? What is the team’s experience and expertise with clients of a similar profile? What sort of client management platform do they use? How do they handle customer service agreements or contracts?

Finally, make sure you have a clear explanation of claims handling, safety, loss control, ongoing account management, family education, and their approach on how and when they will bring your program to market.

Demand transparency.

Transparency helps ensure alignment around each family member’s needs and preferences. This includes compensation arrangements (commission and any contingencies paid by insurers vs. client-paid fees), an understanding of the services and who will be providing them (advisor, insurer, third party, etc..). Willingness to provide references is customary among best-in-class advisors.

Time to make a change.

When you decide it’s time to change your insurance advisor, there are many considerations. Learn by asking the right questions or conducting an in-depth request for proposal (RFP) process.

• How do you find a “short list” of qualified advisors that meet your needs? Family office organizations such as FOX know the insurance advisors and providers who specialize in serving high and ultra-high net worth families.
• How do you know which insurers would be interested in your family’s program? The right advisor will inform you of all insurers specializing in serving families like yours.
• Where can you find an unbiased and confidential third-party to guide your family? There are fee-based insurance consultants who help clients make informed and strategic insurance buying decisions, designing programs to maximize coverage and manage costs.
• How often should your program be brought to market? At least every three years - more frequently if the family’s profile or insurer marketplace changes significantly.
• What is the best process for initiating an RFP?
  • Engage key stakeholders to understand priorities and preferences.
  • Select three to five insurance advisors who specialize in family offices.
  • Conduct a blind RFP process where your name is not disclosed.
  • Provide an account overview to help advisors propose their service approach.
  • Ask questions to gain insights into the insurance advisor’s practices, qualifications, and performance.

In summary, a best-in-class insurance advisor will:

• Propose changes aligning with your family's changing needs.
• Periodically test the insurer marketplace for new coverage solutions aligned with your needs.
• Provide choices in your insurance and risk management program.
• Be transparent with compensation received on your account.
• Educate your family on trends, emerging exposures and solutions, risk avoidance and reduction methods.

For more information see:

Insurance Program Evaluation, Request for Proposal (RFP) and Selection Best Practices

Best-In-Class Insurance Advisors: A Checklist