Africa's fast growing group of high net worth individuals demand tailored insurance solutions

The rapid growth in the number of millionaires on the African continent is resulting in a rising demand for financial services solutions that meet the specific requirements of these high net worth individuals.

Recent figures show that the number of wealthy individuals in Africa grew faster in 2010 than in any other region. Africa's total of super-rich (people with investable assets of $1-million or more) grew by 11.1% last year, considerably faster than the global growth of 8.3% and also faster than the Middle East's growth rate of 10.4%.

According to Mandy Barrett, Manager of Product Solutions-Marketing & Sales at Aon Risk Solutions, the rapid growth in this market, accompanied by asset accumulation, has translated into an increased requirement for insurance cover, with the company seeing an increase of 175% in high net worth individual products used over the past two years.

Barrett says that this market requires a very tailored and specific approach by brokers and insurers involving a detailed needs analysis in order to understand the individual’s insurance needs and service preference.

“By analysing each client individually, it is possible to provide specialist advice in terms of risk absorption, risk mitigation and risk transfer. This enables the broker to recommend a tailored insurance and risk management solution from a range of products specifically designed to meet the needs of the high net worth individual. By doing this, clients are able to reduce risk as well as the price of insurance premiums.”

Barrett says that the private client insurance market is exceptionally demanding and high net worth individuals expect the best when it comes to the product and service offering. “Time is a valuable commodity, and in today’s highly competitive and fast-moving environment, clients are tired of service promises and call centre queues.”

She says that an insurance claim can be an extremely traumatic and time consuming event, so private clients expect their insurance provider to deal with the issue in a manner that is painless and does not inconvenience them. “Call centres have created efficiencies in the financial services industry but they often fail in providing the level of service and accountability the high net worth client demands.

“High net worth individuals demand and receive personal, fast, efficient and seamless experiences when it comes to their personal insurance. Consumers are becoming more sophisticated and knowledgeable about their insurance needs and want to build long lasting relationships or partnerships with their insurance broker.”

Barrett says that one of the benefits of writing covers in the high net worth space is that clients appreciate the need to maintain and protect their assets and lifestyles. “Wealthy clients implement high-tech security measures in their homes to minimise the chance of burglary. They will also often reside in secure estates where the risk of break-in is further reduced. Private clients who have this approach to managing potential risks tend to attract greater insurance benefits and servicing propositions.”