ADVERTORIAL: BESPOKE PERSONAL COVER

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BESPOKE PERSONAL COVER IS THE NEW ‘IT’ FINANCIAL PRODUCT AMONGST HIGH-NET-WORTH INDIVIDUALS – HERE’S WHY

Alanis Morisette once sang about the paradoxical nature of life in her hit song “Ironic”, a context that is evident for many high-net-worth individuals (HNWI) in South Africa today. As the largest wealth market in Africa, South Africans are able to claim US$636 billion in wealth. Approximately 42% of this is held by its 38 400 millionaires or HNWIs, says New World Wealth’s SA Wealth Report 2020. These busy high achievers with affluent lifestyles generally have net assets of US$1 million or more and may own multiple residences, luxury cars, wine collections, one-of-a-kind jewellery and other fine or high-value items. 

Which is why these families and individuals of good fortune are more likely to be faced with several distinct challenges, says Worth.com, most notably that of physical and collectables security, investment, and weather-related damage. Many insurance products aimed at HNWIs span decades yet do not account for the changes in technology and the diversification of asset classes brought about by the 21st century and the Fourth Industrial Revolution (4IR). This is only further exacerbated by other circumstances that are unique to South Africa, such as load shedding and South Africa’s status as the fifth most dangerous country on earth. The global impact of the coronavirus on wealth and employment also presents a growing concern as markets experience flux due to ongoing lockdowns across the world.

Over the last decade, New World Wealth reports that South African HNWIs have moved away from investing in real estate towards equities and alternatives, with equities accounting for 29% of their assets. While real estate still remains a large category at 25%, other prominent asset classes include business interests (20%), cash and bonds (16%), alternatives such as foreign currency, commodities and venture capital (8%), and collectables (2%). Additionally, South African HNWIs often invest offshore.

These individuals – comprised of business executives, successful entrepreneurs, medical professionals and accomplished artists, amongst others – often juggle high-value properties, travelled extensively for both work and leisure before the global COVID-19 pandemic but now invest in boats and upgrading their homes, and spend their discretionary income on fine art, luxury watches and the like. They also can’t afford to deal with complicated and time-consuming claims processes or having to frequently call their insurance professional to update their policies each time they acquire a new asset.

And since they live such multilayered lifestyles, they also face considerable risk if their properties and possessions are underinsured, especially since many large residences have complex systems that traditional insurance policies don’t cover. For those who are also public figures, liability coverage and a claims process that prioritises privacy are essential. 

Understandably, HNWIs have a lot on the line and could face a significant financial impact if given the incorrect advice. Therefore, they would be best served by insurance that fits their circumstances, and that is efficient and discreet when it comes to handling claims.

Enter the bespoke personal cover insurance.

Whereas clients of traditional insurance products may find themselves dealing with a number of consultants and having to undergo a waiting period to access funds, clients of a bespoke insurance product can count on a dedicated team of expert claims and service consultants that are always available. The approach is more customised and provides myriad coverage solutions that are tailor-made yet easy to understand. For example, Santam’s Executive Product has a simple excess structure while premiums are calculated using scientific ratings and the individual’s own risk profile to ensure competitive rates. Bespoke insurance cover is also more extensive, with higher limits, and includes cover for contents on an all-risks basis and with flexible worldwide cover, which automatically provides cover when an HNWI adds an item to a collection or travels with their assets.

With key long-term risks for South African HNWIs remaining personal and asset safety, it’s imperative to consider innovative and customisable solutions that speak directly to an individual’s concerns. By offering personalised services and added value, bespoke personal insurance will allow HNWI clients the ability to pursue their passions while having peace of mind that risks to their assets are mitigated properly. 

For more information about the unique benefits of the Executive solution, speak to your intermediary or visit www.santam.co.za.

Santam is an authorised financial services provider (licence number 3416).

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