HNW Collectors Underinsured, Survey Says
High-net-worth individuals invest in valuable collectibles and more than half intend to increase their collectibles in the next year. Yet, 38% of collectors do not have all of their valuables insured, says a new survey by ACE Private Risk Services.
High-net-worth individuals and families with $5 million or more in investable assets are passionate about their collectibles, whether it is a smattering of items of one type or a serious collection in one or more areas, such as jewelry, fine art, wine, antiques or other items, ACE says.
Most collectors (90%) say the intrinsic value or beauty of the item is the reason for owning the collections, and half said their favorite item held that status because of personal sentimental value, according to ACE.
Almost three-quarters (74%) add that the investment value also is a primary reason for collecting, with 44% having collections worth $1 million or more and two-thirds anticipating their investments will increase in value. Particularly after 2008, high-net-worth individuals turned to collectibles to diversify their portfolios, the survey shows.
The ACE Group provides specialty coverage for homeowners and individuals with emerging or established wealth, and conducted the ACE Private Risk Services Survey on Passionate Investing by Wealthy Households. The survey of 168 high-net-worth individuals shows 94% of them own some items of significant value while 57% consider themselves serious collectors of one or more types of items.
However, the ACE survey shows gaps in protecting the collectibles. One-third of the respondents are insured by mass market carriers that "often lack important coverage features to guard against temporary fluctuation in the market value of collections and breakage of fragile articles," the survey says.
Risk consultants have not been engaged by 40% of the collectors to help determine the safest way to store or display items and guard against theft, and nearly one-third do not update the market value of their collections on a regularly or timely basis.
On The Move
Barbara A. Pietrangelo of Ada, Mich., has been named the 2011-2012 Million Dollar Round Table Foundation president. Pietrangelo is a 13-year MDRT member with seven Court of the Table honors. She will be the 46th MDRT Foundation president. The MDRT Foundation is the philanthropic arm of MDRT, an association of nearly 36,000 financial professionals from 78 countries.
NAS Insurance Services has launched an Entertainment and Sports Division and appointed Jerid Schmickle as its senior vice president. The division will target risks within the entertainment, hospitality, media and sports industries.