Insurance for high net worth clients regains momentum despite social distancing

After a setback triggered by the first lockdown in March 2020, MGAs’ sales of life and health insurance for high net worth individuals and financial planning cases have regained momentum.

In summer 2020, Financial Horizons Group (FHG) President and CEO Nick Pszeniczny told Insurance Journal that he wanted to step up sales to high net worth clients. Almost a year later, Denis Blackburn, president, Québec region at Financial Horizons Group, says the shift is underway.

The Québec-based organization thus executed this cultural change in the thick of the pandemic. Its roots in Excel Force Financiere grant the firm a strong foundation in the middle market. "Large cases have been growing since early 2021,” Blackburn says. 

“We're not letting go of our existing sales force; we're strengthening it,” he says. Part of this goal involved forming a strong team in Québec: Joane Bourdeau as vice president operations; Sylvie Amar as vice president product strategy and advanced markets; and Alky Ndzila as vice president sales.

"We have begun recruiting advisors active in the high net worth market. Since December 2020, we have hired four high net worth advisors out of 20 independent advisors recruited,” he says. His goal for 2021 is to double the pace of hiring these advisors.

Large cases in virtual mode  

The advanced market is fairly vigorous, despite the shift to virtual. "We’re doing very large cases,” says Kevin Cott, Chairman of Qualified Financial Services, an MGA in the Greater Toronto Area. One advisor doing business with him for 25 years told Cott that he was writing one of his biggest cases in his 38-year career.

Qualified Financial Services President Fiona Cuddy says that with the addition of larger and larger cases, the MGA has created a new role: advanced case consultant. Tony Gallippi has been hired to support the firm’s top advisors with large and complex cases.

Advisors’ response has been overwhelmingly positive, especially because they do not have to commission split with Tony, Cuddy explains, adding that they are investing in advisor growth by investing in their people. Large, complex sales are back, she affirms.

President and CEO of HUB Financial Terri Botosan says the pandemic has not stopped her from growing the managing general agent's presence in the high net worth market.

“Ten years ago, we were very entrenched in the middle market. But our business really evolved, due to the fact that we have not only grown organically but also through acquisitions. We have a very broad offering and advisor base and do a very good job both in middle and advanced-market,” she explains.

Boost from insurers  

PPI President and COO Jim Virtue was impressed with insurers' responsiveness in quickly increasing insurance limits during the first lockdown, announced in March 2020. “Insurance companies were quick to advance with new technologies and made more progress in one year than several years prior to that. Most carriers also increased their underwriting limit without fluids, which was of great assistance during the lockdown. Some of those companies have now made these changes permanent,” he adds. 

“Insurers now offer a lot of latitude in the limits and have improved their virtual meeting systems,” says Gino-Sébastian Savard, president of MICA Firms in Brokerage of Financial Services. “They're not going revert to the old ways. Their stance stoked support considerably. Veteran advisors were reluctant to embrace digital sales, but they had no choice.”

Phil Marsillo, President of IDC Worldsource, points to insurers' expansion of no-medical-exam coverage as another good habit to maintain post-pandemic. Christian Laroche, President of Québec Operations for IDC Worldsource/Aurrea, attributes the firm’s strong performance in 2020 partly to the increase in the number of high net worth cases at IDC Worldsource/Aurrea, compared with past years.

At Financial Horizons Group, Nick Pszeniczny says he's hopeful these offerings will continue. “COVID has helped improve the digital platform offerings of all insurers.” He mentions relaxed underwriting rules, the elimination of testing and smarter underwriting through artificial intelligence, among other measures. He says these improvements have allowed advisors to offer their clients reasonable coverage amounts, despite lockdowns.