Lisa Berry, Senior Underwriter at Bspoke Private Clients, explores how a new generation of collectors is changing our perception of valuable possessions – and why Private Clients insurance needs to evolve with them.
When we think about the possessions traditionally associated with a High Net Worth insurance policy, certain things immediately spring to mind – fine art, jewellery, watches and antiques.
But what happens when one of the most valuable collections in a client’s home is a set of Pokémon cards?
It might sound unusual, but it is increasingly representative of how the Private Clients market is changing.
“The important thing for us as underwriters is not to have a preconceived idea of what a valuable should be. If it’s valuable to the client and has a significant financial value, we need to understand it and make sure the insurance reflects the risk.”
A new generation of collectors
As a younger generation of clients builds and inherits wealth, the profile of the High Net Worth customer is evolving.
Millennial and Gen Z collectors have grown up with different cultural influences, brands and interests, and that is reflected in the assets they choose to acquire.
Traditional collections haven’t disappeared, but they now sit alongside luxury handbags, rare trainers, sports memorabilia, vintage toys, vinyl, gaming collections and trading cards.
For some, collecting is a serious investment as well as a personal passion. What starts as a relatively inexpensive hobby can, over time, develop into a collection worth tens or even hundreds of thousands of pounds.
For the insurance market, that means looking beyond traditional definitions of what constitutes a valuable.
“We’re seeing a much broader definition of wealth. A younger Private Client may have significant value tied up in things that wouldn’t traditionally have appeared on a High Net Worth policy. That doesn’t make those assets any less important – it just means we need to ask different questions.”
So, how do you insure a Pokémon card collection?
The principles are actually very similar to underwriting any other specialist collection. The starting point is understanding exactly what the client owns.
For trading cards, that could mean an inventory of the collection, photographs, purchase records and details of professional grading for particularly valuable cards.
Condition can have a significant impact on value. Two versions of what appears to be the same card could have very different values depending on rarity, edition, provenance and condition.
Then there is the question of valuation.
Unlike many household possessions, the value of collectibles isn’t necessarily linked to what the owner originally paid for them. Markets can move quickly as scarcity, demand and collector interest change.
A card bought relatively inexpensively years ago could now be worth considerably more. That makes credible and regularly reviewed valuations particularly important.
“With something like Pokémon cards, you can’t necessarily look at the original purchase price and assume that’s the value today. We need to understand what the collection is worth now, how that value has been established and whether there are individual items within it that need particular attention.”
Understanding the risk
Value is only one part of the underwriting conversation.
We also need to understand where and how the collection is kept. Is it securely stored at home? Is it displayed? Are the most valuable cards professionally graded and protected? Does the client take them to conventions or exhibitions? Are cards regularly bought and sold, or sent away for valuation or grading?
The answers can materially change the nature of the risk.
Theft is an obvious consideration, but so are accidental damage, fire and escape of water. Taking particularly valuable items away from the home introduces another dimension altogether.
“As an underwriter, I’m interested in the story behind the collection. How did they build it? Where do they keep it? Do they take it anywhere? Are they still actively adding to it? Those conversations help us understand the risk properly – and they’re exactly where specialist underwriting adds value.”
The danger of assuming “it’s covered”
Perhaps one of the biggest challenges is that people don’t always think of their collections in insurance terms – particularly when something began as a hobby.
Someone who buys a £30,000 watch is likely to recognise immediately that it needs to be discussed with their broker.
Someone whose collection of cards, trainers, vinyl or memorabilia has gradually grown to the same value may be far less likely to do so.
And that is where the role of the broker becomes particularly important.
Rather than only asking clients about traditional categories of valuables, perhaps the question should be much simpler: what do you collect?
“Sometimes the client themselves might not appreciate just how valuable a collection has become. It may have been built up over 10 or 15 years, and nobody has stopped to consider what it would actually cost to replace today. That’s where a good broker conversation can uncover something really important.”
Private Clients is changing
This is part of a much wider evolution taking place across the High Net Worth market.
Today’s Private Client doesn’t necessarily fit the traditional profile – and neither do their possessions.
As wealth moves between generations and younger customers enter the market, insurers need to be prepared for a much broader mix of assets, lifestyles and interests.
The industry has historically been very good at understanding established categories such as jewellery, fine art and antiques. The challenge now is applying that same specialist approach to newer and emerging categories of wealth.
That requires knowledgeable underwriting rather than simply relying on a predefined list of what constitutes a valuable.
“For me, that’s what Private Clients underwriting is all about. It’s understanding the individual, their lifestyle and the things that matter to them. Whether that’s a piece of fine art, a watch or a rare Pokémon card shouldn’t really change that approach.”
About Bspoke Private Clients
And as the next generation of High Net Worth clients emerges, the insurance market needs to make sure its definition of “valuable” evolves with them.
At Bspoke Private Clients, we’ll work with you to understand the wider risk profile and explore suitable insurance options for specialist collections. Whether a client has a handful of particularly valuable cards or a substantial collection forming part of a wider portfolio of collectibles, we can help to find a solution designed around the risk.
To find out more about our high net worth proposition or discuss a complex case, contact the team at [email protected].