Wealthy Policyholders Feel the Pinch

November 19 - While the general belief is that the fortunes of the very wealthy are recession-proof, this doesn't seem to be the case when it comes to insurance policies among South Africa's highest socio-economic groups.

According to the insurance industry, wealthy clients are actually seeking out ways to make cuts in their expensive premiums and are actively seeking out cheaper alternatives.

The recession is obviously the main culprit in this new trend as more and more of the nation's wealthy feel the pinch.

Pinion Insurance Brokers came out with statement this week to show the impact on the wealthy.

The group said that it was not unusual to see the average consumer shop around for affordable insurance, but this was not something that was seen in the wealthier sectors of society until now.

"While mass market insurance providers often see customers searching for cheaper policies, this is a relatively new trend amongst wealthy clients," said the Head of Insurance at Pinion, Clint Harker.

"The fortunes of South Africa's wealthiest individuals have tumbled over the last two years," he continued, "with the net worth of the country's most wealthy individuals halving in 2008 to R58.5 billion."

One way for these individuals to save on their insurance costs, according to Pinion, was for them to re-examine the value of their assts to make sure that they were not paying high premiums for nothing.

"For those who are becoming increasingly price sensitive, the increase in premiums to insure a phone that is worth R3000 is often not worth it," said Harker. "Instead, for clients who are looking to reduce their premiums, it may be more cost effective to self insure smaller items instead of specifying them on a policy."