Hurricanes Helene and Milton recently underscored the complexities of safeguarding high-value assets in unpredictable conditions.
For one specialist in the high-net-worth (HNW) insurance field, the recent hurricane season showcased carriers’ resilience. At the same time, it highlighted the need for brokers to stress proactive risk management strategies among HNW clients, particularly around flood risks, which increasingly occur in unexpected locations.
“Helene and Milton were undoubtedly significant events for the insurance industry, but their impact on the high-net-worth sector is expected to be limited,” said Jason Ott (pictured), president of Aon Private Risk Management (APRM).
“In Florida, carriers have established structured programs with self-retention limits, high deductibles, and plans to help clients protect their homes. Often, damages from these events fall below the deductible, which minimizes the overall impact on carriers in the state. While there will be some effect, it’s not as severe as it could have been.”
One area of concern, however, is auto losses. Ott noted that most of the claims APRM saw from Helene and Milton were related to auto and flood damage. Notably, flood claims are typically handled by FEMA’s National Flood Insurance Program (NFIP) rather than high-net-worth carriers.
“Moving forward, it’s important to ensure that plans are in place to move vehicles to safer locations during storms,” said Ott. “For homes with negative elevation, it’s vital to have strategies for lifting vehicles in case of flooding.”
A significant area of opportunity for brokers with HNW clients is flood insurance. Ott said that many HNW families don’t carry this coverage, even in areas not considered high-risk.
But as Hurricane Helene has proven, floods, which are generally excluded from standard homeowners’ policies, can happen anywhere. Flood insurance remains an afterthought for many, particularly those outside FEMA-designated high-risk zones.
“When examining Helene, a concerning pattern emerged: much of the damage occurred in North Carolina at high elevations, particularly in Asheville—a region not typically considered high-risk,” Ott told Insurance Business.
This gap in coverage highlights a troubling reality, according to Ott: most homeowners don't have flood insurance because it isn’t required by their mortgage. To address this, Ott's team is having “a lot of conversations” with clients to reconsider their preparedness.
Ott has spent his entire career navigating the intricacies of high-net-worth insurance. With 23 years of experience in the field, 19 of those at Aon, Ott oversees a team of 160 specialists catering to an exclusive clientele that includes over 250 single-family offices and 115 families with net worths exceeding a billion dollars.
“We know the segment,” Ott said, underscoring his team’s deep familiarity with the unique risks faced by wealthy families. Their approach? Tailored solutions that align with each client’s specific risk tolerance and spending priorities.
As climate change continues to drive unpredictable weather patterns, insurers are also grappling with the rise of severe convective storms. While catastrophic hurricanes and wildfires dominate headlines, these so-called “secondary perils” are exacting a significant toll on the industry.
According to Ott, 2023 revealed an alarming trend: a high frequency of moderate-loss events in the $3–$6 billion range, including hailstorms, tornadoes, and flooding. "There were nine events in 2023 compared to just one in 2022," he said, pointing to data from the National Oceanic and Atmospheric Administration (NOAA).
The frequency of secondary peril events means HNW insureds must shift their focus toward proactive loss prevention measures. Questions about roof age, window strength, and flood elevation have become standard in discussions with policyholders, while some states are even introducing wind and hail deductibles to manage rising claims.
However, Ott advised brokers to think less about selling one-size-fits-all policies to HNW families and more about understanding their unique needs and vulnerabilities. This also extends to risk management.
Ott said some HNW clients are responding to escalating climate-related risks by opting to self-insure or investing in physical flood barriers of paying high premiums. “We’re seeing some people say, ‘I might drop my wind insurance and build protection around my house,’” he said.
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