We talked recently to Chubb in the US about the work it does with HNW owners of valuables such as jewelry, the advice it gives, and the state of the market.

While cybersecurity attacks often garner some of the most colorful media headlines today, theft, burglary and muggings of wealthy individuals and families, along with kidnappings, remain an unwelcome cause of demands for help. And the insurance industry has plenty of experience of these threats.

There’s a growing problem, it seems, in thefts and attacks on the wealthy. The Watch Register, which is based in the UK, in 2022 saw 6,815 watches newly recorded as being missing or stolen, skyrocketing by 60 per cent in the number of missing or stolen watches added to its global database during 2021. The £1.0 billion-plus value figure includes several high-value luxury watches that individually retail between £50,000 to £100,000 or more, with brands such as Rolex, Omega and Patek Philippe. This is a global problem. The register has figures from more than 90 countries. And all this unhappy reading, while it is just about watches and not other items such as jewelry, cars, or clothes, shows that sometimes it is an unsafe world out there. And, sadly, well-heeled financial hubs such as London, New York or Paris, aren’t as safe as they ought to be.

A good deal of managing all this comes down to developing “situational awareness” – as they put it in security-speak. It is a vocabulary that Tannie Ng, of Chubb, is familiar with. Ng, who is based in Toronto, is vice president, art, jewelry and valuable collections manager at the firm.

Chubb’s Fine Art & Collections practice brings together fine art and jewelry. Specialists across underwriting, risk consulting, and claims, Chubb’s in-house team have what is called Applied Jewelry Professional (AJP) designation from the GIA and advanced training in jewelry, fine art and collectibles.

A lot of Ng's work involves traveling around North America, advising individuals, advisors, and family offices on the best ways to protect their valuable collections. For example, an important concept is to create barriers outside and inside residencies so that a burglar can be delayed in making an attack, giving law enforcement a chance to act.

“It is about creating barriers to people trying to get access,” she told Family Wealth Report.

Perpetrators are getting bolder and more technically sophisticated: Gaining house entries in a second floor, or above; stealing an entire safe rather than initially trying to crack it; monitoring people’s movements on social media and via other sources to work out when they’re away, inserting criminals into the ranks of domestic staff, and more.

Chubb continues to raise alarms about potential complacency about physical and cybersecurity. For example, in 2020, Chubb found low uptake for even the most basic preventative steps. It found that less than half (40 per cent) of respondents used cybersecurity software and less than a third (30 per cent) regularly changed their passwords – numbers virtually unchanged from 2018. Among younger users, vigilance over some basic practices went into reverse.

Coupled with the kind of data about watch thefts, and anecdotal stories about crime rates in certain major Western cities, such as on the coasts of the US, it’s plain that there’s a problem.

Malevolent human action isn’t the only problem. In late December 2023, Chubb issued a report which found that more than three-quarters of wealthy Americans and Canadians think damage from severe weather stemming from climate change is the biggest threat to their home. 

Chubb’s business appears to be thriving. In the fourth quarter of 2023, Chubb – excluding a tax benefit – logged net income and core operating income of $2.16 billion and $2.27 billion, respectively, surging by 65.1 per cent and 35.8 per cent year-on-year, from 2022. For the whole of 2023, net income and core operating income were $7.89 billion and a record $8.20 billion, respectively, up 50.4 per cent and 27.6 per cent.

Mindset
Part of the problem is that when people buy a fine work of art, classic car or piece of jewelry, defending and insuring these items, tends not to be the first thing a buyer thinks about, Ng said.

“Sometimes insurance is just an afterthought,” Ng said.

The same problem applies to people traveling abroad, on vacation for example. “You don’t want to post when you are traveling because that indicates that your property could be unoccupied,” she continued.

With domestic staff, Chubb can advise families about the steps they should take in vetting potential employees and make regular updates. 

“Unfortunately, it is sometimes inside knowledge that staff can have that creates vulnerabilities,” she said. 

Another example of home vulnerability is when a property is being refurbished. Building workers can, unless checked, pose a possible threat. One solution is that when a renovation project is happening, the owner should move key valuables to another property. They should also ensure that staff have separate alarms, and owners should keep, and maintain, an inventory of their possessions, Ng added.

The aforementioned Chubb study pinpointed a range of other attitudes: Four out of five respondents are collectors of fine art, jewelry, cars, fine wines and other valuables. More than three-quarters of respondents (87 per cent) listed art fraud as the top risk to their collection, followed by damage during travel/transportation (86 per cent), environmental damage during storage/display (78 per cent) and theft/loss (77 per cent). 

The wealthy also fret about liability risks, including the potential for a big jury verdict. Nine out of 10 respondents are concerned about the size of a potential verdict against them if they were to be a defendant in a liability lawsuit.