Insuring the Toys of the Wealthy Is a $40 Billion Business

Filled with oil paintings, watercolors, and other artworks, the offices of Privilege Underwriters Reciprocal Exchange (PURE) in White Plains, N.Y., look like a Manhattan gallery—that’s been through a storm. “We have a water-stained Salvador Dali, we have an ancient Chinese plate that is cracked and reframed in a box,” says Ross Buchmueller, the insurer’s chief executive officer. “And obviously we have this glass structure that greets everybody when they come in,” he adds, referring to a 5-foot sculpture with a crack in it that the company got from a client after paying his claim for its full value. “We have now installed damaged art throughout the building,” Buchmueller says. “It’s a constant reminder for why we are in business.”

PURE specializes in insuring the mansions of the ultrarich and their contents, a niche that is expanding rapidly as the ranks of U.S. billionaires swell. The company has about 50,000 policyholders; revenue from premiums has climbed 40 percent or more annually since its founding in 2006 and will come close to $500 million this year. Almost all its policyholders buy homeowners insurance, more than 80 percent also buy excess liability coverage, and about 75 percent pay extra to insure collections of art, wine, and other items. The business isn’t only about possessions: This year, PURE formed a partnership with Concentric Advisors, a cybersecurity firm run by a former Scotland Yard official, to help protect policyholders from hackers, identity theft, and breaches of financial data and embarrassing information.