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All the Right Moves
Privilege Underwriters Reciprocal Exchange is the go-to firm for agents representing high net worth


The spring of 2007 saw the entrance of a new player into the Florida property insurance market: Privilege Underwriters Reciprocal Exchange (PURE). As the name implies, the company positions itself as marketing to high net worth individual home owners. During its initial year, PURE confined its writing to Florida.

Ross Buchmueller, president and CEO of PURE Risk Management, LLC, and his management team, know what the high net worth market was looking for. Buchmueller, who had previously headed up AIG's Private Client Group, was very familiar with the needs of this group and set out to develop a product specifically designed for this group of buyers. And following active hurricane seasons in 2004 and 2005, the Florida property market was eager to see new participants.

Building on the success within the Florida market, PURE expanded into South Carolina in 2008. Development over the next two years was significant. Currently, PURE is licensed in 33 states and active in 15 of those. According to Buchmueller, "We are just finishing the rate and rule process in those states in which we are licensed, but not yet active." PURE's growth strategy over the past several years has been well accepted in the marketplace. "No question that our diversification and expansion process has gone well," he says. "We are very happy with it." Currently, PURE has about 10,000 members and expects to end fiscal year 2011 with as many as 15,000.

Mutuality done right

PURE's story is not just the story of the success of a small Florida underwriter—it is a success for the whole approach to providing protection to "the most responsible owners of the finest built homes."

Buchmueller points out that PURE's approach was ideally suited to this group of insureds. First of all, he says, "The prolonged recession has led consumers to try to make smarter decisions" in all aspects of their lives. But in a business like this [insuring high net worth homes] "that had a lot of inertia—buyers were looking for ways to make better decisions, and that plays in our favor," he says.

Home owners in this market space were looking for transparency and the long-term benefits that membership in a reciprocal could provide. PURE realizes that the economic picture for the next couple of years is not clear; however, Buchmueller indicates that even if the recovery is robust, "People will still choose this approach over those insurance companies whose goal is to maximize returns to their shareholders."

In general, PURE's "perfect prospects" are the "most responsible owners of the finest built homes." These owners have homes insured for $1 million or more, homes which are larger and newer. Buchmueller says that these are the owners who typically take the right precautions and are willing to take meaningful deductibles. The property is also usually located in well-mitigated areas. He also points out that these are owners who are not involved with frivolous claims.

Product distribution

To date, PURE continues to work with agent/broker partners within the new states as they come on line. "Typically, we look at our expected membership in a new state to determine appropriately how many highly professional agents" will be required to properly service the state, according to Buchmueller. For example, he notes, "In Illinois, we estimate that we will have 1,000 members by 2012." The question becomes how many agents will it take to subscribe that number of members? He says the trick is to "try to pick the smallest number of agents who have the deepest relationships and strongest trading partnerships."

In return, PURE offers its selected agents a unique product and a company that has "established substantial franchise value for those agents." In addition, the firm provides "agents with a competitive advantage [by being able to represent PURE] as well as lots of support from a variety of local and national marketing campaigns."

These marketing campaigns are carried out through a number of different media approaches, including radio, TV, and print media. Buchmueller states that it is very important for PURE "to introduce itself to the marketplace." He points out, "It is our responsibility to make the prospects aware of us [because] it is too difficult to make the agent responsible for that introduction." PURE has to establish the brand within the marketplace.

Committed agency partners

Independent agent Charles Kilvert is a good example of PURE's distribution partners. He is a founding partner with PURE, joining when PURE first began marketing in Florida. He has since relocated to Massachusetts. Since PURE has recently been approved to write business there, Kilvert was a natural choice as one of the agents. From the start, he appreciated PURE's concept. "This is one of the most creative, fresh ideas I have seen since I started in the business, and I buy into it whole heartedly," he states. And since he began his career in the insurance business with Marsh & McLennan in 1976, he has seen quite a few concepts come and go.

But it is not only Kilvert who likes the concept; his clients do as well. The buyers in this niche are "tired of the same old, same old." He points out, "High income home owners do not understand the insurance market. They pay their premiums; never have a claim, and still their premiums continue to go up." Traditional insurance, he notes, "is like a staircase that is always going up; as insurers try to balance the interest of the shareholders and those of the policyholders." That is why PURE's concept is so well received by his clientele when they hear about it. He says, "This program is designed for the specific needs of the high net worth home owner." As a result, Kilvert indicates, "They don't try to be all things to all people."

Currently, PURE has more than 200 agency partners across 15 states. As the company moves into new states, Buchmueller indicates that it probably will require between five to 15 agents per state. While there are no specific requirements to become a PURE agent, he says, "It would be important for an agency to have a proven strategy to handle high net worth business and be willing to grow that business." An additional consideration is that the agent fully understand "the concepts that PURE is founded on and be committed to them."

From a planning standpoint, Buchmueller indicates, "We would expect to add another 200 highly professional agents during 2011." He notes that while some of PURE's agents are affiliated with larger, national agencies, "some community-based agents have found great success with our program." Management of PURE's agency relationships is provided primarily through its four regional offices. However, because the company is always on the lookout for ways to increase agency partnerships, it has developed an easy application process on its Web site ( Buchmueller encourages interested agents to explore that avenue.


Despite the newness of PURE, the firm's management has proven the wisdom of its approach to this specialty market. Since PURE's formation in 2006, the success gained in Florida "has given us the grounds to change the trajectory of the company from being a very selective Florida company to being a very selective national company," points out Buchmueller. "Over this time period," he says, "we have refined and reaffirmed our strategy; and our commitment to our underwriting approach which has become an essential aspect of our success." This underwriting approach was key to gaining an A.M. Best assigned A- (Excellent) rating to PURE. And he believes that "the rating process has made us a better company because of the increased scrutiny that it put on us."

The insurance market has changed since PURE introduced its product in 2007. "Some of the changes have been good; some not so good," says Buchmueller. But so far, "Everything has gone as well as we could have hoped for." Bottom line, he points out, "As long as consumers continue to look for smarter decisions, smarter choices, we will do great."


"We have refined and reaffirmed our strategy; and our commitment to our underwriting approach which has become an essential aspect of our success."

—Ross Buchmueller
PURE Risk Management, LLC


PURE's concept " one of the most creative, fresh ideas I have seen since I started in the business."

—Charles Kilvert III
President, Nantucket Insurance Agency
and Founding Partner with PURE










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