High Net Worth

The Ultra-wealthy Prep for Doomsday

The world's richest citizens are searching out top-notch security measures and infrastructure to prepare against natural and man-made disaster.
By: | March 28, 2018 • 5 min read

From natural disasters and climate change to terrorism and the threat of global conflict, it can seem as if the world is on the edge of more perilous times. While most people can do little more than review their insurance policies and go about their lives, some of the ultra-wealthy are going to great lengths to prep for potential disaster.

Growing Fears About Mega Disasters

An article in The New Yorker last year suggested that hundreds, if not thousands, of ultra-wealthy Americans are prepping for doomsday scenarios. Many high net worth people are looking beyond insurance to protect themselves from man-made and natural disasters, said Steve Bitterman, chief risk services officer, Vault Insurance.

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“I think there are more things going on these days that make people think. For some, it’s a hurricane or the protection of a collection. For others, it’s survivalist-type stuff,” Bitterman said.

There was a time when “prepping” was limited to offbeat conspiracy theorists who played weekend warrior in the woods. But it has partly gone mainstream in recent years due to news, political events, disasters and the growing popularity of post-apocalyptic shows like “The Walking Dead.”

A recent survey by Finder.com revealed more than one in four Americans, roughly 68 million people, have purchased some sort of survival gear due to recent political events or disasters. One interesting discovery: Preparedness increased with income level. Those with higher household incomes spent a proportionately higher percentage on things like supplies and home renovations to withstand disasters.

Beyond basic supplies, the high net worth are acquiring properties in more isolated places, such as rural Montana, New Hampshire and Maine, Bitterman said. Others have been eyeing remote islands in the Caribbean and New Zealand — a remote location with a high level of political stability. PayPal founder Peter Thiel recently acquired a 477-acre estate in New Zealand and was granted citizenship there.

“And the beauty is, for these people buying blue-chip properties in exotic locations around the world, they’re not going to lose money, so they end up with a fabulous vacation home, and the ability to disappear if they need to,” Bitterman said.

Luxury Bunkers and 5-Star Shelters

Along with acquiring secure getaways in remote locations, the high net worth are also constructing secure infrastructure to withstand the most extreme disasters. In September 2017, billionaire Richard Branson and his family safely and comfortably rode out one of the strongest hurricanes on record inside of his wine cellar on Necker Island.

Steve Bitterman, chief risk services officer, Vault Insurance

In places like Florida, deca-millionaires are constructing hurricane-proof rooms in their homes or their own properties, Bitterman said. While standard shelters can be had for as little as $7,000, niche contractors are also constructing elaborate luxury bunkers that can run into the millions of dollars and can even withstand a direct nuclear attack.

Vivos offers a number of shelter solutions, including the 40-foot Quantum shelter, which can be buried underground and can accommodate up to eight people with enough room for a year’s worth of food.

The company is also developing survival communities in places like Indiana and South Dakota. Vivos’ Europa-1 facility offers 5-star amenities and what it says is the “ultimate life assurance solution for high net worth families.” The shelter is carved out of solid bedrock in a mountain, can withstand a close-range nuclear

blast and features three miles of tunnel chambers with gyms, theaters, a bar and enough space to accommodate a community of 500 residents. Private apartments in the luxury survival community start at $2.5 million (€2 million).

“I think there are more things going on these days that make people think. For some, it’s a hurricane or the protection of a collection. For others, it’s survivalist-type stuff.” — Steve Bitterman, chief risk services officer, Vault Insurance

The richest of the rich are also constructing custom facilities on their own properties. And until the need arises to live in them, many are using them to store collections of art, vehicles and other items.

“There are people going to incredible lengths to consolidate storage of their collections in one facility. Some even have hundreds of cars, and so they create spaces protected from whatever catastrophe in that area might be,” Bitterman said.

The Digital Threat

Terrorism also remains a significant threat.

After 9/11, many ultra-wealthy people in Manhattan began to rethink their ability to evacuate the island in the event of an emergency. While many of these people already had access to helicopters, it was little help when air traffic was instantly grounded after the attacks. To this day, some wealthy Manhattanites still have alternative transportation methods in place to quickly vacate the island if necessary.

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“People that didn’t keep cars in the city were buying garage space and cars. Several clients we had bought or rented boats, because if something like that happened again, they wanted to be able to get out of the city quickly,” Bitterman said.

Many are also going to great lengths to reduce their exposure in the event of a massive cyberattack, Bitterman added.

The U.S. Director of National Intelligence said the public and private sectors in the U.S. remains at a high risk of attack from state and non-state actors. The ultra-wealthy are also significant targets for identity theft and hacking of personal or financial data then held for ransom.

Vault has partnered with security firms specializing in serving the needs of the high net worth. They come into a home and review phones, computers and all electronic devices to ensure clients have the highest level of security. These companies also review security cameras, which can be hijacked to spy on the residents.

And in the event of an attack, they can act quickly to reduce the damage: “There are just more things of concern, and they’re going to great lengths to limit catastrophe when something goes wrong,” Bitterman said. &

Craig Guillot is a writer and photographer, based in New Orleans. He can be reached at [email protected]

More from Risk & Insurance

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The Profession

For This Pharmaceutical Risk Director, Managing Risk Means Being Part of the Mission to Save Lives

Meet Eric Dobkin, director, insurance and risk management, for Merck & Co. Inc.
By: | September 28, 2018 • 5 min read

R&I: What was your first job?
My first job out of undergrad was as an actuarial trainee at Chubb.I was a math major in school, and I think the options for a math major coming out are either a teacher or an actuary, right? Anyway, I was really happy when the opportunity at Chubb presented itself. Fantastic company. I learned a lot there.

R&I: How did you come to work in risk management?
After I went back to get my MBA, I decided I wanted to work in corporate finance. When I was interviewing, one of the opportunities was with Merck. I really liked their mission, and things worked out. Given my background, they thought a good starting job would be in Merck’s risk management group. I started there, rotated through other areas within Merck finance but ultimately came back to the Insurance & Risk Management group. I guess I’m just one of those people who enjoy this type of work.

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R&I: What is risk management doing right?
I think the community is doing a good job of promoting education, sharing ideas and advancing knowledge. Opportunities like this help make us all better business partners. We can take these ideas and translate them into actionable solutions to help our companies.

R&I: What could the risk management community be doing a better job of?
I think we have made good advancements in articulating the value proposition of investing in risk management, but much more can be done. Sometimes there is such a focus on delivering immediate value, such as cost savings, that risk management does not get appropriate attention (until something happens). We need to develop better tools that can reinforce that risk management is value-creating and good for operational efficiency, customers and shareholders.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?
I’d actually say there hasn’t been as much change as I would have hoped. I think the industry speaks about innovation more often than it does it. To be fair, at Merck we do have key partners that are innovators, but some in the industry are less enthusiastic to consider new approaches. I think there is a real need to find new and relevant solutions for large, complex risks.

R&I: What emerging commercial risk most concerns you?
Cyber risk. While it’s not emerging anymore, it’s evolving, dynamic and deserves the attention it gets. Merck was an early adopter of risk transfer solutions for cyber risk, and we continue to see insurance as an important component of the overall cyber risk management framework. From my perspective, this risk, more than any other, demands continuous forward-thinking to ensure we evolve solutions.

R&I: What’s the biggest challenge you’ve faced in your career?
Sticking with the cyber theme, I’d say navigating through a cyber incident is right up there. In June 2017, Merck experienced a network cyber attack that led to a disruption of its worldwide operations, including manufacturing, research and sales. It was a very challenging environment. And managing the insurance claim that resulted has been extremely complex. But at the same time, I have learned a tremendous amount in terms of how to think about the risk, enterprise resiliency and how to manage through a cyber incident.

R&I: What advice might you give to students or other aspiring risk managers?
Have strong intellectual curiosity. Always be willing to listen and learn. Ask “why?” We deal with a lot of ambiguity in our business, and the more you seek to understand, the better you will be able to apply those learnings toward developing solutions that meet the evolving risk landscape and needs of the business.

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R&I: What role does technology play in your company’s approach to risk management?
We’re continuing to look for ways to apply technology. For example, being able to extract and leverage data that resides in our systems to evaluate risk, drive efficiencies and make things like property-value reporting easier. We’re also looking to utilize data visualization tools to help gain insights into our risks.

R&I: What are your goals for the next five to 10 years of your career?
I think, at this time, I would like to continue to learn and grow in the type of work I do and broaden my scope of responsibilities. There are many opportunities to deliver value. I want to continue to focus on becoming a stronger business partner and help enable growth.

R&I: What is your favorite book or movie?
I’d say right now Star Wars is top on my list. It has been magical re-watching and re-living the series I watched as a kid through the eyes of my children.

R&I: What is the riskiest activity you ever engaged in? When I was about 15, I went to a New York Rangers versus Philadelphia Flyers game at the Philadelphia Spectrum. I wore my Rangers jersey. I would not do that again.

Eric Dobkin, director, insurance & risk management, Merck & Co. Inc

R&I: What is it about this work you find most fulfilling or rewarding?
I am passionate about Merck’s mission of saving and improving lives. “Inventing for Life” is Merck’s tagline. It’s funny, but most people don’t associate “inventing” with medicine. But Merck has been inventing medicines and vaccines for many of the world’s most challenging diseases for a long time. It’s amazing to think the products we make can help people fight terrible diseases like cancer. Whatever little bit I can do to help advance that mission is very fulfilling and rewarding.

R&I: What do your friends and family think you do?
Ha! My kids think I make medicine. I guess they think that because I work for Merck. I suppose if even in a small way I can contribute to Merck’s mission of saving and improving lives, I am good with that. &




Katie Dwyer is an associate editor at Risk & Insurance®. She can be reached at [email protected]