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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

More from Risk & Insurance

Risk Management

The Profession: Curt Gross

This director of risk management sees cyber, IP and reputation risks as evolving threats, but more formal education may make emerging risk professionals better prepared.
By: | June 1, 2018 • 4 min read

R&I: What was your first job?

My first non-professional job was working at Burger King in high school. I learned some valuable life lessons there.

R&I: How did you come to work in risk management?

After taking some accounting classes in high school, I originally thought I wanted to be an accountant. After working on a few Widgets Inc. projects in college, I figured out that wasn’t what I really wanted to do. Risk management found me. The rest is history. Looking back, I am pleased with how things worked out.

R&I: What is the risk management community doing right?

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I think we do a nice job on post graduate education. I think the ARM and CPCU designations give credibility to the profession. Plus, formal college risk management degrees are becoming more popular these days. I know The University of Akron just launched a new risk management bachelor’s program in the fall of 2017 within the business school.

R&I: What could the risk management community be doing a better job of?

I think we could do a better job with streamlining certificates of insurance or, better yet, evaluating if they are even necessary. It just seems to me that there is a significant amount of time and expense around generating certificates. There has to be a more efficient way.

R&I: What was the best location and year for the RIMS conference and why?

Selfishly, I prefer a destination with a direct flight when possible. RIMS does a nice job of selecting various locations throughout the country. It is a big job to successfully pull off a conference of that size.

Curt Gross, Director of Risk Management, Parker Hannifin Corp.

R&I: What’s been the biggest change in the risk management and insurance industry since you’ve been in it?

Definitely the change in nontraditional property & casualty exposures such as intellectual property and reputational risk. Those exposures existed way back when but in different ways. As computer networks become more and more connected and news travels at a more rapid pace, it just amplifies these types of exposures. Sometimes we have to think like the perpetrator, which can be difficult to do.

R&I: What emerging commercial risk most concerns you?

I hate to sound cliché — it’s quite the buzz these days — but I would have to say cyber. It’s such a complex risk involving nontraditional players and motives. Definitely a challenging exposure to get your arms around. Unfortunately, I don’t think we’ll really know the true exposure until there is more claim development.

R&I: What insurance carrier do you have the highest opinion of?

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Our captive insurance company. I’ve been fortunate to work for several companies with a captive, each one with a different operating objective. I view a captive as an essential tool for a successful risk management program.

R&I: Who is your mentor and why?

I can’t point to just one. I have and continue to be lucky to work for really good managers throughout my career. Each one has taken the time and interest to develop me as a professional. I certainly haven’t arrived yet and welcome feedback to continue to try to be the best I can be every day.

R&I: What have you accomplished that you are proudest of?

I would like to think I have and continue to bring meaningful value to my company. However, I would have to say my family is my proudest accomplishment.

R&I: What is your favorite book or movie?

Favorite movie is definitely “Good Will Hunting.”

R&I: What’s the best restaurant you’ve ever eaten at?

Tough question to narrow down. If my wife ran a restaurant, it would be hers. We try to have dinner as a family as much as possible. If I had to pick one restaurant though, I would say Fire Food & Drink in Cleveland, Ohio. Chef Katz is a culinary genius.

R&I: What is the most unusual/interesting place you have ever visited?

The Grand Canyon. It is just so vast. A close second is Stonehenge.

R&I: What is the riskiest activity you ever engaged in?

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A few, actually. Up until a few years ago, I owned a sport bike (motorcycle). Of course, I wore the proper gear, took a safety course and read a motorcycle safety book. Also, I have taken a few laps in a NASCAR [race car] around Daytona International Speedway at 180 mph. Most recently, trying to ride my daughter’s skateboard.

R&I: If the world has a modern hero, who is it and why?

The Dalai Lama. A world full of compassion, tolerance and patience and free of discrimination, racism and violence, while perhaps idealistic, sounds like a wonderful place to me.

R&I: What about this work do you find the most fulfilling or rewarding?

I really enjoy the company I work for and my role, because I get the opportunity to work with various functions. For example, while mostly finance, I get to interact with legal, human resources, employee health and safety, to name a few.

R&I: What do your friends and family think you do?

I asked my son. He said, “Risk management and insurance.” (He’s had the benefit of bring-your-kid-to-work day.)

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