Bloomberg News

Swiss Brides Buy Cover Against Wedding Crash as Economy Slows

October 03, 2011

Oct. 4 (Bloomberg) -- Corina Suter can’t afford to take any chances as she plans her wedding on a Swiss mountaintop next June. Should disaster strike, her insurance kicks in.

Suter, 29, a human-resources specialist from the canton of Zug, paid 69 Swiss francs ($78) for a policy from Zurich Financial Services AG that covers her 20,000-franc nuptials against cancellation. That includes no-shows by the bride, groom and their parents because of illness, bad weather and power outage, and even the risk of the caterer being shut down by health inspectors.

“It’s for my own peace of mind,” said Suter, who plans to marry Marco Kryenbuehl. “It would be a double whammy if something happens and we would lose the money as well.”

For Suter and other brides following in the footsteps of Audrey Hepburn, who married actor Mel Ferrer in Switzerland in 1954, a mix of austerity and higher wedding costs has boosted the appeal of insurance. Zurich Financial started selling policies in January through about 300 Valora Holding AG kiosks, which also stock magazines and chewing gum.

“In difficult economic times, people take fewer financial risks,” said Patric Deflorin, head of market management at Zurich Financial’s Swiss unit. “Many just cannot afford to foot the bill for a canceled wedding. This will positively affect the sale of wedding insurance.”

Wedding Costs

The price of a wedding has almost doubled to about 30,000 francs over the past 10 years, said Deflorin, who declined to disclose the Zurich-based company’s wedding insurance premiums. The average cost of a wedding in the U.S. rose almost 23 percent to $24,066 last year, according to Tucson, Arizona-based the Wedding Report, Inc.

Switzerland’s economic indicator, a monthly gauge that aims to predict the economy’s direction about six months ahead, fell to the lowest in two years in September, the KOF Swiss Economic Institute in Zurich said, adding to signs of a deepening slowdown. Swiss central bank President Philipp Hildebrand said last week that economic expansion will weaken in the second half of this year, partly because of a stronger currency.

Higher costs and tougher economic times increase the need for security, said Caterina Pelosato, a wedding planner from Pfaeffikon, Switzerland, who is advising Suter and Kryenbuehl. While the policies may seem unromantic, celebrity weddings and movies such as the Wedding Planner, starring Jennifer Lopez, have upped the financial pressure on ordinary couples, said Pelosato, who offers the insurance to every client.

Royal Weddings

“They spend much more money on their wedding than 10 or 15 years ago because people have become more demanding and the offering more versatile, and also because of the influence of media, Hollywood movies or royal weddings, which people want to copy,” she said. “There only has to be a volcanic eruption in Iceland for a wedding to be postponed and the bride and groom face additional costs.”

Royal bride Kate Middleton picked British label Alexander McQueen for her wedding dress when she married Prince William, second in line to the British throne, in front of about 1,900 guests in Westminster Abbey this April.

For the moment, this type of insurance remains a niche business, even in the U.S., where less than 2 percent of the 2.4 million weddings each year are insured, according to insurance broker Robert Nuccio.

Four years ago, Nuccio added a “change of heart” clause, for cases where a bride or groom backs out, to the standard wedding insurance policy. That cover, which only kicks in if the wedding is called off 180 days in advance, is offered by Fireman’s Fund Insurance Co., the U.S. unit of Europe’s biggest insurer, Allianz SE.

Change of Heart

“It’s either the most brilliant thing I’ve ever done, or the dumbest,” said Nuccio, adding that the percentage of claims for change of heart is “very high.” “You are not supposed to buy fire insurance if your house is already burning.”

Change of heart coverage starts from about $10 and while the total policy may cost as much as $300, that “is no more expensive than inviting one less guest,” said Janet Ruiz, a spokeswoman for Novato, California-based Fireman’s Fund.

In Europe, insuring against cold feet isn’t common practice yet because deciding against going through with a wedding is so- called willful intent, according to Barbara Koester-Heck, a broker with Aon, the world’s largest insurance broker.

That doesn’t bother Suter, who is more concerned about finding the right dress and booking a venue after her first choice was already taken.

“There’s a lot of pressure and it’s easy to underestimate how long a wedding takes to plan,” she said. “The insurance gives me certainty that not all is lost if something happens.”

--Editor: Dylan Griffiths, Steve Bailey.

ZURN VX <Equity> CN ALV GY <Equity> CN 11221Z US <Equity> CN

To contact the reporter on this story: Carolyn Bandel in Zurich at cbandel@bloomberg.net.

To contact the editor responsible for this story: Frank Connelly at fconnelly@bloomberg.net


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