My Story With Watch Insurance & WonderCare l Exclusive Interview With “Watch Time”

No, I've had um two entire collections stolen. Uh, one was an inside job and another was a random break-in to a home I had in Boston generated 1,000 requests for policies. Nobody in the insurance industry has ever, ever seen that before. I don't sell watches. I am not a reseller. It will be buried with me in my coffin. There's no way Paul Bros is going to auction this after I'm dead, although he wants to. He sent me this piece. On the back, it says, "In case of fire, break glass." I'm going to wear this when we tape on 911.

Yeah, I was actually just looking through the Wonder care site this weekend. Yeah, get this. This is a pretty big deal for you, huh? It is. I've been working on it um for about three years, and it's a big pain point in the industry. I've been doing a lot of research on the watch insurance industry, both domestic and internationally. Um, it really has not kept up with the demands of watch buyers. I'm just, I'm not even using the word collectors because their traditional methodology was to simply put it on your home package. You bought a Rolex or whatever and you just say, look, it's part of my jewelry package.

And then, of course, the watch industry did a funky thing. It started appreciating the asset values over time on vintage pieces. So, 10 years, 20 years later, you lose your Rolex. You get the depreciated value off the invoice two decades ago, right? On a watch worth $60,000. And so that's the problem in a nutshell. This is a solution for it.

Yeah, was there a personal experience that you had that kind of pushed you into doing this? Or have you just heard so many horror stories from people? No, I've had um two entire collections stolen. One was an inside job and another was a random break-in to a home I had in Boston. Um, that was the beginning of my, you know, journey into the insurance market. The challenge of what I face today is I have a very, very large collection, and sometimes I want to travel with 30 or 40 pieces. I want to put special insurance on those, given the nature of the country I may be going to or the television production I'm involved in or where they're being stored.

So, I need insurance policies that have the flexibility and that nuance to provide for that. Then, there's the real challenge, of course, of getting the true replacement value of a piece unique. I want Wonder care to service all of that, whether you just have a single watch you want to insure and you want to do it painlessly and get a replacement value for it, or you have a complex situation as a collector. It's going to do both.

So, what would you say to someone who has homeowners insurance or renters insurance that, you know, covers up to a certain amount? Why go with your special Wonder care? Well, first of all, read the fine print. Yeah, that's the first thing to do. Um, you will, in most cases, be shocked. You will immediately say, "Well, this is not going to provide for what I need." Then, you may want to call your provider and see what it's going to cost to put a special rider on it. That’s where Wonder care is going to be very, very competitive because we focus on one thing: providing the most cost-effective, transparent, and efficient watch insurance you can buy.

Right. Um, how long have you been working on this, and do you have any partners with this project? About three years. I started investigating it three years ago. Um, I formed the existing structure in the last year, and we've been working on the tech stack for quite a while. Of course, negotiations with syndicates all around the world on reinsurance. It turns out there's interest for this globally in almost every geography.

Now, the complexity of insurance is immense. It's a regulated financial service. I have that experience from my decades in financial services, in the ETF market as a CEO of a public company. I've listed companies on NASDAQ and New York Stock Exchange. I work in a very compliant environment. I invest in all exchanges, so that's my world. I live with a—I actually have a compliance department that I deal with every day of the week.

When you start selling watch insurance or any insurance in any state, let's just take the U.S. domestic, these are highly differentiated markets, state by state, city by city. What matters first when you apply for insurance is where is your domicile? What is your address, and you know, what state are you in? Because we have to take care of all of that in the tech stack to know exactly what we can offer you and what the terms will be, because it varies state to state.

That's why you do not see the watch brands get involved in this. You have never seen a watch company do this, and they never will. Uh-huh. Um, I assume that you're familiar with Hinkis Insurance and Wax. I think those are the two kind of big watch-focused insurance companies at the moment. Now to be joined by you, can you talk about what advantages people will have when they go to Wonder care instead of those two?

Great question! They're both great products and great people. I love the Dinky people. I mean, they're such a fantastic resource in just learning and investing in watches. But here's the challenge in this industry. Um, the biggest challenge, the biggest pain point if you're going to operate on a break-even, a profitable basis is customer acquisition cost.

Now, what differentiates me from almost every watch insurance company, including ones that specialize in jewelry and watch insurance or any watch platform or any insurance platform anywhere in America, is 9.1 million followers on social media who all know I'm a watch collector. Yeah! In experimenting with the basic model, we said, "Okay, if we can't figure out customer acquisition cost, there's no point in launching this business or investing in it, because we'll never be profitable.”

We'll always be acquiring customers that cost higher than their lifetime value. If you can't figure out customer acquisition cost, how can you even spend on return on advertising spend? You have to know exactly what the model looks like. So what we did is we said, "Okay, I generate a lot of content about watches because I'm passionate about them.” I mean, I love watches. It's a disease. It's a very, very bad virus and to the extent, my wife has tried to get me to seek help for it because I keep walking in with new pieces every week.

I consider it an emotional investment, a financial investment, no different than being a patron of modern art, as I point out to her as she collects modern art. I mean, there's no difference to me between, you know, buying a castle or a Warhol or getting a piece unique from FP Journe. What's the difference? Nothing to me! I'd argue the piece unique out of Journe is going to be worth more in 20 years than if I bought a Warhol today. I have a Warhol, but I'd rather buy another Journe.

So, you know, that's sort of the challenge you've got. You have to think a lot about who you are when you represent this product to potential watch owners. I am a known entity. The reason I give you this background is we decided to test it. Let's make three 15-second commercials and post them just three times in 20 days and find out how many requests for policies we would get. Those three insertions in just our own unpaid social on our own platforms generated 1,100 requests for policies. Nobody in the insurance industry has ever, ever seen that before.

I feel particularly fortunate! In the beginning when we roll this product out, we're going to announce it, you know, next or two weeks from now, Watches and Wonders. Um, we will be starting with just that inflow, but there are lots of other opportunities as we discuss it with—I know the CEO of every watchmaker. I'm very fortunate that way. When I talk to them, they're very interested in this product, and for one reason: I don't sell watches. I am not a reseller. I am not a dealer. Everybody knows I buy from every maker everywhere, and I never sell my pieces.

I am the Switzerland of Switzerland, and that's exactly why I get to do this. It took decades to create this trust and these relationships with every brand there is, and every one of these CEOs knows exactly what I'm talking about here. If anybody can be the person that on an affiliate basis goes into partnerships with them, it's because I have no conflicts whatsoever.

Yeah! Will you be going to Watches and Wonders with the aim of speaking to the CEOs about the insurance, or are you going to go to promote your insurance company to the attendees, or both? Or just be Mr. Wonderful? Well, you know what it takes to get an invitation to Watches? I'll be there. That means you don't have a conflict with anybody. They know exactly who you are, and you've been transparent about why you're going as a press person, I would imagine, right?

Yeah. Okay, I am invited as a collector, and I'm totally transparent with every meeting I've set up, why I'm there. I've already had meetings with them, talking about the design of our tech stack. I'm bringing my team over that did it and my experts in insurance, and we're doing meetings one by one to talk about this product and how we can integrate it into their resales and their aftermarkets.

Here's what's so interesting for watchmakers. Pick any brand. Let's say you sold a watch 25 years ago, and it's been resold twice. Well, if that person comes to me at Wonder care and says, "Look, I would like to ensure this piece because it's a vintage piece pre-85 and I think it's worth $60,000,” never mind what brand it is. I'm going to assess that request. I'm going to issue that policy. Then I will ask them, "Would you like me to repatriate with your maker? Would you like me to register you with the manufacturer so that you have that relationship again?”

That's at their discretion, and I bet more than 60% will say yes. I will find these watches all around the world for these brands as part of our relationship. That's excellent! Um, appraisals and deductibles, though, are a boring yet critical part of talking about insurance. Um, are you guys going to do your own appraisals, or are there a set team of partners that you're going to be working with? And are there any deductibles?

Well, the wonderful thing about the watch industry now, there are many tech stacks that scrape auction values every 24-hour cycle. Yeah, and they all have efficiencies and inefficiencies in them. I've been using these platforms since their inception. So, you know, when people want to assess the last sale of a, you know, a Rolex Daytona or a Journe Elegante or whatever it is, they go to these platforms of which we both know what they are.

They take a mean value of them, and they try and strip out the sales commission or the dealer's commission or the noise because there is a lot of noise in that data. You can come to a pretty good assessment of liquidation value or replacement value in a matter of seconds just using a very simple AI algorithm—really simple. This is nothing proprietary about this. I mean, insurance companies do it; we are certainly doing it.

When it's a piece unique, I have had, even in our little test, we had requests for piece uniques which are one-of-a-kinds made for a collector. This is joy for me because I have many of those. So, in reinsuring that piece, I'm going to be talking directly to the brand because are they ever going to reissue it? As you know, many piece uniques were made at a time when watch production was not a capacity.

Today, try and get a kid—I'm just thinking, like here for example, is a vertical tourbillon from Journe. It is a piece unique because it's the only one in the world where at the 12 marker, there's a red "K." Now, I'm honored to have this piece. I don't think FP would have ever made this for me if he didn't know how I covet a piece of art like this. This is a Warhol to me! Yeah, that's what this is.

It will be buried with me in my coffin. There's no way Paul Bros is going to auction this after I'm dead, although he wants to. I would argue it's going to be very hard to get a piece like this today because Journe only is going to make 900 or so watches this year. The demand is over 25,000. I mean, huge problem, Mr. Wonderful here. No one needs a watch, but everybody wants one. Why? Because it marks a moment of time in your life: a graduation, a marriage, a successful moment in your career.

It's like art. Many watches appreciate in value over time, and that's where the problems start. You might think your watch is covered by your home insurance policy, but in many cases, that is simply not true, especially if you're looking for a replacement value if your watch is lost or stolen. That's why I created Wonder care. Want to learn more about ensuring your watch? Go to wondercare.com.

Right. And the final question that I had for you is, is there any effect that aftermarket work done on a watch or customization has on the value that it's insured for? One hundred percent! So, if you're going to take a factory AP, which is one of the brands that really gets tricked out, in post-market non-factory implementation of jewels, you're destroying the watch. It's going to be reflected in its resale value.

You know, that's a very—that's the kind of thing that you want to take offline and look at because you know, it's a great—it's a great question. Think about, about 10 years ago; it's funny you brought it up because I was thinking about this exact thing before the interview and I pulled a few pieces from the vault. I'm thinking about a piece like a rainbow Rolex rainbow, and I'm thinking about a piece like the Eye of the Tiger Rolex.

Eye of the Tiger! I can't even read the time on this; it's so blinked out, but it's factory. That is so iconic! Can you hold that up for the camera again? Yeah, sure! Want to get a screen grab of that one because I just love that watch so much? Now, the only reason I bring these up that I wanted you to see these is a decade ago. These were not coveted pieces for men. No, they were not.

Today, these are the hottest watches in the retail market. Then you have a trend like this. This is a very difficult situation—the puzzle! Uh-huh! I wore that last year from you. Yeah, during the show for Watch Time. Exactly! So, the puzzle now has become beyond legendary. There are only three known pieces in America. There were supposed to be five; no one’s seen the other two. You, John Mayer, uh, myself, and U-Tom Brady.

Tom Brady! And you know, it's brilliant what they did. It's brilliant what they did! They said, "Okay, let's get a musician. Let's get a monster sports star, and let's get a watch collector." I mean, exactly! They won’t admit that, but that's exactly what they did. Exactly what it was, and it was brilliant! I said that last year; I'm like, those—that is such a curation of who to give your watches to!

And since then, the amount—I know there’s no way you can look up the replacement value because there are virtually no trades. But I know what I’ve been offered for this watch. So, it's right, and the chance that I would ever sell it is zero because, as they made it very clear to all three of us, this is a special allocation with the understanding that this is an estate watch. Yeah, like you die with that watch!

Yeah, I will die with this watch. This is another one being buried with me for sure. No way Phillips gets this! So, it’s sort of like—but I need to ensure it. You know, I need to ensure it. Uh, but you know, the thing is my— the majority of my collection is under the streets of bank vaults in multiple cities, and I don't say how many or where they are.

But you know, there's always the 20 or 30 just Shark Tank alone this year I’m going to need 18 new dials. Because this year, there's nine! Looks like with Barbara changes her dress, that's a new look. Lori changes her dress, that's a new look! But I always wear the same thing, with the exception of the watches. So, I have to match my watches to their dress looks.

So I've talked to all the makers and I've said, "Okay, I need new looks on dials." And that's where that Moser came from—that incredible Moser, that tourbillon; that's spectacular! That's going to be one of these, but I'm going to pair that with something else on the right wrist I haven't decided with what yet—another gold piece probably. You know, I got to work with wardrobe on it, but this is the most fun you can have as a watch collector is trying to figure out what goes with what—the dream.

Then, 110 million people see that in syndication on Shark Tank! I mean, that's—and they love the whole... You know, there's a whole thing going on online. Can you name those two pieces just you're watching the show? So, yeah! I mean, who’s having more fun? This is crazy fun! No, it’s amazing! I remember, like, back before you were as out about your love for watches, and I was just like, "What is he wearing?"

And I would pause the TV when they would go over your—I'm like, "That's a Panerai with a red strap!" Or that's this. Yeah, it's become huge! By the way, just out of the blue, I often get pieces sent to me. I got this this morning. I don't know if you’ve ever heard of this maker from London, England? It's a William Wood. Have you heard the story of this?

I have. I've seen these on Instagram. Um, a lot of people seem to love them. What's the deal with that? So, the band is made from fire hose—used fire hose. You can smell the smoke! He did it in honor for his firefighter grandfather, I think it was his? You know, it's his. His name is Johnny Garrett, and he sent me this piece. On the back, it says, "In case of fire, break glass."

I'm going to wear this when we tape on 911 because the people that have bought this are all firefighters, and it's a beautiful piece. I—and I'm honored to for him to send this to me. I'm going to meet up with him and shoot an interview in Geneva, but what a story! I mean, you want to talk... By the way, a beautiful piece! I mean, it's just—it’s of course red.

He did this, you know, obviously thinking, "Can this get some exposure?" And it will because I just loved his story. But this is the kind of thing I love, you know, it's just sort of—and I'm wearing it in honor, and many people this morning, I went and had a breakfast meeting—they said, "What the hell is that?" And I said, "Well, listen, listen to this story!"

Right! So, anyways, I could talk watches with you forever, you know that? I mean, it's— you know, but this was great! Yeah, thank you so much. Super helpful! We're gonna do an article on Wonder care for the next issue. Thank you! Based on this, I might sign up for Wonder care because I'm starting to get to the point where I've got anxiety about my watch collection over the year.

So I get texts from—I'll handle your policy with kid gloves myself. I've had plenty of calls from collectors saying, "Look, you know, what do you think? How many should I do?" Tiptoe in, but take your most valuable coveted pieces. Start there! Okay, I will! Yeah, it's like the Oscars. Yes, the Oscars! The same thing now, you know, the white party—all of this stuff is "What are you wearing?"

And it's—and so this is what I think has propelled the watch industry up another notch. It was this merging with fashion—men's fashion! Absolutely. You should do a piece just on that! I mean, fashion was never a caliber in the watch industry, never. Now, it's taste and style at once, and that's very poking.

Yeah! And all these new colorful bands, you know, the Vacheron guys never had multicolor bands. Now they do, you know? There’s a whole secondary market, you know, with rubber straps—all these different colors, all the things you can do. I mean, this is all new in the last five years. And then you’ve got the whimsical stuff coming out of Rolex, like the puzzle and the bubble! That would never—I never believed Rolex would do that!

That was last year, Watches and Wonders! Yeah! People's brains broke with that. I love it so much, but so many people were just like, "What is happening?" Like, it's still just like, "Yeah!" Anyways, it's so cool to be part of it at this time! So, anyways, listen, I really appreciate it! Take care! Yeah, thanks! Bye-bye.