High Net Worth Household Insurance 2018

High Net Worth Household Insurance 2018

Summary

Within the UK household insurance market there is a segment dedicated to providing specialist policies for individuals whose above-average wealth would result in them being underinsured should they hold a standard, mass market policy. In response, providers have developed policies for both mid net worth (MNW) and high net worth (HNW) individuals that typically have wider coverage and higher limits than standard policies.

The number of HNW and MNW households in the UK is forecast to continue rising over the next five years. This, combined with average premiums which it is believed will hold constant or rise slightly, will allow the market GWP to continue its year-on-year growth. In order for providers to capitalize on this potential growth they must begin to adopt online platforms which can be utilized for the purchasing journey and claims process, as customer preferences have slowly started to change towards those found within the mass market.

Key findings included in this report:

The dominant players in the specialist household insurance market remain Hiscox and Chubb.

Consumer purchasing and research attitudes found within the mass market are beginning to trickle into the MNW market, as individuals’ wealth grows and they continue to hold these attitudes.

Specialist HNW and MNW insurers are regarded as providing some of the best insurance across the industry.

The report "High Net Worth Household Insurance 2018", provides an in-depth study into specialist home insurance products for wealthy individuals. The report outlines what a typical MNW and HNW home insurance product includes and how they are distributed. Key issues associated with the industry are addressed in addition to highlighting key market players, their products and latest developments.

Companies mentioned in this report: AIG, Aviva, AXA ART, Chubb, Covéa, Hiscox, Plum Underwriting, Zurich, XL Group, Azur

Scope

The dominant players in the specialist household insurance market remain Hiscox and Chubb.

Consumer purchasing and research attitudes found within the mass market are beginning to trickle into the MNW market as individuals’ wealth grows and they continue to hold these attitudes.

Specialist HNW and MNW insurers are regarded as providing some of the best insurance across the industry.

Reasons to buy

Benchmark yourself against the rest of the market.

Ensure you remain competitive as new innovations and insurance models begin to enter the market.

Be prepared for how regulation will impact the household insurance market over the next few years.

1. EXECUTIVE SUMMARY

1.1. Market summary
1.2. Key findings
1.3. Critical success factors

2. THE HNW & MNW HOUSEHOLD INSURANCE MARKET

2.1. Introduction
2.2. What classifies an individual as MNW or HNW?
2.2.1. Insurers’ definition of MNW and HNW individuals
2.2.2. The value of contents insured and rebuild costs are used to classify individuals
2.2.3. The diversity of risks is far greater for MNW and HNW individuals
2.2.4. Underinsurance is a problem in the specialist home insurance market
2.3. Growth in the MNW and HNW home insurance market
2.3.1. The market has grown consistently over the previous five years
2.3.2. Further growth in the market is possible, with the key being MNW individuals
2.3.3. The number of policies written is steadily increasing
2.3.4. Product targeting and identifying customers is crucial to achieving higher growth

3. DISTRIBUTION

3.1. MNW individuals continue to shape the market
3.1.1. There is a growing shift towards the online marketplace for MNW home insurance
3.1.2. Brokers must incorporate technology
3.2. Service is the key to the HNW insurance market
3.2.1. Complex risks make brokers essential for HNW household insurance clients
3.2.2. HNW insurers remain among the best service providers
3.2.3. The HNW claims process is as streamlined as possible
3.3. Collaboration across industries could help unlock a new client base
3.3.1. Working with other financial services providers will allow for new clients to be sourced

4. COMPETITOR DYNAMICS

4.1. The largest players in the HNW and MNW space
4.1.1. Hiscox’s 506 and 606 policies target MNW and HNW individuals
4.1.2. Chubb offers three levels of household insurance
4.2. A number of other specialist providers also operate within the market
4.2.1. Covéa offers two specialist policies designed for the MNW and HNW markets
4.2.2. Plum Underwriting includes home cyber insurance in its offerings
4.3. Mass market insurers are also present in the HNW and MNW market
4.3.1. Aviva Private Clients opens doors to the HNW segment
4.3.2. Zurich Private Clients caters for HNW individuals
4.3.3. AXA’s acquisition of XL Group will help expand its HNW offering
4.3.4. AIG has a presence in the HNW market through its joint venture with Azur

5. THE MARKET GOING FORWARD

5.1. The market is set to continue growing over the coming years
5.1.1. The number of households in the UK requiring specialist policies looks set to increase
5.1.2. The total number of policies written is forecast to continue growing
5.1.3. GWP is forecasted to break the £1.1bn mark
5.1.4. Foreign individuals may provide a boost to market GWP
5.2. Technology will become integral to enhancing the cover offered
5.2.1. Smart devices will help reduce the cost of claims for insurers while giving customers peace of mind
5.2.2. Security systems will become increasingly complex
5.2.3. Cyber insurance is becoming a common element of HNW household insurance
5.3. The online world will become of increasing importance
5.3.1. Growth in the online channel will help to fuel competition further
5.3.2. Aggregators could potentially disrupt the market
5.3.3. Chatbots could further enhance the customer experience

6. APPENDIX

List of Tables

Table 1: Parameters used to classify customers
Table 2: Total GWP of the HNW and MNW household insurance markets
Table 3: The number of household insurance policies written in the MNW and HNW market
Table 4: Forecasted number of MNW and HNW households in the UK
Table 5: The forecasted number of MNW and HNW household insurance policies written
Table 6: The forecasted values of both the HNW and MNW household insurance markets

List of Figures

Figure 1: MNW and HNW household insurance market GWP continues to grow
Figure 2: The number of MNW individuals in the UK continue to grow steadily
Figure 3: The number of individuals classed as HNW in the UK continues to grow
Figure 4: Policy numbers continue to increase year-on-year
Figure 5: There is considerable potential for growth in the MNW market
Figure 6: Insurers that specialize in HNW insurance are seen as providing the best service
Figure 7: MNW and HNW household numbers are set to increase
Figure 8: The number of policies written is forecasted to continue increasing
Figure 9: The market is forecast to continue steady year-on-year growth