This report provides an in-depth study into specialist home insurance products for wealthy individuals. It begins by defining the mid-net-worth (MNW) and high-net-worth (HNW) segments, followed by analysis of the historical growth in the number of these individuals and an estimate of market size. It 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 the latest developments. It concludes with a five-year market forecast and explores how technology has the potential to shape the market in the future. The report draws on primary and secondary research, including the publisher's proprietary market estimates and forecasts.
In spite of pandemic-related turbulence and the economic headwinds of 2022, the overall number of high-net-worth (HNW) individuals in the UK has grown over the last few years. This increase has combined with hardening premiums to drive up UK HNW home insurance gross written premiums (GWP), as insurers have acted to combat strong inflationary pressures following a long period of soft rates. The competitor landscape is shifting, with long-established HNW insurers facing pressure from major composites and a number of other specialist providers targeting growth. Hard market conditions are expected to subside after 2023, thanks to a combination of easing inflationary pressures, increased competition, and the operational efficiencies of digitalization reducing rate pressure.
In spite of pandemic-related turbulence and the economic headwinds of 2022, the overall number of high-net-worth (HNW) individuals in the UK has grown over the last few years. This increase has combined with hardening premiums to drive up UK HNW home insurance gross written premiums (GWP), as insurers have acted to combat strong inflationary pressures following a long period of soft rates. The competitor landscape is shifting, with long-established HNW insurers facing pressure from major composites and a number of other specialist providers targeting growth. Hard market conditions are expected to subside after 2023, thanks to a combination of easing inflationary pressures, increased competition, and the operational efficiencies of digitalization reducing rate pressure.
Scope
- The publisher estimates that the HNW home insurance market was worth GBP671 million in 2022, with strong growth driven by the rising number of HNW individuals and double-digit premium rate increases.
- There are more than 400,000 HNW individuals (with liquid assets in excess of $1 million) in the UK. Overall, the number of HNW individuals increased by an average of 3.9% a year between 2018 and 2022.
- Long-established HNW market leaders Hiscox and Chubb are facing competition from a range of insurers with ambitious growth aims. Aviva is expecting to become market leader with its recent acquisition of Azur.
- Personalized service remains vital, but seamless digital and physical interactions in other areas of HNW individuals' lives will raise their expectations for their insurance providers to offer the same.
Reasons to Buy
- Understand the current and forecast size and growth of the UK HNW home insurance market.
- Gain insight into emerging HNW market segments and the impact of changing HNW expectations on their insurance relationships.
- Understand the major players and shifting competitor dynamics in the UK HNW home insurance sector.
- Learn what forces will affect the future shape of the UK HNW home insurance market.
Table of Contents
1. Executive Summary1.1 Market overview
1.2 Key findings
1.3 Critical success factors
2. The UK HNW and MNW Home Insurance Market
2.1 Introduction
2.2 What classifies an individual as MNW or HNW?
- Definitions differ across the financial services industry
- Insurers typically use the value of contents insured and rebuild costs
- The market has grown strongly over the last five years
- The number of HNW individuals is rising
- Premium rates have increased significantly
- Inflation and supply chain issues are leading to steep claims cost increases
- HNW individuals and MNW individuals holding mass-market products
- Impact of inflation on single-item underinsurance
3.1 Emerging market segments and the “great wealth transfer”
- Emerging market segments
- The “great wealth transfer”
- Mass affluent and emerging HNW
- Brokers remain the primary channel for HNW customers
- Lessons from the wealth management industry
- HNW switching may increase in future
- HNW individuals are increasingly focused on ESG considerations
- HNW individuals will expect hybrid personal and digital experiences
- Value-added services need to be aligned to emerging HNW needs
- Investment in digital capabilities will be vital
4.1 The HNW competitor landscape is shifting
4.2 Established HNW insurers face pressure from major composites with ambitious aims
- Hiscox has an established specialist HNW reputation, but its broker service has suffered
- Chubb scores highly for broker service
- Aviva aims to be the UK HNW market leader
- Zurich Private Clients targets HNW growth
- Covéa attributes good growth in HNW business to stronger broker relationships
- Ecclesiastical plans to double the size of its Art & Private Client book within five years
- Brit has launched its HNW offering
- Home & Legacy becomes an MGA
5.1 UK HNW home insurance market growth is forecast to stabilize through to 2026
- HNW home insurers will benefit from a growing target market
- GWP is forecast to grow at healthy levels
- Premium rates will stabilize over the next few years
- Technology will continue to drive market change across the HNW home insurance value chain
- Combating climate change
- Insurers need to keep abreast of emerging HNW investments such as NFTs
- Cyber insurance will continue to evolve to meet the needs of HNW customers
6.1 Abbreviations and acronyms
6.2 Methodology
6.3 Secondary sources
6.4 Further reading
- About the Publisher
- Contact the Publisher
- Table 1: UK MNW and HNW insurance parameters
- Table 2: UK HNW and MNW home insurance market GWP, GBP million, 2018-22
- Table 3: Number of UK MNW and HNW individuals by liquid assets, 000s, 2018-22
- Table 4: Additional claims pressures facing HNW insurers
- Table 5: Number of UK MNW and HNW individuals by liquid assets, 000s, 2022-26
- Table 6: UK HNW and MNW home insurance market GWP, GBP million, 2022-26
- Figure 1: There has been robust growth in UK HNW home insurance GWP in recent years
- Figure 2: Growth in the number of UK MNW and HNW individuals stalled in 2022
- Figure 3: There are 1.7 million MNW individuals in the UK with liquid assets >$300,000
- Figure 4: Inflation rose sharply in 2021 and 2022
- Figure 5: Emerging HNW customer segments
- Figure 6: Wealth management clients are seeking more hybrid and digital interaction
- Figure 7: Data-driven insights that can transform HNW insurance propositions
- Figure 8: The UK HNW competitor landscape is shifting, with several insurers targeting growth in this segment
- Figure 9: The number of UK HNW individuals will rise by an average of 4.5% a year over 2022-26
- Figure 10: Growth in HNW home insurance GWP will slow through to 2026 as inflationary pressures ease
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Hiscox
- Chubb
- Aviva
- Azur
- Ondo
- Ecclesiastical
- Zurich
- Covéa
- Brit
- Home & Legacy
- AXA
- Allianz
- HDI Global
