The UK high net worth (HNW) household insurance market has been growing at a consistent but low rate, stymied in part by individuals failing to identify themselves as the target audience. Against these struggles, one key market for growth could be catering for foreign HNW individuals purchasing UK properties.
Despite the UK seeing a year-on-year increase in the number of individuals deemed HNW, growth in household insurance GWP for this segment has been consistent yet low. Growth mostly originates from the mid-net worth (MNW) segment, but as individuals’ wealth gradually increases their risk profile changes. As a result, specialist HNW policies become more appropriate and prevent underinsurance. But with the Brexit negotiations creating an uncertain economic environment, MNW individuals may see their wealth impacted, resulting in stifled growth in the HNW home insurance market.
Speaking to experts within HNW household insurance, a key niche that has been identified for potential future growth is foreign HNW individuals purchasing properties in the UK. With property in the UK (particularly London) typically seen as a safe investment, foreign HNW individuals may be inclined to purchase a property for investment purposes. In turn, they will require specialist HNW household insurance in order to reduce their risk.
Despite the level of business this market would bring being relatively small compared to the overall HNW household insurance space, it will enable providers and brokers to diversify their customer base and rely less on individuals whose wealth resides within the UK. The wealth of UK HNW and MNW individuals is often tied to the UK economy. Targeting customers whose wealth is independent of this would offer providers some level of protection should the wealth of the UK population begin to plateau due to economic conditions.