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Rising Home Insurance Premiums in the High Net Worth Market

It’s no secret that home insurance premiums are rising almost daily, and this is undoubtedly true for the high net worth home market, too. High net worth homeowners are seeing rates quickly increasing due to various factors including inflation and uncertainty in the global economy, as well as a rise in claims costs, rebuild costs and fraudulent claims. In addition, there is reduced capacity in the market following recent exits or consolidation of insurers.

Rising claims costs are leading to underwriting tightening and premium pressure

The cost of an average home insurance policy has increased by 25% over the last 12 months.

The impact on carriers affects consumers, too

Homes in higher-risk areas can even see increases up to 50% or more, and we anticipate further rate increases into 2025 and beyond. So, how can you balance your costs with adequate coverage amid all this uncertainty? One of the best strategies is leveraging the expertise of a specialist insurance advisor.

Underinsurance is more of an issue for high net worth clients than ever before, new research finds

Underinsurance is now a pressing concern with 40% of high net worth (HNW) clients being underinsured, 4% higher compared to data in 2023 provided by Ecclesiastical. The survey also revealed that buildings (66%), jewellery (62%), contents (59%), and watches (53%) are the areas in which clients are most underinsured.
According to RebuildCostAssessment’s latest statistics, 76% of UK buildings are underinsured. The graphic above highlights these staggering statistics, showcasing that many policyholders may need to review their level of insurance.
How are HNW clients underinsured?

Consolidation in the HNW insurance market has seen AXA XL and Azur both being acquired, and other insurers have ceased to be active in the sector

Mergers & acquisitions of high net worth focused businesses has created ‘one of the hardest markets’ for placing these specialist risks. Consolidation of the likes of AXA XL and Azur by Aviva, plus a number of significant market exits – such as Nationwide, Covéa and AIG, last year – have led to a restriction in the capacity available in the market.

Insurance review: your next step in addressing rising rates

Consider scheduling a meeting with your independent insurance advisor to map out the best course of action to navigate the current insurance market. A comprehensive insurance review can address the cost and placement challenges consumers are experiencing today, ensuring you have appropriate coverage and assistance in structuring a long-term insurance plan.
Here are some recommendations high net worth individuals and families can immediately consider while reviewing their insurance programme:

Other blogs which may be of interest:

Why home insurance premiums continue to rise
Your simple guide to high net worth insurance

There’s no time like the present, and our team is here to help – get in touch with Matthew.Collins@ascendbroking.co.uk or Amy.English@ascendbroking.co.uk to navigate the intricacies of the insurance market. The Ascend team is here to answer your questions and offer a strategic roadmap for your insurance needs.