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Mass Affluent/HNW Consumers and Insurance - UK - November 2015

“The profile of the affluent insured is shifting, both among the wealthiest and the aspirational. Insurers are being challenged to keep pace with the changing needs of wealthier people and a tight competitive environment is making it harder to stand out. Forward-thinking product development and scalable client services are integral to future growth.”
– Patrick Ross, Financial Services Analyst

This report covers the following areas:

  • Dedicated, UK-based client services can add value across all wealth levels 
  • Migration and foreign asset ownership demand a global insurance proposition

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Table of contents

  1. Overview

    • What you need to know
    • Executive Summary

        • The market
          • Personal lines business stalls under competitive conditions
            • Figure 1: Personal lines gross written premiums, 2010-14
          • Physical wealth ramps up as people amass household contents
            • Figure 2: Breakdown of household gross physical wealth: Great Britain, 2006/08-2010/12
          • The consumer
            • Home and car cover are the foundation for HNW business
              • Figure 3: Product ownership, August 2015
            • Wealthier people still see value in comparing on price
              • Figure 4: Research activities in the last 12 months, August 2015
            • Renewal outweighed switching in the last 12 months
              • Figure 5: People’s insurance experiences and management behaviour in the last 12 months, August 2015
            • Price is still a key differentiator for wealthier clients
              • Figure 6: Reasons given for switching insurer in the last 12 months, August 2015
            • UK-based customer service helps steer choice of insurer
              • Figure 7: Proportion ranking “UK-based customer service staff” as one of three most influential factors on choice of home insurers, by age and rank, August 2015
            • Loyalty is being weakened by price motivations …
              • Figure 8: Attitudes towards arranging insurance, August 2015
            • …but transparency could help to increase loyalty
              • Figure 9: Attitudes towards cover and value, August 2015
            • What we think
            • Issues and Insights

              • Dedicated, UK-based client services can add value across all wealth levels
                • The facts
                  • The implications
                    • Migration and foreign asset ownership demand a global insurance proposition
                      • The facts
                        • The implications
                        • The Market – What You Need to Know

                          • Intense competition suppresses total market premiums
                            • Household wealth and second homeownership are increasing
                              • The distribution of wealth and the population of wealthy people is changing
                              • Insurance Market Overview

                                • General insurance
                                  • Personal lines business stalls under competitive conditions
                                    • Figure 10: Personal lines gross written premiums, 2010-14
                                  • Direct-dominated motor market presents opportunities for high value car insurance
                                    • Figure 11: Personal motor insurance business (GWP), by distribution channel, 2014
                                  • Private or premium banking product partnerships could deliver growth
                                    • Figure 12: Personal property insurance business (GWP), by distribution channel, 2014
                                  • Life insurance
                                    • Life insurance has stabilised following a period of decline
                                      • Figure 13: Life insurance (GWP), 2010-14
                                    • Life insurance distribution is dominated by advice
                                      • Figure 14: Total regular protection premiums, by distribution channel, 2014
                                  • Trends in Household Wealth and Home Ownership

                                    • Physical wealth ramps up as people amass household contents
                                      • Figure 15: Breakdown of household gross physical wealth: Great Britain, 2006/08-2010/12
                                    • The distribution of physical wealth is skewing towards the highest bands
                                      • Figure 16: Distribution of household goods in main residence, by banded values: Great Britain, 2006/08 - 2010/12
                                    • 1 in 10 people has collectibles or valuables
                                      • Figure 17: Percentage of households with collectibles or valuables (including antiques, artwork and stamps): Great Britain, 2006/08-2010/12
                                    • Identifying second homes is key to growing income from existing clients
                                      • Figure 18: Proportion of second homes abroad, by location, 2013-14
                                    • Migrants are likely to be protective about properties they leave behind
                                      • Figure 19: Reasons for having a second home, of households who own a second home in England, 2013-14
                                  • Population of Mass Affluent/High Net Worth Consumers

                                    • The UK is the top destination for super-rich migrants…
                                        • Figure 20: Countries ranked by inflows of HNWIs*, 2000-14
                                      • …and the popularity of the UK is likely to drive further inflows
                                          • Figure 21: Overseas-born population in the United Kingdom, excluding some residents in communal establishments, by top ten countries of birth, January 2014-December 2014
                                      • Companies and Brands – What You Need to Know

                                        • Product development is key in the battle to stand out
                                        • Competitive Strategies

                                            • Competing on client experience
                                              • Oak Underwriting
                                                • Dual International
                                                  • To split or not to split?
                                                    • Chubb
                                                      • Zurich
                                                        • Pioneering cyber and data protection for individuals
                                                          • PURE Insurance (US)
                                                          • The Consumer – What You Need to Know

                                                            • High home and motor insurance ownership can be converted into cross-sales
                                                              • Wealthier people are still sensitive to price as an indicator for value
                                                                • Communicating product quality has never been more important
                                                                • Product Ownership and Channel Preference

                                                                  • Home and car cover are the foundation for HNW business
                                                                    • Figure 22: Product ownership, August 2015
                                                                  • The direct channel remains important for many
                                                                    • Figure 23: Product ownership, by channel, August 2015
                                                                    • Figure 24: Home contents insurance ownership, by channel and value of investable assets, August 2015
                                                                  • Wealthier people are open to multiple insurance products
                                                                    • Figure 25: Number of different insurance products owned, August 2015
                                                                • Research Methods for Insurance Products

                                                                  • Wealthier people still see value in comparing on price…
                                                                    • Figure 26: Research activities in the last 12 months, August 2015
                                                                  • …but price comparison site use tails off as income rises
                                                                    • Figure 27: Research activities in the last 12 months, by household income, August 2015
                                                                • Recent Insurance-Related Activities

                                                                  • Renewal outweighed switching in the last 12 months
                                                                    • Wealthier people are making mid-term adjustments
                                                                      • Figure 28: People’s insurance experiences and management behaviour in the last 12 months, August 2015
                                                                    • Loyalty increases as people age
                                                                      • Figure 29: People’s behaviour and experiences with insurance in the last 12 months, by age, August 2015
                                                                  • Reasons for Switching Insurer

                                                                    • Price is still a key differentiator for wealthier clients …
                                                                      • …and specialists are being challenged to accept clients from the middleground
                                                                        • Figure 30: Reasons given for switching insurer in the last 12 months, August 2015
                                                                    • Factors Influencing Choice of Insurer

                                                                      • Price is still the most important consideration….
                                                                        • …although UK-based customer service helps steer choice of insurer
                                                                          • Figure 31: Factors influencing choice of home insurer, August 2015
                                                                          • Figure 32: Proportion ranking “UK-based customer service staff” as one of three most influential factors on choice of home insurers, by age and rank, August 2015
                                                                        • The mass affluent put emphasis on lowest price
                                                                          • Figure 33: Proportion choosing ‘Rank 1’ for selected factors affecting choice of home insurer, by value of investable assets, August 2015
                                                                      • Attitudes towards Arranging Insurance

                                                                        • Loyalty is being weakened by price motivations
                                                                          • Previous brand experience is important to nearly one in two
                                                                            • Figure 34: Attitudes towards arranging insurance, August 2015
                                                                        • Attitudes towards Cover and Value

                                                                          • Transparency could help to increase loyalty
                                                                            • Technology will help to lessen insurable risks
                                                                              • Figure 35: Attitudes towards cover and value, August 2015
                                                                            • Cover may be falling short of expectations
                                                                              • Figure 36: Agreement with the statement ‘I am confident that every insurance policy I have covers what I intended to insure in full’, by gross annual household income, August 2015
                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                            • Abbreviations
                                                                              • Consumer research methodology

                                                                              Companies Covered

                                                                              To learn more about the companies covered in this report please contact us.

                                                                              Mass Affluent/HNW Consumers and Insurance - UK - November 2015

                                                                              £1,995.00 (Excl.Tax)