Household Insurance for the Affluent

The high net worth insurance market is in the midst of rapid change. Insurers are expanding their range of HNW products to keep pace with changing customer demand. Furthermore, competition for the mid net worth market is exploding driven by the growing number of mass affluent individuals and the issue of under insurance

REPORT HIGHLIGHTS

Insurers have always targeted the lower end of the HNW market or what is increasingly referred to as the Mid Net Worth (MNW) market. However, a number of insurers launched specific policies for this target segment last year
The number of UK HNW individuals is forecast to increase from 571,100 to 841,300 between 2002 and 2007, a compound average growth rate of 8.1 per cent. This presents a vast potential for HNW providers to increase their policy count
Bank based distribution is in its very early stages as the majority of banking customers haven't traditionally fitted into the HNW category. However, the banking channel may assume increasing importance with the growing number of products aimed at the MNW market
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CHAPTER 1 MARKET CONTEXT

Introduction
What is High Net Worth Insurance?
Who are HNW individuals?
Market size
New developments to the Datamonitor Global Wealth Model
The number of HNW individuals fell in 2002
Penetration rates remain low
Little growth in premium rates
The issue of under-insurance
Mid Net Worth Insurance

CHAPTER 2 DISTRIBUTION

Intermediaries dominate distribution
Banks may play an increasingly important role
Cutting costs via Internet distribution
Online claims systems

CHAPTER 3 COMPETITIVE DYNAMICS

The market is split between specialists and composites
SWOT analysis
Competitor profiles
Other competitive developments in 2003

CHAPTER 4 CUSTOMER FOCUS

Introduction
Strategies for targeting HNW customers
Provide impeccable service
A growing need for protection cover
Communicate your financial strength
Targeting the MNW customer
HNW insurers should target the elderly

CHAPTER 5 THE FUTURE DECODED

The number of HNW individuals is forecast to grow strongly
Penetration
Premiums

CHAPTER 6 APPENDIX

UK HNW individuals by age
New developments to the Global Wealth Model
The New Methodology
The UK model
Differences to the old model
Further information
Forecast Assumptions
Current publications
Future publications
Datamonitor’s custom research capabilities
SPP writing team
How to contact experts in your industry
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Table 1: Number of UK HNW individuals by liquid asset band, 1997-2002e 10
Table 2: The number of MNW individuals in the UK, 1997-2002e 16
Table 3: Forecast number of HNW individuals in the UK, 2002-7 35
Table 4: UK HNW individuals by age band, 1997-2002e 36
Table 5: Development of macroeconomic indicators, neutral scenario 38
Figure 1: The number of HNW individuals fell between 2001 and 2002 10
Figure 2: How Hiscox’s Mid Net Worth insurance policy compares to the standard policies available in the marketplace 14
Figure 3: Insurers offering specific MNW and HNW products 15
Figure 4: SWOT analysis of composite HNW insurers 21
Figure 5: SWOT analysis of specialist HNW insurers 22
Figure 6: How to target the elderly high net worth 32
Figure 7: The number of HNW individuals is forecast to grow strongly between 2002 and 2007 34
Figure 8: Datamonitor’s core consulting capabilities 40
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