A quarter of high-net-worth respondents in HUB International’s Outlook 2025 study cited safety as one of their emerging top concerns in the new year, up from 15% a year ago.
Wealthy families are facing more challenges in securing adequate insurance coverage, particularly for high-value properties in catastrophe-prone areas, and insurance carriers are growing more reluctant to underwrite policies in these regions, the global insurance broker and financial services firm reported. Yet, only 31% of affluent respondents said that they are willing to accept greater financial risk to lower insurance costs, down from 39% in 2023.
“Affluent families are facing a perfect storm of rising insurance costs, a shrinking availability of coverage and an increasingly complex risk environment,” Katherine Frattarola, head of HUB Private Client, said in a statement. “The evolving complexity includes vulnerabilities associated with lifestyle, safety and security, and they will play a greater role as we look towards the future.”
For its new report, HUB surveyed 200 high-net-worth individuals and their advisors on the issues affecting affluent families and strategies to safeguard wealth. HUB also surveyed 900 business leaders across corporate, risk, human resources and education/non-profit functions from companies in 11 sectors in the United States and Canada.
Beyond property, other areas that require closer consideration for affluent consumers include the collectibles market, theft and accidents, cybercrime and social inflation, according to HUB.
Reassessing Risk Exposures
Risk management for many affluent families has become less a matter of how much premiums will cost and more an issue of how much financial risk they are willing and able to accept. Either by choice or for lack of a better option, more families are assuming higher levels of exposure, a trend that HUB expects to continue.
Seven in 10 respondents to the HUB survey reported that they have had trouble securing sufficient property insurance in the past year, leading some to redefine what they consider to be “sufficient.”
HUB found that most high-net-worth families are engaging in some level of self-insurance, typically by setting deductibles higher or dropping riders to reduce their premiums. The small but growing cohort who are choosing to fully self-insure face far more complex issues, mainly because the value of insurance goes well beyond claims settlements.
According to HUB, carriers who work with wealthy families typically provide services to improve resiliency, issue warnings when major weather events are imminent and mobilize recovery vendors and contractors to repair damage. Those who self-insure would have to secure those services by themselves.
As the trade-offs between the cost and level of coverage become more complex, HUB said it will be increasingly important for affluent families to work with a qualified advisor to determine the optimal balance. Risk advisors should be prepared to engage clients in more frequent and wide-ranging discussions around managing risk exposure and improving their resilience.
Covering Collectibles
In the volatile collectibles markets, prices tend to soar and retreat as different types of rarities move in and out of vogue. Little protection for market losses exists, but there are important considerations for protecting the value of collectibles through proper storage and handling and for adequately insuring against loss due to damage or theft.
