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As inflation and the cost of living soars, new research* has revealed three quarters (72%) of brokers think there is a problem with high net worth private clients being underinsured.
Interviews with 100 brokers who place business with high net worth clients found being underinsured (30%) is a bigger risk facing their high net worth private clients than burglary or theft (20%).
It is more important than ever for brokers to speak to their high net worth clients about the importance of regular valuations and setting and maintaining sums insured at the correct level to avoid the risk of underinsurance.
The Covid-19 pandemic, rising inflation and limited supply has meant that the value of luxury high end watches including Rolex and Patek Philippe watches have soared. Some high net worth clients may not realise their current values and if the worst was to happen and they needed to purchase a replacement, they may find themselves significantly underinsured.
Sarah Willoughby, Art & Private Client Business Director at Ecclesiastical, said: “Underinsurance has always been an in issue in the high net worth sector, but now, set against a backdrop of rising inflation, it’s more important than ever that brokers are speaking to their high net worth clients to ensure they are keeping valuations up to date. As inflation and the cost of living soars, the prices and values of many precious items are also increasing rapidly. While high net worth clients may have existing valuations, these can quickly get out-of-date. Underinsurance continues to be a key issue facing high net worth clients and our latest research has found brokers believe it’s an even larger risk than theft or burglary.”
Ecclesiastical has launched a new enhanced high net worth home insurance product which includes cyber damage, cyber-crime and online liability cover as standard, and optional additional covers including business cover and travel insurance.
The new enhanced Art and Private Client policy will replace the insurer’s existing product for new business and renewals from 12 September 2022.
* The research was commissioned by specialist insurer Ecclesiastical and conducted by FWD. 100 telephone interviews with brokers who place business for HNW / private clients between February and March 2022.