Recent trends show that risk exposure is on the rise for high net worth (HNW) clients. The cost to repair their damaged property is up as well. These individuals have high expectations for service and need expert advice to protect their assets. The following risk factors are driving up the costs to safeguard HNW clients’ wealth:

  1. Moving house. COVID-19 changed business as usual for everyone. Many HNW individuals began to reevaluate their priorities and needs. A notable trend is the massive migration of wealth, as twice the number of HNW clients moved in 2020 to a new home or considered it compared to 2019. COVID-19 shifted the traditional work environment, and many individuals are seeking new properties with ample space for home offices.
  2. Less driving. Many companies have reopened their doors, but numerous employees continue to work from home due to health concerns, childcare constraints, etc. Overall traffic is low compared to pre-pandemic levels. However, motor vehicle fatalities climbed 7% from 2019 to 2020 despite fewer people on the roads. Meanwhile, 2021 saw a 10.5% increase in fatalities. Experts believe this is because the remaining drivers exhibit riskier behaviors, and the severity of accidents and claims increased accordingly.
  3. Weather events. 2020 set records for weather and climate-related damage with multiple $1 billion events. Disaster damage cost around $145 billion in 2021, and 2022 saw 15 climate disasters that exceeded $1 billion. Compared to the previous decade, $1 billion events more than doubled.
  4. Repairs and labor costs. Costs to repair or build properties skyrocketed in the wake of the pandemic. Some of the leading factors include soaring lumber costs, an ongoing labor shortage, and increased demand.
  5. Valuable property costs. Many HNW clients have insurance for their jewelry, valuable collections, and other high-end assets. However, many may find themselves underinsured as the value of these items has increased by more than 100% in recent years.
  6. Cybersecurity. COVID-19 forced many people to rely on technology to work, attend school, and shop for basic needs (i.e., clothing, groceries, etc.). However, these individuals often fail to realize their heightened cyber risks, and hackers are taking advantage of the increased web traffic.

Fluctuating circumstances are creating new risks for HWN clients while altering existing ones. HNW clients need knowledgeable agents to navigate these evolving threats and to ensure they have the proper insurance protection. Contact Windermere Insurance Group to discuss your personal insurance needs.