UK insurer Legal & General has predicted that the high net worth sector will become an increasingly important area of the country's protection market within the next decade, as more and more consumers move into this wealth category.
Legal & General quoted research from Barclays that forecasts the UK will have the highest concentration of high net worth households in the G7 area within the next 10 years.
The move towards Britain becoming a high net worth nation, Legal & General said, is based on the increase in personal wealth through property and business. House prices have tripled in value in the past decade, resulting in appreciating assets for homeowners. In addition, according to the Federation of Small Businesses, over half a million people start up their own business every year to boost their own personal wealth.
Legal & General defines high net worth in the protection market as a value of individual life insurance over GBP600,000 or critical illness over GBP350,000. Customers with these policies require an enhanced level of service, the insurer claims.
For example, as high net worth individuals tend to be cash-rich but time-poor, protection advisers and providers must have a more flexible approach. For advisers, this could include an increased level of work outside of normal business hours, and completing as much of the preparatory paperwork as possible before meeting a client.
High net worth customers often require more complex underwriting, for example detailed financial and medical evidence, and therefore require a bespoke approach, Bonnie Burns, Legal & General’s protection marketing director explained. This type of customer expects more than just a good price – it’s about service, service, service.
In line with this customer expectation, Legal & General offers advisers access to a dedicated high net worth team, whose specialist experience enables them to focus on the core skill of assessing the risk (both medical and financial) presented by these applications.
Brokers must go the extra mile if they are to earn the high net worth pound, which means that as a provider we must go an extra two miles, added Ms Burns.