MARKET REPORT 13


Mid net worth is the right cover for many brokers’ clients. While true net worth is aimed at the extremely wealthy, much of middle England - and beyond - would benefi t from household insurance that has a wider remit, better claims service and higher sums insured than standard policies.


This is also an area where brokers should be able to add some advice. The relentless focus on buying insurance at the lowest possible price without paying due attention to the quality. RSA is the latest insurer to improve its current mid net worth offering, which is also available online.


The policy provides buildings cover for up to £2 million, contents of up to £300,000 and motor cover including classic cars and family fl eets via one single policy and full cycle system.


The product will be provided through Selfnet, a specialist provider online insurance solutions. Daniel Venner, personal lines trading director at RSA, said: “Mid net worth individuals currently make up 10 per cent of the UK’s population and the types and values of their assets mean that their insurance requirements are often more specialised than those provided for by standard policies. RSA’s new MNW product addresses these needs while at the same time keeping things simple for the broker.”


Fortis has also recently launched House Guard Prestige, which the insurer says will specifi cally target the 1.3 million homeowners who require a higher level of household cover than that offered by standard products.


The new product has a maximum claims limit of £150,000 for contents (compared to £80,000 for its standard product, House Guard Extra) and £1 million for buildings (compared to £500,000) and will automatically offer £5,000 of worldwide cover for personal belongings, money, credit cards and pedal cycles.


All elements of Fortis’ 5-star Defaqto rated 2 House Guard Extra product have been included, with many limits increased as part of this specialist proposition.


Additional product highlights include:


hole-in-one golf cover which guarantees cover for customers’ celebratory post-game clubhouse bar bill (up to £500) and cover for: student belongings, parents’ or grandparents’ contents in a nursing or residential care home, the cost of retrieving personal or business data stored on a computer, loss of non-recoverable downloaded data, contents in storage, fi ne art and ID theft cover


Buildings cover includes accidental loss of metered water or oil, garden cover and alternative accommodation for up to 30 days if a local authority evacuates a neighbourhood Fortis has ambitious plans for the product says head of household underwriting, Stephen Linklater. “While there are some brokers who seek to avoid personal lines, not catering for mid net worth customers is a missed opportunity. It is likely to suit brokers’ clients as they are less likely to be solely focused on shopping around for the cheapest price.”


He adds that the product was also developed in consultation with brokers. “It was invaluable getting feedback on what they wanted and what they think of it now the product is launched. We see this as an important growth market for brokers and recently held a mid net worth forum at our Eastleigh offi ces, where invited a number of intermediaries to discuss how to get the most out the market and we’ll be holding another one next year.”


So, when is a mid net worth product suitable? According to David Sweeney, director of general insurance at Sterling Insurance, says that home contents limits for the sector used to be about £50,000 but now they are typically £75,000 to £100,000. “Things are more expensive and we all have more costly items in our homes - typically electrical good and clothes can often be surprisingly valuable if you look at the full sums insured. It is an ideal talking point for brokers, often when they are speaking to commercial customers.”


It is notable that a number of insurers are now focused on providing brokers with online products, and among the fi rst to launch was Plum Underwriting - in fact it claimed to be the fi rst to provide an online quote and buy facility for brokers to sell mid net home insurance with Lloyd’s capacity.


The fully transactional website allows ‘clean’ risks to be bound instantly, and is based on its online rating and quote engine and it considerably shortens the time it takes for


brokers to bind a risk from initial quotation compared with traditional methods.


While there is no doubt that fewer brokers now specialise or even want to offer personal lines, Mr Sweeney adds that it is likely they are missing a trick. “Mid and high net worth are best sold by someone who has both a thorough understanding of the cover and who also wants to provide a high level of personal service.”


He explains that Sterling has increased the amount of support it offers to brokers in this area. “We know that the brokers who are most successful in this area will have a dedicated member of staff to focus on. This is why we want to offer support - so we can assist in a variety of ways from helping with recruiting, training and funding and we’d encourage brokers who see this as a way forward to contact us.”


He continues that commercial clients are likely represent a strong source of quality high net worth home business, with average premiums as high as SME commercial cases in many circumstances. He adds: “Retention rates are usually excellent and so the lifetime value of the clients is very signifi cant, and it also helps the broker cement the relationship with the customer.”


Meanwhile, Mark Coffey head of personal lines, for Zurich’s broker division, says his company is also concentrating on the mid net sector. “We have always aimed to offer quality insurance, but there is clearly a gap between those who are the top end of a standard policy and true high net worth.


Zurich’s Home Solutions Advantage is available on a full cycle EDI basis and is aimed at customers who have contents totalling between £60,000 and £125,000. The product also benefi ts from world-wide contents cover and automatic accidental damage cover. A fl exible limit has been included for jewellery and watches and there is a generous limit for fi ne art and collection among other benefi ts.


Mr Coffey adds: “Being able to offer and advise on better home insurance cover is a differentiator. It is about having that dialogue and knowing your customers - we see mid net worth as a core area for brokers and is something they should be looking to know more about.”


July/August 2010 Insurance Brokers’ Monthly


mid net worth - opportunities


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