High-net-worth individuals are showing a significantly reduced appetite for risk in their insurance decisions, with only 25% now willing to assume more risk for premium savings, a stark decrease from 39% in 2023. This shift, detailed in a new outlook from HUB International, reflects a broader trend of conservative insurance strategies among affluent individuals navigating market volatility and persistent coverage gaps. Many are responding by increasing deductibles, accepting carve-outs, and prioritizing resilience measures for their properties.
What is driving this change in risk tolerance? The primary drivers appear to be ongoing market volatility and the difficulty in securing adequate property insurance, especially in catastrophe-prone areas. This has led many high-net-worth individuals to adopt more cautious insurance approaches.
The struggle to obtain sufficient property insurance is particularly acute, with 77% of respondents to HUB’s private client outlook survey reporting difficulties. Regions with significant wildfire, flood, or coastal exposures, including California, New York, New Jersey, and Texas, are experiencing limited capacity from insurers.
Katherine Frattarola, head of HUB Private Client, acknowledges the tumultuous past few years but notes a positive development: a beginning stabilization or softening of the high-value property insurance rate environment in some geographies. The question remains whether this correction is long-term or short-term.
Insurers have been working to achieve rate adequacy, and while the impacts of recent weather events have been somewhat muted for high-net-worth individuals, rates remain elevated. Reinsurers have better managed risk, and carriers have improved their models and portfolios.
This doesn’t mean rates are cheap or will return to levels seen five years ago, but the massive swings experienced in the past are broadly less prevalent. Some previously challenging areas, like Florida, are seeing rate reductions due to recent reforms that have attracted new carriers.
However, these pockets of improvement are exceptions. HUB forecasts that U.S. high-net-worth homeowners’ rates will likely remain flat to increase by 5% in 2026. Carriers are now focusing on strategic risk management, aligning pricing with individual property characteristics and mitigation efforts.
Homeowners who invest in protective measures such as roof upgrades, water detection systems, or wildfire defensible space are more likely to benefit from favorable pricing and renewal terms. Market conditions are also improving through policy structure refinements and underwriting practices that enhance carrier profitability without solely relying on rate hikes.
These adjustments include capping certain coverages, like loss of use, and incentivizing higher deductibles to encourage shared risk. Wind-related rates for high-net-worth policyholders are projected to remain flat or decline by up to 10% next year, while wildfire rates are expected to increase between 5% and 10%.
The insurance market for HNW homeowners has been volatile over the past three years, exacerbated by the frequency and severity of weather events. Post-COVID supply chain issues increased replacement costs, and large jury awards against carriers also contributed to inflation.
When states delayed significant rate increases, carriers exited markets, placing more burden on homeowners. However, macroeconomic forces have begun to even out, creating an avenue for rate stabilization. While some areas remain challenging, a blended geographic view suggests a leveling out.
Yas Nahali, executive vice president at Amwins, describes the national high-net-worth property market as “micro-regions,” with some parts of Florida experiencing softening rates while areas like Los Angeles remain hard. MGA activity and standard markets are cautiously re-entering challenging regions with tighter underwriting.
Now is an opportune time for brokers to negotiate the best terms and conditions for their high-net-worth clients, utilizing all available tools for comprehensive coverage. Brokers can leverage variations in insurer comfort levels and underwriting appetites to secure favorable terms.
This strategic negotiation can create a win-win situation, aligning insurer comfort with client needs. The 2026 HUB Outlook High-Net-Worth Survey offers key recommendations, including bolstering resilience through mitigation investments, updating brokers on property changes, considering cyber and reputation management policies, and regularly informing brokers of life events and evolving risks. Personal umbrella rates are also expected to increase by 10%-12%, driven by rising auto liability loss severity and heightened emphasis on geographic exposure in high-litigation jurisdictions.
Why is high-net-worth insurance facing these challenges? The combination of increased weather event severity and frequency, supply chain impacts on replacement costs, and the burden of high jury awards has created a challenging environment for insurers, leading to reduced risk appetite and more conservative underwriting.
High-net-worth insurance rates are expected to remain stable to slightly increase in 2026, with wind-related rates potentially declining while wildfire rates may see a rise.
What are the best strategies for high-net-worth individuals seeking insurance? Investing in property resilience measures, maintaining open communication with brokers, and actively negotiating terms and conditions are crucial for securing adequate and favorable coverage.
How to navigate the current high-net-worth insurance market? Brokers can act as key negotiators, leveraging their access to multiple insurer proposals to find the best terms and conditions for clients, especially in areas where certain insurers have a higher comfort level.
Is Florida’s insurance market improving for high-net-worth individuals? Yes, recent reforms have attracted new carriers, leading to rate reductions in some areas, though these improvements are not universal across the state.
What is the outlook for personal umbrella insurance? Rates are projected to increase by 10%-12% due to rising auto liability loss severity, with a focus on geographic exposure in high-litigation areas.
What is the primary driver for HNW insurance rate increases? Rising loss severity in auto liability remains a key factor, particularly in jurisdictions with elevated litigation activity.
How can homeowners benefit from property resilience investments? Investing in measures like wildfire defensible space, water detection systems, and roof upgrades can lead to more favorable pricing and renewal terms.
What is the current risk appetite for high-net-worth individuals? It has dropped sharply, with fewer individuals willing to assume more risk for premium savings, indicating a more conservative approach to insurance.
What are the key recommendations for HNW clients regarding insurance? Bolstering resilience, updating brokers on property changes and life events, and considering specialized policies like cyber and reputation management are crucial.
What are the main challenges in high-net-worth property insurance? Limited capacity in catastrophe-prone regions and the difficulty in securing adequate coverage are significant issues for homeowners.
How is the insurance market for HNW homeowners evolving? Insurers are shifting focus to strategic risk management, aligning pricing with property characteristics and mitigation efforts, rather than solely relying on rate increases.
What is the impact of geographic exposure on insurance premiums? Premiums are higher in “judicial hellholes” with elevated litigation activity, leading to stricter underwriting and reduced carrier appetite.
What role do brokers play in the HNW insurance market? They are becoming key negotiators, leveraging their access to multiple insurers to secure the best terms and conditions for clients.
Is the HNW insurance market stabilizing? There are signs of stabilization and softening in some geographies, although rates remain elevated compared to historical levels.
What are the main factors contributing to insurance market volatility for HNW individuals? Market volatility, coverage gaps, and the difficulty in securing adequate property insurance are key contributors.
