Market Analysis: The Proactive Shift in High-Net-Worth Insurance

Tuesday, 06 January 2026 17:16
Written by: iPMI Global

In this iPMI Global Insights article, we take a look at the 2026 HUB Private Client Outlook. The outlook examines a significant shift in how wealthy individuals manage their personal and financial vulnerabilities. Faced with a volatile insurance market and rising digital threats, high-net-worth families are moving away from passive coverage in favour of proactive risk mitigation and physical resilience measures.

The report highlights that insurance availability remains a major challenge in disaster-prone regions, leading many clients to invest in preventative technologies like water-detection systems and enhanced cybersecurity. While risk tolerance has decreased, there is a growing reliance on specialized brokerage advice to navigate complex coverage gaps and social media exposures. Ultimately, the findings suggest that maintaining comprehensive protection now requires frequent communication with advisors and a disciplined approach to asset preservation.

1.0 Introduction: Redefining High-Net-Worth Risk Management

The high-net-worth (HNW) insurance market is not being reshaped by carriers, but by a client-led revolution in risk perception and management. Affluent individuals and families are aggressively shifting away from a passive reliance on insurance policies, adopting instead a proactive and intentional approach to managing their complex risk portfolios. This evolution marks a pivotal moment for the industry, where active mitigation is becoming as critical as the coverage itself.

This fundamental change is confirmed by Katherine Frattarola, HUB Executive Vice President and Head of HUB Private Client, who notes, "What's changing the most? Client behaviour. Families are being more proactive and responsive to implementing risk mitigation measures and moving away from the assumption that a large standard policy will cover everything."

An examination of key survey data reveals not just a change in sentiment, but a tangible shift in capital allocation towards resilience and comprehensive coverage.

2.0 The Evolving HNW Client: A Paradigm Shift in Risk Tolerance

Understanding the mindset of the modern HNW client is strategically vital, as their changing attitude towards risk is the primary catalyst reshaping product demand and broker relationships in the private client market. The data reveals a clear and decisive move towards caution and a preference for comprehensive security over potential cost savings.

According to the 2026 HUB Outlook High-Net-Worth Survey, risk appetite among these individuals has declined sharply. Only 25% are now willing to assume more risk for premium savings, a significant drop from 39% in 2023. This statistic signals a clear demand for security and robust coverage, indicating that clients are no longer comfortable with coverage gaps.

This lower risk tolerance is translating into tangible actions. However, these actions reveal a critical paradox: to achieve greater security in a hard market, clients are being forced to accept higher levels of retained risk. They are actively working to de-risk their portfolios and lifestyles through a combination of strategic insurance decisions and physical investments:

Accepting necessary trade-offs by raising deductibles and accepting policy carve-outs—not out of a desire for more risk, but as a required compromise to secure essential coverage in a capacity-constrained market.
Investing in physical resilience measures to protect their properties, including the installation of wildfire-resistant materials and sophisticated water-detection systems.
Bolstering digital defences by investing in services like cyber monitoring to protect their personal data and online presence.

This proactive stance is not arbitrary; it is a direct and calculated response to severe and evolving pressures within the broader insurance and risk environment.

3.0 Primary Market Drivers Forcing a New Approach

The shift in HNW client behaviour is not happening in a vacuum. It is a direct response to tangible and escalating pressures that have made traditional insurance strategies less reliable. Two key drivers are forcing this new, hands-on approach: a severe market dislocation in property coverage and the rapid acceleration of complex digital threats.

3.1 The Property Insurance Capacity Crisis

Securing comprehensive property insurance has become a significant challenge for affluent individuals. According to the survey, this is a widespread issue, with 77% of respondents reporting persistent capacity constraints.

This crisis is particularly acute in specific geographic markets that face significant natural catastrophe exposures. States such as California, New York, New Jersey, and Texas are experiencing limited availability of coverage due to their high risk of wildfires, floods, or coastal storms. However, the market is not uniformly challenged. The survey notes localized signs of market stabilization, specifically in Florida, where the entry of new carriers is beginning to increase capacity and may lead to potential rate reductions.

3.2 The Accelerating Threat of Digital and Social Risks

Alongside physical property risks, affluent families are confronting an alarming increase in digital, cyber, and social threats. The scale of this issue is significant; survey data reveals that nearly three in four HNW individuals have reported data loss or theft, and over a quarter have experienced their social media accounts being hacked.

The financial gravity of this problem is underscored by the Insurance Information Institute's 2025 report, which states that cybercrime losses for high-net-worth individuals now exceed $12 billion annually. This growing exposure makes personal cyber risk a top-tier concern that can no longer be overlooked. These mounting market pressures have profound implications for how insurance professionals must engage with and advise their clients.

4.0 Implications and Opportunities for Industry Professionals

To remain relevant and effective in this new environment, brokers and advisors must evolve their service models from transactional policy placement to holistic risk consultation. The data reveals a critical gap between client actions and their perceived effectiveness, creating a significant opportunity for advisors to provide greater value.

While 70% of clients report conducting risk reviews, only 55% find them effective. This "effectiveness gap" exists because clients are often unaware of the complex new data driving underwriting decisions. As insurers increasingly adopt advanced tools like aerial imaging and advanced peril scoring, clients require an expert advisor to interpret this data, explain its impact on their coverage, and recommend the most impactful mitigation steps.

This environment fundamentally redefines the broker's mandate. The role must evolve beyond transactional placement to that of a strategic risk partner, focused on helping clients anticipate threats, build resilience, and make fully informed capital decisions to protect their assets.

5.0 Strategic Recommendations and Outlook

Navigating today's complex risk landscape requires a strategic and proactive partnership between HNW individuals and their advisors. The following recommendations, drawn from the 2026 HUB Outlook, provide an actionable framework for building a more resilient future.

Bolster Resilience: Proactively invest in protective measures that can reduce the likelihood and severity of a loss. This includes implementing wildfire-resistant landscaping, installing advanced water sensors, and subscribing to robust cybersecurity services.

Ensure Accurate Valuations: Communicate with your broker before and after any property renovations. Keeping property valuations current is essential to prevent dangerous coverage gaps and ensure smooth claim resolutions.

Address Digital Exposures: Go beyond standard homeowner’s policies by considering dedicated cyber and reputation-management insurance. These specialized policies are designed to counter emerging online threats that can cause significant financial and personal harm.

Maintain Dynamic Portfolio Alignment: Insurance is not a static purchase. A regular cadence of communication with your broker regarding life events, property acquisitions, and changing liability exposures is essential to prevent critical coverage gaps.

Ultimately, the high-net-worth insurance market is moving decisively toward a more collaborative and proactive model. In this new paradigm, intentional risk mitigation is no longer an optional extra but a foundational component of a comprehensive wealth protection strategy, as crucial as the insurance policy itself.

Christopher Knight, CEO, iPMI Global concludes, “The landscape of risk for high-net-worth families has changed permanently. The era of passive protection is over. The brokers role is to work consultatively with consumers to anticipate risks, strengthen resilience, and make informed decisions. Actively managing threats and maintaining open communication with your advisor are no longer optional—they are the new standard for protecting your wealth, property, and peace of mind.”