In Focus: Are HNW lifestyles evolving faster than traditional risk models?

The high net worth market (HNW) is one that has become more competitive, with demand for products having increased over the years.

The HNW market brings together a diverse range of expertise and is where wealthy individuals go to protect and indemnify their physical assets against harms or loss.

In January 2025, Simon De Ferry, chief insurance products officer at Acturis, said that, according to his firm’s data, gross written premium (GWP) and policy volumes increased 20% and 10% respectively over 2024.

However, while there is growth in this corner of insurance, HNW clients’ lifestyles are changing to a point where Ellie Dunn, associate director at Brown and Brown Orpington, warned that “lifestyles are evolving faster than many traditional risk models”.

She told Insurance Times: “The reality is that the pace of client innovation is outstripping the industry’s ability to respond.

“To stay relevant, insurers must evolve decisively to meet the changing expectations of a more empowered and risk-aware clientele.”

Nick Corbin, HNW manager at broker Acres Insurance, added: “There’s lots of these new millionaires coming into the game and they are making their money – it’s certainly not traditional methods these days.”

Younger generation creating wealth

So, what is changing in the HNW market? Well, one thing to note is that the typical risk profile is not what it once was, with younger people creating wealth much faster through multiple ways, such as through advancements in technology and cryptocurrency.

Cryptocurrency refers to a peer-to-peer digital payment system that is typically stored in digital wallets, for example, Bitcoin. 

Bitcoin, meanwhile, is a digital, decentralised cryptocurrency that can be traded between individuals without the central authority of a bank or government.

Dunn said: “Most insurers still prefer clients over the age of 45, with long established wealth and a steady track record. That’s not, however, what the new generation of millionaires and billionaires looks like.

“People are creating wealth much faster and at a younger age, often through tech or crypto etc, and many insurers see that as higher risk simply because the experience and history isn’t there yet.”

Corbin added that insurance firms “want to feel very secure” and that investments like cryptocurrency can be seen “as a big risk”.

In turn, Corbin said profiling how money has been made and how quickly it has been made is key for an underwriter.

He said: “All HNW carriers want to feel very secure of who they are taking on.

“So, profiling is always a big thing when it comes down to it. Yes, they’ve got a lot of money, but how quick have they made it and how have they made that money as well?

“And if it is that we’re talking [about] people dabbing with investments such as crypto and stuff, I guess you look at that as a big risk.

“The market for things like that, one minute you’re up, one minute you’re down.

“So, there’s always that risk from an underwriter taking on these profiled individuals that are changing the way and the scope of how HNW individuals are emerging these days.”

Spending time away from UK and Airbnb

Meanwhile, Dunn also highlighted that there are HNW clients choosing to relocate or spend more time outside the UK.

According to the British Council’s Next Generation UK 2024 report, published in December 2024, nearly three-quarters (72%) of UK based 18–30-year-olds would consider living and working in another country in the short or long-term.

Their primary motivations include enriching cultural experiences, the perception of a better quality of life and enhanced job opportunities.

Dunn said that there are insurers still focusing on clients whose main residence remains in the UK, despite people wanting to spend time away from the UK.

She said: “In recent months, influenced by a range of economic factors, we’ve also seen an unprecedented number of HNW clients choosing to relocate or spend more time outside the UK. Warmer climates, lifestyle advantages and favourable tax regimes are all major attractions and for many, being in the UK full-time no longer makes sense.

“The challenge is that many insurers still focus on clients whose main residence remains in the UK, which doesn’t always align with this increasingly global way of living.

“There’s also very little in the way of a true international insurance market for families with homes, cars and assets dotted around the globe.”

Nick Gildea, underwriting operations manager at Bspoke Private Clients, added that “any deviation from standard household usage or requests to provide cover that may be better placed with a specialist market tend to require bespoke solutions or will be too difficult to cover”.

He also highlighted a trend around requests for Airbnb and holiday let has become more common for HNW clients. According to data from the Office for National Statistics, published May 2025, from January to December 2024, there were 90 million guest nights spent in short-term lets in the UK.

Of these, England had 70.3 million (78.0%), Wales had 6.3 million (6.9%), Scotland had 11.4 million (12.7%) and Northern Ireland had 2.2 million (2.4%).

Gildea said: “In recent years a trend to request Airbnb / holiday let has become common, which some insurers are happy to accommodate whilst others tend to decline.”

And going onto explain other risks that may be too difficult for an insurer not specialising in a specific market to cover, Gildea added: “Significant commercial activity such as farming, manufacturing, equine facilities etc would tend to fall outside of the standard HNW market appetite and would almost always result in a decline as there are more niche or speciality insurers who would be better placed providing cover for these.”

Do risk models need to evolve?

Despite these types of risks being difficult to cover, Gildea explained that in his experience, “HNW insurers tend to be flexible and open to dialogue to discuss the needs of the client even if this is deemed high exposure – so where possible underwriters will always look to accommodate or offer some solution where possible”.

However, he also felt that insurers’ risk models “needs to constantly evolve to keep pace with various changes in the market”.

He continued: “Whether that is using cutting edge data enrichment and technology to gain better insights into a risk, or keeping abreast of modern construction materials and techniques to better inform underwriting decisions and pricing.

“Regular reviews of the market trends and conditions and the changing needs of HNW clients will undoubtedly result in incremental evolution of a risk model – if this is done correctly there shouldn’t be any surprises to the insurer and they should be well placed to deal with most eventualities.”

Corbin added that the industry was facing “the new norm” and that underwriters “certainly do need to adapt”.

“With the massive change from where individuals are getting their wealth from, or not the traditional style of getting this sort of level of wealth, there needs to be something worked around it,” he said.

“There’s always terms that can be applied for certain risks, but at the moment where we are seeing something that’s a little bit off the norm, you’re probably going to get a no without someone sort of thinking how we underwrite around this.

“There’s definitely scope for movement at the moment anyway.”