Risk appetite among high-net-worth individuals has dropped sharply, according to a new high-net-worth outlook
from HUB International. Per the report, only 25% of HNW individuals are willing to assume more risk for premium savings—down from 39% in 2023.
HUB found that in response to market volatility and coverage gaps, many are raising deductibles, accepting carve-outs and making more conservative insur
ance decisions, while also investing in resilience measures such as wildfire-resistant materials, water-detection systems and cyber monitoring.
Seventy-seven percent of respondents to HUB’s private client o
utlook survey said that they’ve struggled to secure adequate property insurance for their homes. M
arkets with wildfire, flood, or coastal exposures—such as California, New York, New Jersey and Texas—face limited capacity, the brokerage said in a press release.
“It’s been a very tumultuous handful of years,” said Katherine Frattarola, head of HUB Private Client, which services high- and ultra-high-net-worth homeowners.
In an interview with Insurance Journal, Frattarola shared that “the good news is … we have started to see a stabilizati
on or softening” of the high-value property insurance rate environment in some geographies. “Whether or not this is a long-term correction or short-term, it’s anyone’s guess,” she added.
Frattarola explained that carriers have worked to achieve rate adequacy, and she noted that the impacts of rece
nt weather events on high-net-worth individuals —not counting January’s wildfires in Southern California—have been
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somewhat muted. Reinsurers have wrapped their arms around risk, she said, and HNW carriers have improved their models and remediated their books.
“That doesn’t mean that rates aren’t expensive,” Frattarola explained. “It doesn’t mean that rates are going to be what they were five years ago. It doesn’t mean that
folks are going to smile when they get their renewal. But what it does mean is that we’re not seeing these massive swings, broadly speaking, as we have in the past.”
Some previously challenging regions have even seen rates drop. Among these pockets of improvement is Fl
orida, where HUB reports that recent reforms have attracted new carriers to the state. In some cases, rates have fallen by as much as 30%.
But these locations are the exception, HUB reported in its outlook. The brokerage forecasts that U.S. high-n
et-worth homeowners rates will remain flat to increase by 5% in 2026.
“With profitability beginning to recover, carriers are shifting their focus toward strategic risk management—aligning pricing with individual property char
acteristics and demonstrated mitigation efforts,” the report said. “Homeowners who invest in protective measures, s
uch as roof upgrades, water detection systems or wildfire defensible space, are most likely to benefit from more favorable pricing and renewal terms.”
HUB reported that market conditions have also improved through re
finement to policy structure and underwriting practices that enable carriers to maintain profitability through means other than rate increases.
Some examples of these adjustments include capping certain coverages, such as loss of use, to a percentage of Coverage A, adjusting deductibles for win
d and hail exposures and incentivizing higher All Other Peril (AOP) deductibles to encourage shared risk.
Meanwhile, HUB projected that wind-related rates for high-net-worth p
olicyholders will remain flat or decline by up to 10% next year, while wildfire rates are expected to increase between 5% and 10%.
Frattarola explained that in the past three years, the insurance market for HNW homeowners has been “fairly volatile,” particularly in catastrophe-prone areas. The severity of these weather events and their increased frequency have, in part, shaped this volatility, she said.