State of the Private Clients Insurance Market
Rate increases and challenging conditions.
Home insurance for High Net Worth clients
The insurance market in 2024 has continued to face significant challenges, with insurers driving rates higher due to ongoing claims inflation and a notable increase in the frequency of losses. This persistent market pressure has led to tighter underwriting criteria, with many insurers recalibrating their risk appetite. Additionally, Managing General Agents (MGAs) have either exited the market or reduced their capacity, further constraining available options.
Over the past 12 months, there has been a marked shift in client behaviour, with a growing emphasis on ensuring that coverage levels align with their evolving needs. Many clients have taken advantage of insurer-supported property surveys to confirm that the building sums insured reflect current values.
With 2025 well underway, the anticipated slowdown in index-linking to single-digit levels has largely materialised. For claim free vanilla risks the market is very competitive with rates dropping and insurers willing to offer keen rates to win business. For risks outside of this we are seeing many more warranties and endorsements being applied by insurers eager to reduce their exposure.
Motor insurance for High Net Worth clients
Motor insurance remains particularly challenging for HNW clients, especially those insuring high-risk vehicles, such as those with a high theft potential. The market for these types of vehicles remains extremely limited, and insurers are applying stricter terms - higher premiums, increased deductibles and requirements for enhanced security features. Coverage for these vehicles is generally available only as part of a larger portfolio, and even then, pricing is reflective.
Standard Home and Motor Insurance
In the standard home and motor insurance market, rate increases in 2024 have been widely communicated in the national press, but we are beginning to see signs of stabilisation. While the market for standard home and motor policies remains challenging, we anticipate a slowdown in rate hikes through 2025. As with the HNW market, insurers are becoming more selective, with non-standard risks both for home and motor increasingly difficult to place.
Our Advice: HNW clients
Given the ongoing tightening of insurer appetite, we recommend the following strategies to ensure continued, comprehensive coverage for your assets:
- As insurers scale back their offerings, we advise combining all personal assets into a single portfolio policy. This approach streamlines coverage and can offer more favourable terms. If you have a high-risk vehicle, consolidating policies into one portfolio is particularly beneficial. PIB Private Clients can assist you with managing and supporting this process.
- It is essential to regularly assess your home insurance policy to ensure that coverage levels remain aligned with current requirements. This review may not necessarily lead to higher premiums. In fact, you may find that certain coverages — such as those related to jewellery and watches — could be adjusted based on changes to personal circumstances or wearing habits.
Superyacht Insurance Update
In 2024, notable claims included the total loss of SY Bayesian, several lithium battery and yard fires and increasing storm damage due to extreme weather. The Baltimore Bridge incident, affecting commercial shipping, will also impact reinsurance pricing. These factors pressure underwriting performance, likely leading to premium increases of at least 5% in 2025.
Insurers are becoming more selective, especially for yachts valued under EUR 20M, racing yachts, catamarans, non-standard constructions, and older or higher-tonnage yachts, particularly in the US/Caribbean. Unattended yachts, especially in marinas, are also raising red flags due to fire and damage risks. Additionally, insurers now require more comprehensive KYC information, both pre-placement and when considering claims.
On a positive note, TIDE launched a new product, increasing market capacity. Crew Medical Insurance remains competitive, with premiums expected to rise around 5% due to medical inflation.
Advice for superyacht owners
- As the market hardens, insurers will favour well-maintained yachts with professional crews and full ownership details. Ensure you allow enough time before renewal to provide the required information. Regular surveys, including NDTs for carbon rigs, will also reassure insurers.
- Be aware that certain decisions, like cruising in remote or war-risk areas, leaving your yacht unattended, or storing it in the Caribbean over summer, may affect your premiums. If your premium increases despite unchanged plans, consider raising your deductible or verifying your yacht’s value to ensure accurate premium calculation.
- ZIS, as part of PIB Private Clients, can assist with policy planning and clarifying any changes in coverage or premiums.