The Myth of the Mid Net Worth market

The Myth of the Mid Net Worth Market…Finding New Opportunity

We all know the value of the High Net Worth (HNW) market and working with clients who have an ongoing need for serious and specialist levels of cover.

With many of these customers using brokers to advise on their insurance requirements, the same model can be used to build other revenue streams.

Casting your eye on the Mid Net Worth (MNW) market - and migrating clients from standard to MNW cover - could be the answer.

While it is true that a significant number of those falling into this category are motivated by competitive pricing, the sector presents real opportunities for brokers willing to play a long game and deliver value outside of the traditional price driven model.

MNW individuals are looking for a more comprehensive offering - combining the convenience of mass market options and pricing with the benefits of a bespoke or wrap-around broker service.

Future-gazing

There is a further long-term opportunity here too with many of today’s Mid Net Worth individuals are destined to be the High Net Worth clients of tomorrow. As their salaries and assets grow they will need and continue to expect higher levels of cover.

For now, brokers can identify new MNW clients guiding them through their options - whether to buy ‘off the shelf’ as well as considering bespoke options too.

A Sense of Trust

Building relationships and offering efficient, professional advice and guidance can foster partnerships that will endure and grow with these changing clients’ demands. It’s about building a trust framework that delivers above and beyond their insurance expectations – that’s why they use brokers, to help and advise on potential situations they may not even have considered.

The population as a whole is becoming more affluent and monitoring this changing demographic will help identify MNW opportunity and where clients have gaps in cover.

Bridging the Gap

RSA’s Personal Intermediated Managing Director Mark Coffey explains it’s a market they have seen grow steadily over the last decade but brokers can still do more to capitalise on their presence.

Greater customisation and investment in digital are both key.

Mark says “In the past ten years we have seen a growing number of people becoming’ affluent’ and the penetrated market (customers recognised as MNW and on MNW products) is also growing.

“The challenge now is identifying customers who may be MNW but on standard contracts and possibly under-insured and migrating them into the MNW market too.

“This group has often been overlooked in the past with MNW customers falling between the ‘gap’ between the traditional standard and HNW markets.

The Personal Touch

“The internal operating model for standard home insurance uses ‘fast-flow’ underwriting and servicing process using a rules-based approach, high levels of standardisation, and overall impersonal approach.

“In contrast, historically the HNW market has taken a more customised approach, offering high levels of case ownership and a heavy focus on quality of service, flexibility and product.

“So how should this new breed of MNW customers be served? What should the internal operating model look like? Are these customers more similar to HNW or to standard customers?

“Insurers have struggled with all these challenges and this has caused them to be more internally, than externally focussed, creating an impression that this segment has been overlooked.

“Looking forward, we can predict that the MNW will continue to grow and people will generally continue to become more affluent, meaning a greater demand for MNW (and HNW) products and services.

“The question is, how will we as an industry identify these customers and move them from the standard, to the MNW market?

“In addition, brokers may wish to consider how they can inspire a next generation of affluent individuals to engage with their service providers.

“We are operating in a digital age where people are increasingly deciding how they wish to engage with (or buy) their products or services, ahead of what they actually buy.  The days of innovation meaning simply increasing product coverage, are fading. In today’s market, true innovation is about fundamentally changing what we need and the way we do things.

“Brokers need to build a comprehensive strategy, one which allows them to fully engage with customers, offering the type of comprehensive and customised service today’s MNW individuals deserve and demand.”

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