Putting a face to the name...
David Rowntree explains just who are the MNW set....
The Mid Net Worth Market has always been a notoriously tricky sector to pin down and, while most brokers feel confident about identifying High Net Worth (HNW) individuals, many admit to not being quite so clear about identifying their less affluent peers.
So do we need to have a better picture about who the demographic includes? And how can we, as an organisation, support brokers looking to engage with them in order to take advantage of the many opportunities they present?
VALUABLE INSIGHT
MNW customers are a disparate group who do not fit in to a coherent demographic in the way that HNW clients do. Nor is there a clear definition that can be used to categorise them. They are also widespread geographically, cover a wider age spectrum, and are larger than the HNW group. But what makes them especially interesting is that most are not correctly insured to value, and to that extent, are somewhat ‘disguised’ within standard home products.
NON-STANDARD
The MNW market caters for individuals whose insurance needs often cannot be met by the standard market and who are usually insured for contents to the value of between £80,000 and £200,000. This means that they may require a more premium service and be ready to be transferred from a standard product but, at the same time, they might not fit within the limits of traditional HNW minimum sums insured (approximately £150,000 - £200,000).
So the way that MNW customers are identified and engaged with is also an area for review. In addition, as MNW products are also increasingly available via digital channels as well as via a human broker, there’s a strong case for both and pinpointing and serving this group can bring real benefits for brokers. This, in turn, can also open up new revenue streams for the long and short-term.
GOING DIGITAL
Being able to serve these customers digitally, without any need for human engagement but with the option to provide advice if needed, will be vital. It will also promote both greater efficiency and profitability.
Brokers can kick-start this process by raising awareness of the range of products available and highlighting the differences between them. Customers who want to buy digitally will do so; those who want to speak to a person will take this route. But within this changing landscape it goes without saying that brokers should not under-sell their own advice and expertise. Advice will always be valued and, indeed, billed at a premium.
In the short term, investing in digital will help to cut costs and boost efficiency. Looking to the future, it will help create a sustainable business model that is likely to be relevant and competitive and able to better respond to individual customer needs.
As an organisation, RSA is committed to helping brokers achieve these ends, offering a consultancy service to help brokers build the right kind of digital strategy for them and advising on products covering MNW and HNW market segments; RSA Preferred Choice and OAK Underwriting.