Decline in High-Net-Worth Risk Appetite Amid Regional Stabilization Trends

By Allen Laman

Risk appetite among high-net-worth (HNW) individuals has seen a significant decline, as highlighted in a recent outlook report from HUB International. The findings reveal that only 25% of HNW individuals are willing to take on more risk for premium savings, a notable drop from 39% in 2023.

In light of ongoing market volatility and coverage gaps, many HNW individuals are opting for higher deductibles, accepting carve-outs, and making more conservative insurance choices. Additionally, they are investing in resilience measures, including wildfire-resistant materials, water-detection systems, and cyber monitoring.

A staggering 77% of respondents in HUB’s private client outlook survey reported difficulties in securing adequate property insurance for their homes. Areas prone to wildfires, floods, or coastal risks—such as California, New York, New Jersey, and Texas—are experiencing limited insurance capacity, according to the brokerage’s press release.

“It’s been a very tumultuous handful of years,” remarked Katherine Frattarola, head of HUB Private Client, which caters to high- and ultra-high-net-worth homeowners.

In an interview with Insurance Journal, Frattarola noted, “The good news is … we have started to see a stabilization or softening” in the high-value property insurance rate environment in certain regions. However, she cautioned that whether this trend is a long-term correction or merely temporary remains uncertain.

Frattarola explained that insurance carriers have been striving for rate adequacy. The impacts of recent weather events on HNW individuals—excluding January’s wildfires in Southern California—have been relatively muted. Reinsurers have taken a more cautious approach to risk, and HNW carriers have enhanced their models and remediated their portfolios.

“That doesn’t mean that rates aren’t expensive,” she clarified. “It doesn’t mean that rates are going to revert to what they were five years ago. It doesn’t mean that clients will be pleased when they receive their renewal notices. However, we are not witnessing the massive fluctuations we have seen in the past.”

Interestingly, some previously challenging regions have experienced rate reductions. Florida, for instance, has seen recent reforms that have attracted new carriers, leading to rate decreases of up to 30% in some cases.

However, these instances are exceptions, as HUB forecasts that rates for U.S. high-net-worth homeowners will remain flat or increase by 5% in 2026.

“With profitability beginning to recover, carriers are shifting their focus toward strategic risk management—aligning pricing with individual property characteristics and demonstrated mitigation efforts,” the report stated. Homeowners who invest in protective measures, such as roof upgrades, water detection systems, or wildfire defensible space, are likely to benefit from more favorable pricing and renewal terms.

HUB also noted that market conditions have improved due to refinements in policy structure and underwriting practices, allowing carriers to maintain profitability without relying solely on rate increases.

Examples of these adjustments include capping certain coverages, such as loss of use, to a percentage of Coverage A; modifying deductibles for wind and hail exposures; and incentivizing higher All Other Peril (AOP) deductibles to promote shared risk.

Looking ahead, HUB projects that wind-related rates for high-net-worth policyholders will remain flat or decline by up to 10% next year, while wildfire rates are expected to rise between 5% and 10%.

Frattarola pointed out that the insurance market for HNW homeowners has been “fairly volatile” over the past three years, particularly in areas prone to catastrophes. The increasing frequency and severity of weather events have contributed to this volatility.

“High-net-worth individuals often reside in areas with significant risk,” she explained. Post-COVID supply chain issues have driven up replacement costs, and high-dollar jury awards against carriers have also contributed to inflationary pressures. When states failed to approve significant rate increases promptly, carriers exited markets, leaving homeowners to bear the burden.

However, Frattarola observed that as these macroeconomic forces began to stabilize about a year ago, an opportunity for rate stabilization for high-net-worth homeowners emerged. While some areas will continue to pose challenges for policy writing, “overall, with a blended geographic view, we’ve started to see things level out,” she stated.

In a separate interview, Yas Nahali, executive vice president at Amwins, described the national high-net-worth property market as being divided into “micro-regions.” Some parts of Florida are experiencing softening rates, while areas like Los Angeles remain challenging.

She noted an increase in managing general agent (MGA) activity and standard markets reapproaching previously difficult regions with tighter underwriting or mitigation requirements. Several companies have recalibrated their strategies and are now aggressively returning to certain areas for specific risks.

Now is an opportune time for brokers to negotiate and secure the best terms and conditions for their high-net-worth clients, utilizing all available tools to create comprehensive coverage.

“This is the time to advocate strongly for the client,” Nahali emphasized. “The last few years have not afforded us the opportunity to negotiate terms and conditions, but now we can. It’s crucial to start fighting for the client again and to leverage all tools to assemble a robust program.”

In follow-up correspondence, Nahali highlighted that brokers have a unique opportunity to review proposals from various insurers, allowing them to negotiate terms that favor clients in areas where certain insurers feel more comfortable.

“For example, while some markets may impose strict limits on water damage aggregates, others might be more lenient and open to higher limits,” she explained. “By capitalizing on these variations, we can enhance coverage in a way that aligns with the insurer’s comfort level and serves the client’s best interest, creating a win-win situation for all parties involved.”

The 2026 HUB Outlook High-Net-Worth Survey includes insights from 200 high-net-worth individuals and their advisors, focusing on risk tolerance, property exposures, and insurance decision-making.

Key recommendations from the study for HNW clients include:

• Bolstering resilience by investing in wildfire-resistant landscaping, water sensors, and cybersecurity.
• Updating brokers before and after renovations to ensure accurate valuations and reduce claim issues.
• Considering cyber and reputation-management policies for emerging digital threats.
• Regularly updating brokers on life events, property acquisitions, and changing risks to maintain aligned coverage.

In its annual private client outlook, HUB also projected personal umbrella rate increases of between 10% and 12%. The brokerage noted that rising loss severity in auto liability remains a key factor driving rate increases in the personal umbrella market.

“Carriers are placing heightened emphasis on geographic exposure, particularly in jurisdictions with elevated litigation activity, often referred to as ‘judicial hellholes,’” HUB stated in the report. “Clients residing in these regions can expect higher premiums, stricter underwriting scrutiny, and reduced carrier appetite as insurers work to manage volatility tied to large verdicts and escalating settlement costs.”

By Allen Laman

Risk appetite among high-net-worth (HNW) individuals has seen a significant decline, as highlighted in a recent outlook report from HUB International. The findings reveal that only 25% of HNW individuals are willing to take on more risk for premium savings, a notable drop from 39% in 2023.

In light of ongoing market volatility and coverage gaps, many HNW individuals are opting for higher deductibles, accepting carve-outs, and making more conservative insurance choices. Additionally, they are investing in resilience measures, including wildfire-resistant materials, water-detection systems, and cyber monitoring.

A staggering 77% of respondents in HUB’s private client outlook survey reported difficulties in securing adequate property insurance for their homes. Areas prone to wildfires, floods, or coastal risks—such as California, New York, New Jersey, and Texas—are experiencing limited insurance capacity, according to the brokerage’s press release.

“It’s been a very tumultuous handful of years,” remarked Katherine Frattarola, head of HUB Private Client, which caters to high- and ultra-high-net-worth homeowners.

In an interview with Insurance Journal, Frattarola noted, “The good news is … we have started to see a stabilization or softening” in the high-value property insurance rate environment in certain regions. However, she cautioned that whether this trend is a long-term correction or merely temporary remains uncertain.

Frattarola explained that insurance carriers have been striving for rate adequacy. The impacts of recent weather events on HNW individuals—excluding January’s wildfires in Southern California—have been relatively muted. Reinsurers have taken a more cautious approach to risk, and HNW carriers have enhanced their models and remediated their portfolios.

“That doesn’t mean that rates aren’t expensive,” she clarified. “It doesn’t mean that rates are going to revert to what they were five years ago. It doesn’t mean that clients will be pleased when they receive their renewal notices. However, we are not witnessing the massive fluctuations we have seen in the past.”

Interestingly, some previously challenging regions have experienced rate reductions. Florida, for instance, has seen recent reforms that have attracted new carriers, leading to rate decreases of up to 30% in some cases.

However, these instances are exceptions, as HUB forecasts that rates for U.S. high-net-worth homeowners will remain flat or increase by 5% in 2026.

“With profitability beginning to recover, carriers are shifting their focus toward strategic risk management—aligning pricing with individual property characteristics and demonstrated mitigation efforts,” the report stated. Homeowners who invest in protective measures, such as roof upgrades, water detection systems, or wildfire defensible space, are likely to benefit from more favorable pricing and renewal terms.

HUB also noted that market conditions have improved due to refinements in policy structure and underwriting practices, allowing carriers to maintain profitability without relying solely on rate increases.

Examples of these adjustments include capping certain coverages, such as loss of use, to a percentage of Coverage A; modifying deductibles for wind and hail exposures; and incentivizing higher All Other Peril (AOP) deductibles to promote shared risk.

Looking ahead, HUB projects that wind-related rates for high-net-worth policyholders will remain flat or decline by up to 10% next year, while wildfire rates are expected to rise between 5% and 10%.

Frattarola pointed out that the insurance market for HNW homeowners has been “fairly volatile” over the past three years, particularly in areas prone to catastrophes. The increasing frequency and severity of weather events have contributed to this volatility.

“High-net-worth individuals often reside in areas with significant risk,” she explained. Post-COVID supply chain issues have driven up replacement costs, and high-dollar jury awards against carriers have also contributed to inflationary pressures. When states failed to approve significant rate increases promptly, carriers exited markets, leaving homeowners to bear the burden.

However, Frattarola observed that as these macroeconomic forces began to stabilize about a year ago, an opportunity for rate stabilization for high-net-worth homeowners emerged. While some areas will continue to pose challenges for policy writing, “overall, with a blended geographic view, we’ve started to see things level out,” she stated.

In a separate interview, Yas Nahali, executive vice president at Amwins, described the national high-net-worth property market as being divided into “micro-regions.” Some parts of Florida are experiencing softening rates, while areas like Los Angeles remain challenging.

She noted an increase in managing general agent (MGA) activity and standard markets reapproaching previously difficult regions with tighter underwriting or mitigation requirements. Several companies have recalibrated their strategies and are now aggressively returning to certain areas for specific risks.

Now is an opportune time for brokers to negotiate and secure the best terms and conditions for their high-net-worth clients, utilizing all available tools to create comprehensive coverage.

“This is the time to advocate strongly for the client,” Nahali emphasized. “The last few years have not afforded us the opportunity to negotiate terms and conditions, but now we can. It’s crucial to start fighting for the client again and to leverage all tools to assemble a robust program.”

In follow-up correspondence, Nahali highlighted that brokers have a unique opportunity to review proposals from various insurers, allowing them to negotiate terms that favor clients in areas where certain insurers feel more comfortable.

“For example, while some markets may impose strict limits on water damage aggregates, others might be more lenient and open to higher limits,” she explained. “By capitalizing on these variations, we can enhance coverage in a way that aligns with the insurer’s comfort level and serves the client’s best interest, creating a win-win situation for all parties involved.”

The 2026 HUB Outlook High-Net-Worth Survey includes insights from 200 high-net-worth individuals and their advisors, focusing on risk tolerance, property exposures, and insurance decision-making.

Key recommendations from the study for HNW clients include:

• Bolstering resilience by investing in wildfire-resistant landscaping, water sensors, and cybersecurity.
• Updating brokers before and after renovations to ensure accurate valuations and reduce claim issues.
• Considering cyber and reputation-management policies for emerging digital threats.
• Regularly updating brokers on life events, property acquisitions, and changing risks to maintain aligned coverage.

In its annual private client outlook, HUB also projected personal umbrella rate increases of between 10% and 12%. The brokerage noted that rising loss severity in auto liability remains a key factor driving rate increases in the personal umbrella market.

“Carriers are placing heightened emphasis on geographic exposure, particularly in jurisdictions with elevated litigation activity, often referred to as ‘judicial hellholes,’” HUB stated in the report. “Clients residing in these regions can expect higher premiums, stricter underwriting scrutiny, and reduced carrier appetite as insurers work to manage volatility tied to large verdicts and escalating settlement costs.”