Ken research announced recent publication on, "Targeting UK Mass Affluents with Insurance." The report explores the differing
attitudes and insurance needs of higher affluence customers in comparison to
the mass market. It explores the demographics of the group, the products they
hold, and their purchasing preferences. It also highlights the leading
providers for mass affluent, and discusses the opportunities and best ways
providers can reach and engage with this customer group. It can be put to use
my marketers to understand the differing needs of very affluent customers in
comparison to the mass market and to improve customer engagement by recognizing
what is most important to mass affluent customers and how insurers can adapt
their products and services to meet their needs. It is a suitable solution to
discover the top providers within the very affluent insurance market and thus,
to explore the opportunities the mass affluent market provides in terms of
insurance innovation.
The ‘mass affluent’ represent an important target
market for the retail banks, with several offering ‘premium’ products and
services designed specifically for this moderately wealthy demographic. The level of financial wealth held by UK
households has increased by dramatic proportions in the last twenty years. Offering a premium or lower-entry private bank account
not only helps to reach these more profitable individuals, but also acts as a
useful gateway product, through which other products and services can be
channelled. The mass affluent population in the UK is growing, meaning the
demographic is an opportunity for providers selling personal insurance. Mass affluent
are more likely to be male, have higher household incomes, and be married
compared to retail customers. The assets of mass affluents are higher value,
making their insurance needs more complex. They have different lifestyles
compared to retail customers, meaning they also have different insurance needs.
They travel abroad more often, and are more likely to own a second home, a car
that requires specialist insurance, and high-value items that require
additional cover.
The main reason for this marginal slow down in the rate of financial
wealth accumulation is that we are not expecting another bull-run on the London
stock market. However disposable income growth and savings rates are expected
to remain as high as they have been in recent years. The factors determining
wealth distribution – world trade, labour market deregulation, self-employment,
executive stocks and options, the technology entrepreneurs, taxation and
attitudes to savings – will in combination act to make the skew in wealth
distribution more acute. Their impact will increase the share of wealth for the
top twenty percent, but their effect will be less intense than it has been over
the last five years. Private wealth is measured in the UK with perhaps more
precision than virtually anywhere else in the world. This is mainly because of
the British affinity for home-ownership and private pensions, two industries
that are closely regulated; London’s importance as a world financial centre,
another source of regulation; and the efforts of the Inland Revenue Service in
securing capital gains and inheritance taxes. However, UK citizens are not
required to declare their wealth levels in the way that they have to reveal, on
an annual basis, their personal incomes. For wealth itself is not directly
taxed; it is the income from wealth – interest, dividends and profits from
assets – that are subject to income and capital gains taxes..
The
sources of financial wealth – why the numbers of ‘mass affluent’ have grown The
distribution of wealth (in its broadest form) in the UK is mostly the result of
wealth accumulation of previous generations. Tax structures and changes in the
nature of employment may have affected the distribution at the margin, but much
of the store of personal wealth has been inherited by its current owners.
Pillars on which this population incremented were:
The
growth of the world economy is a vital engine of economic growth for the UK.
The problems caused by the appreciation of sterling’s value against the euro
zone currencies since 1996 have emphasised the UK’s dependence on the world
economy for trade and job creation. The last decade had seen continual openings
of foreign markets, from eastern Europe to China, as more of the world has
adopted capitalist new consumers and lower cost production facilities, have
encouraged capital mobility on an unprecedented scale.
Labour market
de-regulation
Another
source that has acted to heighten the skew in the distribution of wealth is the
gradual de-regulation of employment in the UK during the 1980s. While
employment law has certainly become more complicated over the last decade,
especially for small companies, there has been increased freedom for companies
to adjust their workforce size and location and to retain and reward highly
skilled workers. This trend has mirrored the decline in influence and
membership of trade unions and other occupational associations.
Self-employment
Self-employment
has been important to financial wealth creation because it not only brings
about greater financial control for individuals who have to provide accounts of
their business but also encourages more detailed financial planning because of
the inherent risks involved in self-employment
The spread of
executive stocks and options
The
use of stocks and options to remunerate and retain staff has increased rapidly
during the last five years. The aim is obviously to tie key staff members into
the medium term business plan, to motivate them and perhaps to defer their full
remuneration until profitability of the business venture has been confirmed.
Government organised share-save schemes, giving tax allowances for employee
share-buying over time, has undoubtedly encouraged this form of remuneration.
The penetration of personal insurance products is
higher among mass affluents than retail customers, and they pay higher
premiums. In the UK, mass affluent individuals tend to be more mature, although
they are not exclusively. This wealthier segment of the population comprises a
diverse range of people: from young entrepreneurs and high-income earners,
seeking to build their wealth, to income-poor but asset-rich retirees, who are
seeking to maintain a good standard of living in retirement and/or
tax-efficient ways of passing on wealth.
Topics covered in The
report
·
HNW market research Report UK
·
UK high net worth individuals Population
·
UK money remittance industry report
·
UK Payment Industry Research report
·
Discretionary asset management Market UK
·
UK wealth management market research report
·
UK Insurance Industry Research report
·
Europe Insurance industry research
·
Targeting UK Mass Affluents with Insurance report
For
more coverage click on the link below:
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