Chubb Report Offers Insight on Mindset of the Wealthy, Their Passions and Protecting What Matters

Rhea-AI Summary

Chubb (CB): Survey Reveals Wealthy Americans and Canadians Concerned About Climate-Related Property Damage

Insights

Financial Analyst

The survey by Chubb highlights a growing awareness among affluent Americans and Canadians regarding the risks climate change poses to property assets. This sentiment could influence investment patterns, as individuals may seek to protect their assets through insurance products or by investing in companies with robust climate change mitigation strategies. Insurers like Chubb may see increased demand for their services, but also face higher claim rates, potentially affecting their financial stability and stock performance.

Insurers must balance the rising costs of climate-related claims with the need to remain competitive. The potential for increased premiums and stricter underwriting criteria could impact consumer behavior and the insurance industry's profitability. Investors should monitor how companies adapt to these challenges and the effectiveness of their risk management strategies.

Climate Risk Analyst

The emphasis on climate-related property damage underscores the necessity for enhanced risk assessment models. Companies that offer innovative solutions for climate risk mitigation and adaptation could experience growth. The real estate sector might also adapt, with increased interest in sustainable construction and retrofitting existing properties to withstand severe weather events.

Long-term, the financial implications for various sectors are significant. Companies that fail to address climate change risks may suffer reputational damage and decreased market value, while proactive firms could gain a competitive advantage. Stakeholders should consider the resilience of their investments to climate-related risks.

Insurance Industry Expert

Insurers are at the forefront of assessing the financial impact of climate change on properties. The survey's findings may prompt insurers to revise their risk models and pricing strategies. There could be a shift towards more comprehensive coverage options, but also exclusions for high-risk areas. This evolution in the insurance landscape can alter market dynamics and influence the financial performance of insurance firms.

Investors should evaluate the long-term sustainability of insurance companies' business models in light of these challenges. The ability to innovate and accurately price risk in the face of climate change will be critical for the industry's future success.

Top-of-mind concerns include climate-related property damage, economic instability and potential for ruinous lawsuits

WHITEHOUSE STATION, N.J., Dec. 19, 2023 /PRNewswire/ -- A new survey from Chubb finds that more than three-quarters of wealthy Americans and Canadians believe damage from severe weather stemming from climate change poses the biggest threat to their home. That's among the key findings of the inaugural Wealth Report from Chubb, which gauges perceptions of affluent people about their passions, mindset about wealth and the risks they face in protecting what matters most to them.

"The Wealth Report provides an insightful lens into the concerns and pressures the affluent are facing. It shows a shift in how they value and invest their wealth, who they seek advice from to protect it and what keeps them up at night," said Ana Robic, Chubb Division President, North America Personal Risk Services.

The key findings are based on a survey of 800 high-net-worth (HNW) individuals in the U.S. and Canada. The survey was conducted by iResearch Services on behalf of Chubb and has a margin of error of +/- 4%.

Building wealth is more challenging than ever before. Two out of three (66%) affluent Americans and Canadians say it's more challenging to build and protect their wealth. Survey respondents are also working harder to keep it: the vast majority (83%) are employed, and almost a third of those say they would prefer never to retire. That's true whether their wealth is inherited, self-made or a mix of both.

The HNW are aware of the threats to their homes – and some are taking action to protect them. Over three quarters (76%) perceive exposure to extreme weather due to climate change as the top risk to their home, while 63% named weather-related water damage (e.g. hurricane, flood) as major concerns. The risk of wildfire was a risk too close for comfort for 31% of respondents.

Within the home, over half of respondents (54%) indicated burst pipes and plumbing water leaks is a worrisome top risk. Many are proactively mitigating the climate and internal home related risks. For example, almost half (48%) of respondents installed whole-house generators and smoke and heat detectors, while nearly one quarter (22%) implemented wildfire mitigation (e.g. defensible space around the home perimeter.) Nearly half of the respondents (49%) installed water-leak detection sensors.

"We have experienced the consequences of increasing frequency and severity of weather-related property damage across the country with more powerful storms, wildfires, and the unexpected occurrence of deep freezes in southern states," commented Jennifer Naughton, Executive Vice President and Risk Consulting Officer for Chubb Personal Risk Services. "While weather has received substantial attention, damage within the home from internal sources such as plumbing line failures, leaky waterlines to an appliance or AC units can be destructive and often require long and costly repairs for those impacted."

Homeowners have a passion for their collections – and want to keep them safe from threats. Four out of five respondents are collectors of fine art, jewelry, cars, fine wines and other valuables. Most (62%) say they have a passion for what they collect while 38% see it primarily as an investment. Over- three quarters of respondents (87%) listed art fraud as the top risk to their collection, followed by damage during travel/transportation (86%), natural deterioration (79%) and theft/loss (78%). Climate and weather also figure into concerns of respondents regarding their collections, with nearly threequarters identifying loss/damage from fire (74%), followed by loss/damage from storms/floods (64%).

"It's important not to lose sight that external climate, weather-related risks and vulnerabilities specific to particular items can also impact collections," said Laura Doyle, Senior Vice President, Fine Art, and Valuable Collections Product Leader at Chubb. "We counsel that there are steps collectors can follow to help preserve their collections, including the installation of centrally monitored alarms, climate control systems and emergency preparedness planning."

The wealthy are worried about liability risks, including the potential for a big jury verdict. Nine out of 10 respondents are concerned about the size of a potential verdict against them if they were to be a defendant in a liability lawsuit. Despite that level of concern, just one in three (36%) say they have excess liability coverage. This could be due to the fact that less than half (48%) believe they could be an enhanced target of a lawsuit because of their wealth.

Auto liability risks are also on their minds, with 45% expressing concerns about accidentally hitting a pedestrian and 40% were concerned about liability issues should they be involved in automobile accidents in which they cause bodily harm.

Robic added, "We have observed that many homeowners aren't aware that liability policies are available that go beyond the basic coverage offered in a homeowner's policy. This is where an agent or broker can add value to closing the protection gap by providing expertise and advice to identify vulnerabilities and recommending the right coverage to protect assets and, most importantly, prevent losses from happening in the first place."

The complete 2023 Chubb Wealth Survey report findings can be found here.

Chubb Wealth Report Survey Methodology

Findings are based on a survey of 800 high net-worth individuals in the U.S. and Canada. The survey was conducted by iResearch Services on behalf of Chubb during September and October of 2023. Respondents had investable assets of at least $500,000 with the majority reporting assets of $1.5 million to $25 million. Ten percent (as of Oct 11, 2023) had assets over $50 million. The margin of error is +/- 4%.

About Chubb

Chubb is the world's largest publicly traded property and casualty insurance company. With operations in 54 countries and territories, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients. As an underwriting company, we assess, assume and manage risk with insight and discipline. We service and pay our claims fairly and promptly. The company is also defined by its extensive product and service offerings, broad distribution capabilities, exceptional financial strength and local operations globally. Parent company Chubb Limited is listed on the New York Stock Exchange (NYSE: CB) and is a component of the S&P 500 index. Chubb maintains executive offices in Zurich, New York, London, Paris and other locations, and employs approximately 40,000 people worldwide. Additional information can be found at: www.chubb.com.

Chubb Insurance Company of Canada has offices in Toronto, Calgary, Montreal and Vancouver and provides its products and services through licensed insurance brokers across Canada. For additional information, visit: chubb.com/ca. 

Chubb®, Chubb logo® and Chubb. Insured.^SM are trademarks of Chubb.

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SOURCE Chubb INA Holdings

FAQ

What is the key finding of the Wealth Report from Chubb (CB)?

The key finding is that more than three-quarters of wealthy Americans and Canadians believe damage from severe weather stemming from climate change poses the biggest threat to their home.

Where is Chubb (CB) based?

Chubb is based in Whitehouse Station, N.J.

What are the top concerns revealed by the survey conducted by Chubb (CB)?

The top concerns include climate-related property damage, economic instability, and potential for ruinous lawsuits.