There are more millionaires in North America than ever before. In fact, the number of Canadian households with over $1 million in assets jumped by 23% in 2021 alone. But being in the ‘millionaires’ club’ is not what it used to be.
Chubb–a world leader in insurance–asked 800 affluent North Americans about how they view their wealth, what is keeping them up at night, and what matters most. They found that while the number of affluent families is growing, they are actually feeling less wealthy and more insecure about their future
We had the opportunity to talk to Melanie Wilcox, Executive Vice President Personal Risk Services about Chubb’s inaugural wealth report.
According to Wilcox, one of the key insights in the report was that two-thirds of those surveyed say that building wealth today is more challenging than ever before. In fact, 68% do not even consider themselves wealthy, including many with investable assets of more than $10 million.
So why are affluent individuals feeling so insecure about their future?
When asked what is keeping the wealthy up at night, Wilcox pointed to factors like economic instability, inflation, and even changing weather patterns. Notably, 68% of people in Chubb’s survey listed damage to their property from weather-related events or climate change as a big threat to their wealth. After the wildfire season of 2023–the worst ever recorded–this concern is not surprising (Source: Global). In fact, weather damage–from wildfires to storms to deep freezes–is on the rise everywhere.
However, despite their increased level of fear, Chubb found that only 22% of respondents are actually taking the appropriate steps to protect themselves. That is a significant number of people who are worried, but not doing anything about it. According to Wilcox, there is a growing need to rethink how to protect what matters most to you with risk and insurance management strategies. If you are concerned about the threat of wildfires, for example, sitting down with an insurance agent to talk about your options is a great step. However, there are also practical things you can do to protect your home, including installing sprinklers, changing the type of roof you have, and clearing a defensible space around your home.
When asked about the barrier to getting appropriate protection, Wilcox says it comes down to knowledge. There is a growing gap between the risks that the wealthy perceive and their understanding of how best to protect themselves from those risks. And when you do not understand something or you do not like dealing with it, you avoid it. Many wealthy individuals put their insurance policies on auto-renew and do not give them another thought. Part of the problem is that people do not know which professionals to turn to. Only 52% of those surveyed work with an insurance advisor. Wilcox recommends checking in with an insurance advisor as often as you do with your wealth advisor. Touching base is especially important as your assets change; for example, when you purchase a vacation home or add to your fine art collection. An advisor can help you understand where the risks lie, what the likelihood of those risks are, and the cost to protect yourself against them.
Chubb’s wealth report also looked at how the wealthy are investing in their passions. Eight out of ten respondents reported being collectors of fine art, jewelry, cars, wine, and other valuables. Wilcox points out that protecting those passions is often overlooked, though very important. She recommends staying connected to the right advisors, ensuring the valuations of your collections are up-to-date, and engaging specialists to ensure your passion projects are protected (for example, making sure valuable artwork is properly secured to your walls).
We, of course, had to ask Wilcox about the most interesting collection she had ever come across. Her answer? There have been a lot of amazing cars, but a collection of dinosaur bones is probably the most memorable.
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Source: The Wealth Report: Closing the Protection Gap in a Time of Increasing Risk (Chubb)
