High-net-worth individuals and families have worrying gaps in their financial security

High-net-worth individuals and families across North America are leaving themselves at risk by not taking some simple steps to protect their possessions, personal information, and reputation, according to a new report from Hub International.

What makes the situation worse is that many of these affluent people believe they are adequately protected but have not updated their insurance policies and other protections to meet current and emerging risks.

The report from global insurance brokerage and financial services firm Hub International reveals that almost 90% of affluent individuals surveyed believe they have a program that adequately covers all aspects necessary to mitigate risk.

The reality is though, that just 16% have recently updated risk management procedures and only one in five of respondents are increasing limits or layering policies to reduce risk.

Also, given the exponential rise in the risk, fewer than one third believe they have adequately protected themselves from cyber threats, and more than half do not have a risk mitigation protocol for travel.

"Elevated interest rates, economic uncertainty and the rising frequency and severity of serious weather events are among many factors making it more challenging to preserve and safeguard wealth than ever before," Katherine Frattarola, Hub executive vice president and head of Hub Private Client, said in a statement. "The survey respondents identified that affluent individuals need to take a more all-encompassing approach to their risk management strategies and leveraging insurance to protect their homes and most-prized possessions, personal information and reputation, and preserve multi-generational wealth against future risks."

The report suggests that high-net-worth people should look beyond typical insurance coverage such as homeowners, auto, and umbrella liability policies, and consider a broader mix of options to protect their wealth now and for future generations.

Education is also important in terms of a multigenerational approach to wealth protection. This means that future generations should understand exposures and vulnerabilities and how the risks are being addressed.