While measures required to tackle climate change remain politically fraught – given the costs of energy transition – a new survey from insurance group Chubb finds that HNW individuals see it as a major threat to their homes.

A survey from Chubb finds that more than three-quarters of wealthy Americans and Canadians believe that damage from severe weather stemming from climate change poses the biggest threat to their home. 

The findings, in the inaugural Wealth Report from the insurer, are based on a survey of 800 high net worth individuals in the US and Canada. They are designed to highlight where concerns about climate change fit into HNW individuals’ risk calculations.

More than three quarters (76 per cent) of those surveyed said exposure to extreme weather caused by climate change is the top risk to their home, while 63 per cent 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 per cent of respondents.

Debate continues on how to view the risks associated with climate change. The cost of insuring against damage is rising. According to the Council on Foreign Relations (August 17, 2023): “American homeowners already coping with extreme weather now face a new risk: disappearing property insurance. Private companies have increasingly reduced coverage, concluding that the risks – and potential losses – threatened by climate change outweigh probable profits. As of now, this primarily affects a handful of coastal US states, including California. In other states, insurers have substantially increased the price of property insurance.”

Deaths from extreme weather events have fallen drastically in past decades, however, suggesting that improved emergency health responses, stouter buildings, improved weather forecasts and disaster preparations have made a difference. According to the World Meteorological Organization, deaths from climate disasters have fallen more than threefold. The question is whether this benign trend will continue.

What is certain is that the risks linked to climate change are part of the wealth management conversation.

“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,” Ana Robic, Chubb Division president, North America Personal Risk Services, said. 

“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,” Jennifer Naughton, executive vice president and risk consulting officer for Chubb Personal Risk Services, said. 

Wealth building
Building wealth is more challenging than ever before, the report said.  Two out of three (66 per cent) 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 majority (83 per cent) are employed, and almost a third of those say they would prefer never to retire. 

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 per cent) say they have a passion for what they collect while 38 per cent see it primarily as an investment. 

More than three quarters of respondents (87 per cent) said listed art fraud was the top risk to their collection, followed by damage during travel/transportation (86 per cent), natural deterioration (79 per cent) and theft/loss (78 per cent). 

Climate and weather also figure in the concerns of respondents regarding their collections, with nearly three quarters identifying loss/damage from fire (74 per cent), followed by loss/damage from storms/floods (64 per cent).