Missing out on MNW

Over the last two years, the term 'mid net worth' has been stretched to include an ever-broadening range of personal lines clients. The MNW catchment is now so broad that it encompasses premiums ranging from £1,200 to £3,500. As such, the term is spread so thin that it is near meaningless.

This has occurred because consolidators and super-provincial brokers have been on the rise - ask them what MNW means and they would probably say premiums of £3,000 and below. However, an independent provincial broker is more likely to regard MNW as £1,500 and below, so definitions vary depending on the size of broker.

Phrases such as 'emerging wealth' try to better describe those in the MNW bracket, though this also carries an assumption that these clients will eventually become high net worth, which is not the case for all MNW policyholders. This is where the debate moves from one of descriptive semantics to that of a business issue. This confusion, along with the lack of a concrete definition of MNW, means that many brokers are not actively seeking out existing clients with standard cover that would be eligible for a MNW policy. As a result, brokers often miss out on enhanced commission and improved client retention due to the availability of superior MNW claims handling and, for the client, better protection.

Brokers sometimes lack the resources or confidence to do this, yet if a client is paying up to £1,000 for standard cover then they may present a genuine opportunity. Middle-aged people are also a group highly likely to move to a MNW policy on the advice of their broker.

While confusion around MNW remains, I would encourage brokers not to be daunted by it. In perusing clients that could benefit from the superior cover of a MNW policy, a broker's value as the client's advocate would be demonstrated clearly, even if some still decide to decline ultimately.

Bob Trott, managing director, Oak Underwriting.