The small business sector is widely acknowledged to be an important part of the commercial insurance market. However, this business segment’s relationship to the high-net-worth market for personal insurance and financial services has not been nearly so well understood.
Executive Summary
The concentration of small business ownership among high-net-worth families suggests an unappreciated opportunity for providers of commercial and personal insurance products, NovaStance Analytics research reveals. Here, NovaStance executives Fritz Yohn and Jim Hearn present data, along with their insights about targeting these families with insurance products as well as financial and real estate services well before events that traditionally trigger coverage offers occur (liquidity events like IPOs and outright business sales).In fact, the small business sector has become even more closely intertwined with this segment of the personal lines market as business growth has shifted toward high-tech industries.
Using family-based data from the Federal Reserve’s Survey of Consumer Finances, this article explores the growth in small business valuations over the past 30 years and the extent to which these increases in valuation have been concentrated in the high-net-worth segment of the household sector. For various insurance and financial services products, the article also discusses the importance of more refined processes to target owners of high-tech businesses, and in turn, this expanding part of the high-net-worth market sector.
