Who are the HENRYs?

They’re expected to be one of the largest – and wealthiest – economic groups by the end of the decade.

Experts say paying attention to one group in particular, the HENRYs – High Earners Not Yet Rich – is an easy way to do this; creating a strong expansion strategy for the future.

So who exactly are the HENRYs? And why are insurance companies so interested in them?

Put simply, they are the High Net Worth individuals of the future; well-paid professionals whose incomes are healthy now but as they accrue experience, will be even healthier in the future. They have been a significant demographic in the US for some time but now British financial services teams are looking to them as part of their future planning too.

The term was coined in 2003, originally referring to homes where the main householder was under 55 years old, had an income of more than $100,000 but assets of less than $1 million. According to a 2015 report by Unity Marketing*, US HENRY households increased by 11 percent between 2010 and 2013 – compared to the 2.5 per cent increase reported across other household income groups.

While there are no official UK figures, they are being recognised as a potentially lucrative group here too.

At this early stage in their careers, they may well be still paying off large student loans and living in relatively expensive city-based accommodation, while paying high rates of tax. Despite earning a good salary – they are typically highly-educated and working in well-paid professional jobs with clear career progression – their affluence and ability to spend on luxury items is limited by their out-goings.

The point is, they have strong earning potential and as the High Net Worth individuals of the future, they will have complex and multiple insurance needs. In her book, ‘What do the HENRYs Want?’ marketing expert, Pamela Danzinger, talks of them as, ‘the new consumer segment, the mass affluent who think of themselves as ‘middle class’…a growing, dynamic customer segment with discretion to spend.” With this increased spending power comes a need for advice about investments and insurance.

And while there will always only ever be a small percentage of super-rich individuals in the world, it looks like there will be plenty of HENRYs to keep intermediaries busy.

As you would expect, speaking to the HENRYs via channels they are most comfortable with, is important.

Compared to older clients, they are a fairly high-tech bunch. As true digital natives they’ve grown up socialising, networking and working online and they expect to be addressed via digital channels. They conduct much of their business, including looking for insurance or financial support, online and at a time that suits them, rather than within traditional office hours.

While it might not feel appropriate to contact older clients via email or in the evening, the HENRYs are happy to be contacted on spec, 24 hours a day, talking via web chat or WhatsApp. Delivering cross-platform experiences that are engaging and shareable is an important way to grab their attention as is creating clever marketing campaigns that speak to their sense of aspiration.

But they do share some traits with their older HNW peers – they demand a high level of super-efficient service.

They may not be looking for the same face to face meetings that their parents’ generation expected but they will want the informed choice and best market deals an intermediary can provide.

Speaking in 2016, Lennox Bunting, London market manager at a leading insurer, said: “The next generation is undoubtedly more tech savvy but this has not changed their attitude and approach to insurance.

“There is a higher expectation on service, especially around delivery of documents. “No-one has time to wait around for more than 24 hours to receive a quotation or a simple policy endorsement.

“The younger generation expects insurance providers to be available 24/7, with electronic access to policy documentation and more ways of getting in touch.

“That said, the younger generation does still want to develop a relationship with a provider that can grow with them.”