Crisis of Confidence, not Cash, for UK's 'Working Wealthy'

'Rich' Redefined for 2009 in Report on Most Affluent Workers

LONDON, December 7 - The recession has knocked the confidence - but not the cash reserves - of
Britain's Working Wealthy, according to a study released today by specialist
insurer Hiscox.

The Hiscox Wealth Review 2009 reveals that more than 2.5 million UK
households are now identified as wealthy, with an average annual income of
almost GBP93,000* - close to three times the national average household
income of GBP35,000**. However, despite many maintaining a healthy income,
more of the UK's top earners than ever - 95% in fact - do not consider
themselves to be wealthy***.

Rich in cash, poor in psyche

The recession has left its mark on the psyche of the Working Wealthy with
a lack of confidence impacting their perceptions of wealth and appetite for
risk. Whilst two in five (41%) say the recession has not had an impact on the
amount of money they have to spend, almost an equal number (44%) say they are
fearful of the future and have been steadily stockpiling cash.

Three in ten (30%) are taking less risks financially compared to
pre-recession and a similar number (26%) admit they are actually taking less
risks in all areas of their lives.

As a result, the Working Wealthy have made cutbacks across the board -
spending on socialising and restaurants has been slashed by 49% of them, as
well as holidays (41%), weekend breaks (43%) and home decor (38%). In fact,
one in three (30%) are spending more in discount stores.

Nearly a quarter (24%) have not been directly affected by the recession
but feel they need to behave differently anyway. Furthermore, when they are
spending, over a quarter (28%) say they are less conspicuous because they
know people that are struggling financially.

Rich redefined

Despite owning valuable art (10%) and jewellery (11%), having savings of
more than GBP25,000 (26%) and going on two or more overseas holidays a year
(25%), the Working Wealthy believe that to feel truly rich in 2009, they
would require an average household income of GBP152,865****, as well as:

    - Owning more than one property (35%), or a holiday home (27%)
    - More than GBP20,000 per year disposable income (48%)
    - Being mortgage-free (31%)
    - Driving a luxury car such as a Ferrari (26%)
    - Owning original pieces of art (13%)

Looking after what's important

While they may not consider themselves to be rich, the majority (68%) of
the Working Wealthy believe it is very important to be happy with what they
do have, with many citing family (85%), health and well being (80%) and new
life experiences (22%) as top priorities. For those questioned, 60% class
their home and 11% class their possessions as very important, which comes as
no surprise considering the amount of investment made - according to Hiscox
data, the average Working Wealthy household says they own over GBP88,000
worth of household goods and GBP11,000 worth of valuables such as jewellery
and watches*****.

Steve Langan, managing director, Hiscox UK, says: "The report shows that
whilst the economic downturn may have left the wallets of many of the Working
Wealthy intact, they have suffered a crisis of confidence and have scaled
back their spending and exposure to risk.

"However, it's more important than ever for the Working Wealthy to keep
stock of what they do have and understand their affluence. Because they don't
feel well-off, it is all too easy to underestimate the value of what they do
have. This means there is a real danger of them not making enough provision
to protect themselves and their possessions which they hold dear - an
interesting paradox given that many feel that they are taking less risk
generally."

The Hiscox Wealth Review 2009 also reveals:

- Over half (56%) think they will have to work past retirement age
because of the recession

- More than one in five (22%) say the reduction in interest rates means
their household now has more disposable income

The Working Wealthy Regional 'Rich' List:

    Region                  Average annual household
                            income needed to feel 'rich'
    North East              GBP178,238
    London                  GBP177,704
    Northern Ireland        GBP172,781
    South East              GBP163,296
    East Midlands           GBP155,297
    Wales                   GBP152,677
    West Midlands           GBP151,341
    East of England         GBP146,322
    Scotland                GBP144,873
    North West              GBP136,047
    Yorkshire & Humberside  GBP131,409
    South West              GBP128,912

For more information about Hiscox, visit www.hiscox.co.uk

Notes to Editors:

All figures, unless otherwise stated, are from YouGov Plc. Total sample
size was 1,130 AB professionals. Fieldwork was undertaken between 28
September 2009 - 1 October 2009. The survey was carried out online.

* 2,532,000 households have an average annual gross income of GBP92,936.
Office for National Statistics: The effects of taxes and benefits on
household income, 2007-2008

** The average annual gross household income is GBP35,164. Office for
National Statistics: The effects of taxes and benefits on household income,
2007-2008

*** 95% do not consider themselves to be wealthy according to the Hiscox
Wealth Review 2009, compared to 91% who did not consider themselves to be
wealthy in the Hiscox Wealth Review 2008

**** The 'average annual household income needed to feel rich' is
calculated using an average response from respondents from a selection of
salary banks ranging from GBP28,000 or less to GBP301,000 or more, with the
top factor being GBP350,000

***** According to Hiscox. Analysis based on the average sums insured of
Hiscox 505 Home and Contents Insurance customers as at August 2009

About Hiscox

Hiscox, the international specialist insurer, is headquartered in Bermuda
and listed on the London Stock Exchange (LSE: HSX). There are three main
underwriting parts of the Group - Hiscox London Market, Hiscox UK and Europe
and Hiscox International. Hiscox London Market underwrites internationally
traded business in the London Market - generally large or complex business
which needs to be shared with other insurers or needs the international
licences of Lloyd's. Hiscox UK and Hiscox Europe offer a range of specialist
insurance for professionals and business customers, as well as high net worth
individuals. Hiscox International includes operations in Bermuda, Guernsey
and USA. Hiscox Insurance Company Limited, Hiscox Underwriting Ltd, Hiscox
Europe Underwriting Ltd and Hiscox Syndicates Limited are authorised and
regulated by the Financial Services Authority.

For further information, visit www.hiscox.com.

    Lexis Public Relations:
    Jess Gooch, Press Office, +44(0)20-7908-6447, jgooch@lexispr.com
    Anna Smith, Press Office, +44(0)20-7908-6464, asmith@lexispr.com

For further information please contact: Hiscox Ltd, Abi Clark, Group Communications, +44(0)20-7448-6470, abi.clark at hiscox.com; Lexis Public Relations: Jess Gooch, Press Office, +44(0)20-7908-6447, jgooch at lexispr.com; Anna Smith, Press Office, +44(0)20-7908-6464, asmith at lexispr.com