AIA and EY Release New Report on Insurance for High Net Worth Individuals; 90% of Singapore Respondents Leverage Insurance Solutions as Part of Wealth and Legacy Planning
78% of respondents in Singapore believe that insurance plays a significant role in creating and preserving wealth
– Media OutReach – 24
June 2020 – AIA together with EY today launched a new report providing new
insights into High-Net-Worth Individuals (HNWIs), in the context of their views
and adoption of insurance solutions. The report identifies specific challenges
faced by HNWI’s and explores how insurance solutions can help this segment with
their overall wealth management.
Ms. Ho Lee Yen, Chief
Customer and Marketing Officer of AIA Singapore said, “High-Net-Worth
Individuals in Singapore are starting to look far beyond basic life insurance coverage
towards more holistic protection offerings including healthcare support, estate
planning, tax optimisation, business succession, and debt risk mitigation. Early
planning and holistic wealth management are critical in helping safeguard
legacies, especially during times of economic uncertainty, and smart insurance
solutions can provide a source of passive income streams as well as the asset
diversification required to buffer against market volatility.”
critically, for many entrepreneurs struggling to maintain business continuity
during this trying period, insurance solutions such as keyman insurance are now
being considered as a form of long-term wealth protection for their business regardless
of size and scale,” she said.
Mr. Dustin Ball, Partner and APAC Insurance Strategy Leader at EY, said, “The findings show that HNW individuals are a diverse segment
and face specific challenges based on the source of their wealth. These
challenges are well-suited to insurance solutions and there is an opportunity
to increase the understanding and awareness of how insurance products can
augment wealth planning.”
findings from the report include:
of HNW respondents in Singapore said that insurance comprises more than 10% of
their wealth and legacy planning, compared with the 52% indicated by their
peers across Asia. This reflects the understanding that HNWI’s in Singapore
have on how insurance solutions play an important role in wealth management.
of HNWIs across the region use insurance for succession and legacy planning,
reflecting the relatively high financial security of insurance companies.
of Singapore-based HNWIs own medical or critical illness insurance policies,
driven by a demand for coverage of medical costs as well as access to
first-class healthcare support.
of HNW entrepreneurs in Singapore have business protection through insurance
solutions, encompassing a range of areas including business loan protection,
health and illness income protection, business transfer and legacy planning and
inheritance equalization, falling short of the regional average of 54%.
of HNW entrepreneurs in Singapore have previously heard about business wealth
protection, but 52% of them do not have any kind of such protection in place.
of HNW professionals in Singapore consider retirement planning as an important
part of overall wealth management and essential to ensure a successful
transition from working to retirement, compared to 92% in Asia.
report produces a number of key conclusions in relation to the role of life and
health solutions in protection and legacy planning for HNWIs, including:
of family wealth and legacy planning: insurance can play an important role in
protecting HNWIs’ families from issues arising from illiquid estates or
outstanding debt. It can also enable HNWIs to plan ahead to allow beneficiaries
to maintain their lifestyles.
diversification, leverage and growth: insurance solutions can help to diversify
investment portfolio risk through tax deferred growth, stable returns and
planning: life and health insurance can solve immediate liquidity needs through
cash value withdrawal or policy loans.
benefits: Savings in tax for estate and legacy planning can be achieved through
employing the appropriate life insurance propositions.
report was developed based on proprietary research, interviews with relevant
stakeholders including HNWIs and an analysis of qualitative and quantitative
data. Customer research was conducted in Mainland China, Hong Kong SAR, Taiwan
(China) and Singapore.
News Source: MediaOutreach