78% of respondents in Singapore believe that insurance plays a significant role in creating and preserving wealth
SINGAPORE
– 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.”
“More
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.”
Notable
findings from the report include:
- 70%
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. - 75%
of HNWIs across the region use insurance for succession and legacy planning,
reflecting the relatively high financial security of insurance companies. - 86%
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. - 48%
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%. - 84%
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. - 96%
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.
The
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:
- Protection
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. - Portfolio
diversification, leverage and growth: insurance solutions can help to diversify
investment portfolio risk through tax deferred growth, stable returns and
leveraging. - Liquidity
planning: life and health insurance can solve immediate liquidity needs through
cash value withdrawal or policy loans. - Tax
benefits: Savings in tax for estate and legacy planning can be achieved through
employing the appropriate life insurance propositions.
The
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.
About AIA
AIA Group Limited and its
subsidiaries (collectively “AIA” or the “Group”) comprise the largest
independent publicly listed pan-Asian life insurance group. It has a presence
in 18 markets in Asia-Pacific — wholly-owned branches and subsidiaries in Hong
Kong SAR, Thailand, Singapore, Malaysia, Mainland China, South Korea, the
Philippines, Australia, Indonesia, Taiwan (China), Vietnam, New Zealand, Macau
SAR, Brunei, Cambodia, Myanmar, a 99 per cent subsidiary in Sri Lanka, and a 49
per cent joint venture in India.
The business that is now AIA
was first established in Shanghai a century ago in 1919. It is a market leader
in the Asia-Pacific region (ex-Japan) based on life insurance premiums and
holds leading positions across the majority of its markets. It had total assets
of US$284 billion as of 31 December 2019.
AIA meets the long-term
savings and protection needs of individuals by offering a range of products and
services including life insurance, accident and health insurance and savings
plans. The Group also provides employee benefits, credit life and pension
services to corporate clients. Through an extensive network of agents, partners
and employees across Asia-Pacific, AIA serves the holders of more than 36
million individual policies and over 16 million participating members of group
insurance schemes.
AIA Group Limited is listed on
the Main Board of The Stock Exchange of Hong Kong Limited under the stock code
“1299” with American Depositary Receipts (Level 1) traded on the
over-the-counter market (ticker symbol: “AAGIY”).
