SINGAPORE (June 24): AIA Singapore and EY have launched a report that provides insight into how high net worth individuals (HWNIs) view and adopt insurance policies, as well as how insurance policies can help them with their overall wealth management on Wednesday.

The report conducted customer research across four regions: Mainland China, Hong Kong, Taiwan, and Singapore. Some 39% of the respondents surveyed were professionals, and 61% were entrepreneurs and family-inherited HNWIs.

The Asia Pacific region, which has shown the fastest growth in total wealth, is home to the largest number of HWNIs in the world.

According to the report, some 90% of HWNIs in Singapore rely on insurance policies to protect and build their wealth compared to the regional average of 87%.

Around 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.

70% of respondents in Singapore said that insurance comprises more than 10% of their wealth and legacy planning, compared with some 52% of their peers across the region.

86% of Singapore-based HWNIs 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.

In contrast, only 48% of HNW entrepreneurs in Singapore have applied for business protection through insurance, compared to the regional average of 54%.

The report concludes that insurance can play an important role in protecting the families of HNWIs from issues such as illiquid estates or outstanding debt, or enable them to plan ahead to allow their beneficiaries to maintain their lifestyles.

According to the report, life and health insurance can solve immediate liquidity needs through cash value withdrawal or policy loans. HWNIs are also able to save taxes in estate and legacy planning through the appropriate life insurance policies.

“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,” says Ho Lee Yen, chief customer and marketing officer at AIA Singapore.

“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 adds.

“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,” says Dustin Ball, partner and APAC insurance strategy leader at EY.