In the modern day, most, if not all are familiar with the concept of insurance. In short, in exchange for a premium paid, a company or the state undertakes to provide a guarantee of compensation for specified loss, damage, illness, or death.

Most of us are familiar with the usual policies one takes up, such as life insurance, critical illness, and hospital insurance. These policies protect a person from being saddled with huge bills should they fall ill, or when they pass on, that their dependents' needs are taken care of with the insurance payout.

However, for the more well-to-do among the population, they also seek to protect another aspect, namely, the wealth they have accumulated in their lifetimes.

Such is the value proposition identified by Sun Life Singapore. These products are primarily aimed at high net worth (HNW) and ultra high net worth (UHNW) clients, which, with the region’s growing affluence, is increasing as well.

Sun Life Singapore is a branch of Canadian insurance firm Sun Life Assurance, and Singapore is Sun Life’s eighth market in Asia, where the company has over 21,000 employees and C$52 billion ($54.7 billion) in assets under management throughout the region.

Unlike the insurance firms that most people are familiar with, selling their products through agents that cold call prospective clients, Sun Life primarily markets its products via private banks and brokers who presumably have built relationships with high net worth individuals.

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This is so that the company can avoid so-called “channel conflicts”, where various distribution channels such as agents, brokers and banks representing the company compete for the same clients.

In an interview with The Edge Singapore, Belinda Au, CEO of Sun Life Singapore, says “We focus on the high net worth space only… and I want to make sure that we actually build the best service and the best value proposition in the high net worth space.”

But what are these clients asking for? Are their insurance needs any different from the rest of the mass market clients that are served by the many insurance companies around?

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Apparently so. Au observes high net worth clients are also concerned about the usual contingencies of life like health, hospitalisation and accidents. However, for them, they also place priority on how they can protect their wealth.

“I will say if [the objective of] mass-market client is the accumulation of wealth, then the objective for high net worth clients may be the protection of wealth and also passing their wealth to the next generation,” she adds.

In an earlier interview with The Edge Singapore, Au says that the company here in Singapore aims to “provide HNW and UHNW clients with comprehensive and dynamic product solutions that meet their needs to preserve, grow and transfer wealth for generations and beyond.”

She points at the firm’s track record globally and the region, where Sun Life has more than a century of experience in Asia and has over 25 years of experience in the international life insurance business. “I am confident that Singaporeans can rest assured that their wealth is in safe hands.”

As a sign of the company’s creditworthiness, Sun Life is rated as AA by Standard & Poor, and received an Aa3 rating from Moody’s. “That rating not only gives confidence and trust to the clients, but when they do premium financing with the banks, that allows them to have that confidence that they're actually putting their money in a very reputable financial institution,” says Au.

Ever since Sun Life received its license to sell its products last April, it has offered its so-called Future-S policy that helps in wealth preservation, while also protecting the client. Policyholders get a guaranteed death benefit equal to the sum assured upon his or her passing, along with growing their wealth to pass on to the next generation.

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Such an insurance policy works by having so-called annual additions. Basically, the company will declare annual additions beginning from the third anniversary of the policy onwards, although this is not guaranteed.

Furthermore, on the tenth policy anniversary, a “final addition” will be added to the policy and will come into effect upon a death claim or surrender of the policy. “It has the benefit of both the life protection, plus also a cash value accumulation as well,” says Au.

Should the policyholder need to cash out the policy due to an immediate need for cash, Future-S also provides a high guaranteed cash value, where a policyholder can surrender a policy for 85% of the premiums paid.

Au says this is the highest so-called day one guaranteed cash value in the market, and as the majority of clients fund their policies through financing facilities, they are able to take advantage of higher lending and pay a lower cash amount upfront.

New products for Singapore

The Future-S policy is just a start. Sun Life plans to introduce a range of other new products for the HNW and UHNW market.

While she did not disclose details of the product, citing regulatory restrictions, Au says the company is currently doing feasibility studies on the new product, and will start development once approval is given by the Monetary Authority of Singapore (MAS).

But before the product starts rolling out, Au says that the goal for Sun Life in 2022 is to strengthen relationships with its existing brokers.

She acknowledges that the distributor arrangement is there, but “we need to make sure that the working relationship is stronger, so that we can better serve them to understand what their needs are and how we can improve.”

Au adds that Sun Life is working on what she calls “a buying experience journey” with their brokers to understand their client onboarding process, so as to design their processes and support to satisfy the needs of Sun Life’s distributors and by extension, its clients.

“Anytime when we see something that is not working well. I want to make a change. So one of the things that I want to do is really to have an agile process so that we can constantly improve our services, our products.”

After all, she says, Sun Life’s purpose is helping clients to achieve lifetime financial security and live healthier lives. “Everything we do centers around that. Everything we do is how we are able to serve the clients and once you have that in mind, everything actually just follows,” says Au.

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