Insuring a legacy
The rapid rise in Asian private wealth has hit a storm of pandemic uncertainty, making insurance solutions a sound strategy for achieving goals of legacy and estate planning optimisation.
More than two millennia ago, Chinese philosopher Lao Tzu said: “Those who have knowledge, don't predict. Those who predict, don't have knowledge.”
Such ancient wisdom could not be more relevant today, as Covid-19 plunges the world into unprecedented uncertainty, churning up market volatility and a murky economic outlook for the global economy.
For individuals who have ridden Asia’s historic wave of wealth generation, and hope to pass on the fruits of their success to loved ones, these can indeed be stressful times. Predicting the future is more hazardous than ever, but preparing for the future is a necessity.
What is the way out of this conundrum? Global insurance groups such as Sun Life Financial Inc. are providing an answer. Through judicious assessment of risk and reward, combined with a raft of instruments that provide returns, insurance is increasingly seen as key to growing and protecting the wealth of a family or an entrepreneur.
Insurance can help ensure that wealth is not swept away by the winds of change (economic headwinds, market volatility, disruptions bought by digitalisation) and can be handed down intact to the next generation. Sun Life’s teams in Hong Kong, Singapore and Bermuda have collectively named themselves ‘Sun Life International HuBS’, seeking synergies by tapping on one another’s strengths, expertise and experience. Sun Life International HuBS aims to leverage the high net worth (HNW) opportunities in Asia, and offer clients and distribution partners best-in-class HNW offerings.
“At Sun Life we are supporting high net worth clients across over 70 markets, helping them grow, protect and transfer their wealth to the next generation,” said Fabien Jeudy, president of Sun Life International HuBS. “With the establishment of International HuBS bringing our talented people across markets together, we aspire to bring ‘OneSunLife’ experience to our high net worth clients.”
The demand for wealth preservation and succession planning in Asia is massive and continues to grow. A recent report shows that onshore personal wealth in Asia expanded at a compound annual growth rate (CAGR) of 10 per cent between 2014 and 2019 to reach $34tn. That compares to 5 to 6 per cent growth in Europe and North America over the same period.
The convergence of wealth generation and economic turbulence means insurance multinationals are poised to play a central role in bringing peace of mind to individuals planning long-term succession.
Eye on history for a bright future
Effective succession planning means being ready for any unpredictable event. It calls for factoring in a world-changing upheaval at least once within the course of a lifetime. That’s why tried-and-tested insurance solutions are essential components of any long-term wealth management strategy.
Sun Life believes it can offer value to Asia’s high net worth individuals (HNWIs) through a legacy of its own: a 155-year history of providing rock-solid protection against the preeminent crises of each era – and managing to thrive itself beyond turmoil. Sun Life also has deep understanding of Asia, with its first presence established in the region in the 1890s. Today it has a foothold in eight Asian markets: Hong Kong, mainland China, the Philippines, Singapore, Malaysia, Indonesia, India and Vietnam.
“Sun Life is 155 years old,” said Mr Jeudy. “If you put that in perspective, we’ve protected families over world war one, the Spanish Flu, the Great Depression, world war two, the 2008 global financial meltdown and now Covid-19. It’s in our DNA to manage risk with these kinds of transcendent events in mind.”
For any family, the primary requirement in choosing an insurer is knowing it will honour its commitments — whatever the circumstances. History has shown Sun Life’s dedication to the delivery of its commitments. Its financial strength ratings with Sun Life Hong Kong Ltd being rated AA- by S&P Global Ratings, and Sun Life Assurance Company of Canada being rated Aa3 by Moody’s as of Sept 30, 2020, speak for themselves.
“We're very proud of our track record dealing with this crisis and earlier ones,” said Mr Jeudy, “doing the right thing for clients through good times and bad.”
A bespoke touch for Asia’s succession needs
For the HNWI with an eye on legacy, it’s important to find a partner who understands personal needs and the nuanced dynamics of family and culture.
Sun Life has accumulated a wealth of expertise giving HNW families individualised attention through its HNW team in Bermuda, which was established in 1996. As HNW needs soared across Asia, however, Sun Life found it needed to be closer to its clients in the world’s fastest-growing region.
Three years ago, Sun Life launched a HNW team in Hong Kong to provide the personalised attention HNW families increasingly require. In the first half of this year, Sun Life’s HNW business out of Hong Kong recorded encouraging growth.
Furthering to its intention to provide tailor-made wealth management services to HNW families in the region, Sun Life recently established a team in Singapore, to cater to the increased demand for wealth management in the affluent city-state. Sun Life obtained its direct insurer licence in Singapore in May 2020.
“If you're in Singapore or Hong Kong, you can offer this personal touch within five minutes, providing the deep care people expect for resolving issues when they happen,” said Mr Jeudy, who is also chief executive officer of Sun Life Hong Kong Ltd. “This is priceless from a servicing perspective.”
It’s the type of strategy experts say is increasingly vital to succeed in the competitive Asian insurance market.
Matching the right product to each family’s needs
In order to provide personalised service, of course, an insurer needs a robust product range to meet the divergent needs of the HNW population. Sun Life provides an array of solutions specifically tailored to different risk appetite profiles. For example, a retiree in her late 60s needing to assure the future of children and grandchildren will have different requirements from a 40-something entrepreneur with a greater tolerance for potential market downturns.
“Because we have this good mix of solutions,” said Mr Jeudy, “when a broker works with a high net worth client, the broker isn’t stuck with one product, but offers exactly the right solution based on risk appetite and needs.
“We believe our product portfolio is quite comprehensive. And that makes a world of difference when you need the optimum solution for the future of your loved ones.”
