International Adviser’s Bancassurance Selector Forum organised yesterday in Singapore saw leading insurance companies advocating their banking partners to tap this under-penetrated segment of the market with products ranging from life wrapping solutions to retirement planning.
David Varley, head of high net worth – Asia, Axa Hong Kong and Singapore said he sees a “massively” untapped opportunity in Asia in restructuring and wrapping of assets in life insurance.
Life wrapping or product private placement in life insurance (PPLI) is an investment-linked life insurance solution for HNW clients, combining wealth management and investment flexibility within a life insurance wrapper.
“Life wrapping or PPLI is a niche segment business. Life wrapping is unsold in Asia as private banks are focussing more on universal life (policies). Many of your clients have not heard of it,” Varley addressed a forum of bancassurance and wealth management professionals.
The rising wealth in Asia along with the rapidly ageing population offers scope for retirement planning solutions, said Chris Gill, general manager, Southeast Asia, Friends Provident International (Singapore).
Sharing the outcome of Friends Provident’s recent April Survey comprising of 501 respondents from Singapore, Gill said retirement planning emerged as the top priority for Singaporean affluent customers with 76% response. Emergency needs (58%) and medical expenses (41%) featured among the other key priorities.
Gill also cited interesting outcome of the survey that saw that only 7% of the customers trust banks for advise while buying life insurance while insurance agents received a maximum response of 35% followed by financial advisers (24%).
The low trust on banking relationship managers is despite some 40% of the sales coming from the banking channel in the Singapore insurance industry.
Meanwhile, most of the insurance companies did not appear too keen on product innovations in the fast growing Asian wealthy segement due to low penetration.
According to a survey carried out by Capgemini and RBC Wealth Management last year, the Asia-Pacific region is poised to become the largest wealth market as early as 2014, far outpacing other geographies.
“If you look at how little we have actually penetrated this big market opportunity, I am still surprised (and think) and how much room there is from the existing solutions we have. (That) doesn’t mean we should not innovate,” said Damiaan Jacobovits De Szeged, chief executive, Transamercia Life Berumuda
Gerald Pasquier, business legal manager, Swiss Life Singapore was in the favour of finding new ways of using a product rather than designing a new product.
“Generally speaking, I think product placement in life insurance is very flexible. I think, there is not really a reason to innovate,” he said.
