A study by showing that the Asia-Pacific life insurance for high net worth individuals is set to be worth $1.6 trillion in 2029, rising from $1.09 trillion in 2020. But while growth is taking place, almost six in 10 of HNW people HSBC has surveyed have no legacy plans in place.
Life insurance has emerged as a preferred legacy planning tool for HNW individuals, surpassing wills and trusts, HSBC said in its inaugural annual survey examining the legacy planning and wealth transfer landscape across Asia and the Middle East.
On the flipside, the number of persons who haven’t got legacy plans in place is particularly large in the Greater China markets of mainland China, Hong Kong and Taiwan, plus the United Arab Emirates. HSBC took views of more than 900 respondents in nine markets in Asia and the Middle East. (The 21-page report did not specify exactly when the fieldwork was conducted.)
“Of their $9.9 billion in combined net wealth, $5.8 billion is currently without a legacy plan. It is, in effect, unsecured,” Edward Moncreiffe, CEO, insurance, HSBC, said in the report. “Our surveyed HNW individuals are not just inadequately futureproofing their wealth but also missing out on potential wealth diversification and upside.”
Among the report’s findings, HSBC said concern about macroeconomic and financial volatility is the leading factor driving legacy planning. It is four times more influential than marriage and three times more powerful than the birth of children or grandchildren.
The report said more than nine out of 10 respondents use or are strongly considering at least one international financial hub for wealth or legacy needs, with Hong Kong, Singapore and the UAE at the forefront.
Legacy planning in Asia demonstrates clear regional differences. At the high end of the legacy planning spectrum are the Southeast Asian markets of Indonesia, Malaysia and Thailand. At the other end are the Greater China markets of Hong Kong, mainland China and Taiwan.
Source: HSBC
"There are many reasons why legacy planning often remains on the back burner, even for the most informed individuals,” Daisy Tsang, CEO, HSBC Life Hong Kong and Macau, said in the report. “HNWIs have demanding schedules and there are many intricacies in the co-ordination of multifaceted estates. This may leave them lacking in confidence or feeling a loss of control over their future.”