Transamerica Life Bermuda rides the rising wave of Asian wealth

Transamerica’s CEO explains how the rise of young High Net Worth individuals (HNWIs) in Asia is changing the region’s life insurance landscape.

From its offices in Hong Kong and Singapore, Transamerica Life Bermuda offers life protection to HNWIs, families and businesses throughout Asia. “Asia is expected to surpass North America as the world’s wealthiest this year, with rapid, concentrated growth of wealth especially across emerging markets,” says Damiaan Jacobovits de Szeged, CEO of Transamerica Life Bermuda and member of the Aegon Asia Executive Committee.

A surge in Asian wealth
According to the 2015 World Wealth Report, wealth across Asia’s emerging markets is expected to total USD8,404 billion by 2017.

“Notably, Asia’s HNWIs have focused primarily on the accumulation of wealth and ‘getting rich’,” Mr de Szeged says. “In contrast to the US and Europe - where much of the wealth has been passed down through multiple generations - 80% of wealth in Asia resides with the first generation.”

Mr. de Szeged is confident that this presents a significant market opportunity for life insurance providers. This is especially due to the fact that only low single digits* of the region’s HNWIs have life insurance to help secure their wealth legacies.

Mr. de Szeged also notes the emergence of a new generation of young entrepreneurs with an international outlook on business and diverse wealth protection needs.

Shifting needs of younger HNWIs
“We have reached a point where much of the wealth that has been created in Asia’s growing markets is expected to be transitioned to a new generation of wealthy individuals who will be taking over the reins of family businesses.

“As such, the priorities and needs of Asia’s HNWIs are shifting from wealth creation to asset protection and legacy preservation. Concurrently, we are seeing increasing demand for legacy planning among younger HNWIs.”

He adds that the demand for life insurance in Asia differs from counterparts in the US and Europe.

“As wealth in emerging Asia has been accumulated relatively recently, assets are typically tied up in a single business or location, with limited portfolio diversification. Life insurance can be an effective and flexible tool within the broader wealth management toolbox to diversify that risk, and ultimately to provide peace of mind. With this increase in HNWIs and the rising demand for legacy planning across emerging Asia, we expect the region to see robust annual growth in life insurance in the coming years,” he says.

Transforming underwriting standards
Indeed, Transamerica Life Bermuda -one of Asia’s leading High Net Worth insurance providers - is committed to providing life protection to its clients across Asia and beyond. As Mr. de Szeged puts it: “We work with selected partners to design products and services that address the discerning needs of Asia’s HNWIs.”

Transamerica Life Bermuda has also implemented revolutionary changes in the underwriting landscape. For instance, since January 2015, the company has improved its underwriting categorisation to offer HNWIs an enhanced regional classification.

This has since been widely adopted across the industry where HNWIs in emerging markets are provided more favourable policy options.

With escalating global economic volatility, Mr. de Szeged stresses that this is a good time for clients to consider their wealth protection needs: “Whereas assets and investments can be volatile, a life insurance policy is a stable product that covers different needs, like providing wealth protection, flexibility for legacy planning, and peace of mind.”

“Ultimately, life insurance is not about the highest returns, but the safeguarding of families and loved ones during unforeseen circumstances,” he notes