Asia’s High-Net Worth Market Set for Double-Digit Growth
Insurers and brokers in Singapore and Hong Kong are predicting significant growth in Asia’s high-net worth (HNW) market over the next two to five years. This growth is expected to surpass pre-pandemic levels, with most experts forecasting an expansion of 10% to 20%.
Optimism in Emerging Asia
Experts believe that emerging Asia will outperform other regions, driving the growth of the HNW market. Economic growth in emerging Asia exceeded 6% in 2023 and is projected to remain just under 6% in the coming years. This positive outlook is fueling confidence in the region’s potential.
Asia-Pacific’s Rising Wealth
The Asia-Pacific region currently holds about 30% of global HNW financial wealth, making it the second-largest region after the Americas. Swiss Re expects the wealth gap between the United States and Asia-Pacific to narrow as the region’s emerging economies, particularly China, continue to excel on a global scale.
Defining the HNW Segment
The HNW segment comprises individuals or households with assets ranging from US$1 million to US$50 million. While traditionally dominated by inheritors of family wealth, there is a growing number of first-generation entrepreneurs entering the millionaire bracket. This shift presents new opportunities for the insurance sector, particularly in legacy planning.
Opportunities in Generational Wealth Transfer
As first-generation HNW individuals navigate legacy planning for the first time, the insurance sector sees a surge in demand. Mr. Samuel Berry, head of Swiss Re’s global HNW underwriting team, highlights generational wealth transfer as a key driver of their customer base growth. These new-generation HNW individuals prioritize wealth protection and legacy preservation for their families and future generations.
Chinese Market Potential
Despite recent economic challenges, the Chinese market remains a promising frontier for HNW growth. Low and volatile investment returns in China are prompting wealthy clients to seek asset diversification and higher returns overseas. This trend presents opportunities for insurers to cater to the evolving needs of Chinese HNW individuals.
Tapping into the Super-Rich Market
Swiss Re is among the firms in the insurance sector targeting the super-rich market. With the establishment of a dedicated global HNW team over a year ago, the company is strategically positioned to serve HNW clients in Asia, with operations split between Singapore and Hong Kong.