Insurers Look Beyond Insurance for Wealthy Clients... Expanding WM Scope

Life Insurers Target High-Net-Worth Clients
Designing Beyond Insurance Payouts to Asset Succession
Expanding Scope with Culture, Trusts, and Tax Advisory

Insurance companies are expanding the scope of their wealth management (WM) services for high-net-worth individuals beyond insurance product sales to include inheritance, tax, and health management. As asset sizes increase, client needs are becoming more complex, encompassing not only investment but also asset transfer and liquidity management. As a result, a growing trend is emerging to combine insurance and trust services to provide comprehensive lifecycle management for clients.

According to the financial industry on September 29, insurance companies are steadily expanding dedicated organizations and services targeting high-net-worth individuals. In addition to simply selling insurance products and providing financial consulting, they are broadening client engagement by integrating asset succession through trusts, tax and legal advisory, health management, and cultural and artistic programs.

Some companies are even leveraging culture and the arts as points of contact for client management. Earlier this year, AIA Life Insurance launched a wealth management brand, "AIA Global Wealth," specifically for high-net-worth individuals, and opened a dedicated center in Gangnam, Seoul. The company offers not only consulting with tax and legal experts but also provides cultural and art programs such as gallery tours. An insurance industry official said, "It is not that cultural and art programs themselves are becoming a new source of revenue for insurers; rather, as it becomes difficult to differentiate solely with existing financial products, these programs are designed to build relationships with high-net-worth clients."

In addition, KB Life is providing comprehensive wealth management services, including real estate and corporate management, for high-net-worth clients. Hanwha Life is also operating WM services that combine insurance and trust solutions, while Samsung Life Insurance offers asset management consulting that covers inheritance, donation, investment, real estate, and legal matters through its family office.

The reason insurance companies are focusing on the high-net-worth market is that asset management becomes more complicated as wealth accumulates and the demand for intergenerational asset transfers increases. In particular, insurance is well-suited to combine with trust or inheritance services, as it not only provides protection against death and illness but also allows the timing and beneficiary of insurance payouts to be structured according to clients’ needs.

McKinsey, in a report published last month, projected that personal financial assets in the Asia-Pacific region would reach around 120 trillion dollars by 2030. It also estimated that assets worth 5.8 trillion dollars will be transferred between generations by 2030. However, the proportion of high-net-worth individuals in Asia who currently include life insurance in their wealth management plans is estimated to be only about 15% to 20%.

McKinsey identified the ability to underwrite complex large-scale contracts, collaborate with reinsurers, and build distribution and operational networks such as brokers and family offices as core competencies for insurance businesses targeting Asian high-net-worth clients. The analysis suggested that the more complex the size and structure of assets, the more vital it becomes to possess specialized management abilities rather than relying on simple additional services.

An industry official commented, "From the perspective of banks and securities companies, high-net-worth individuals are also important clients. What sets insurance apart is its ability to connect the structures for risk coverage and insurance payouts with trust and inheritance planning. In the competition for wealth management, the key is to have the capability to organically integrate insurance, trusts, inheritance, and health management services."

This content was produced with the assistance of AI translation services.