What opportunities does APAC's millionaires offer insurers?

China is home to 6 million millionaires, second only to the US.

Asia Pacific’s (APAC) high-net-worth (HNW) market represents a substantial growth opportunity for the insurance industry, driven by the region's expanding wealth and entrepreneurial energy, according to Swiss Re. 

APAC is home to approximately 30% of the world’s HNW financial wealth, second only to the Americas. 

This growth has been fueled by decades of strong economic performance, with APAC now housing 28% of the global HNW population. 

Individuals in this segment possess assets ranging from $1m to $50m, with those above $50m considered ultra-high-net-worth (UHNW), Swiss Re’s “The high net worth insurance market in APAC Wealth growth, preservation and succession planning” report revealed. 

A rebound in global financial wealth in 2023, supported by a recovery in equity markets and economic resilience, contributed to an increase in USD millionaires, particularly across key APAC cities like Tokyo, Singapore, Sydney, Hong Kong, and Beijing, which rank amongst the top global hubs for millionaires. 

China is home to 6 million millionaires, second only to the US, though experts predict the gap between APAC and the US will narrow as APAC continues to outperform in wealth growth, especially in emerging economies.

This expanding wealth offers significant opportunities for insurers. Property insurers are likely to see immediate demand as affluent households acquire more high-value assets, including homes and cars. 

The HNW market is also a critical source of new business for life insurers, particularly in emerging Asian countries where the millionaire population is still developing. 

A growing number of first-generation entrepreneurs are joining the HNW segment, many facing legacy planning for the first time—a need that insurance products can help address.

Additionally, post-pandemic trends show that HNW individuals are rebalancing between wealth preservation and growth, with a stronger focus on cross-border diversification due to heightened geopolitical tensions. 

Life insurance products are well-positioned to support these clients in safeguarding and growing their wealth across borders. 

Another industry trend has been the significant investment in remote processing and distribution, enabling more flexible operations. This shift has opened opportunities for insurers to serve clients across a broader range of locations.

Mainland China is seen as the region with the most potential for growth, despite its recent economic slowdown. 

As domestic investment returns remain volatile, wealthy Chinese clients are seeking overseas diversification, fueling demand for insurance solutions tailored to global asset management.

However, insurers in APAC face challenges. Rising interest rates have increased the cost of premium financing, a traditional driver of HNW insurance sales. 

Higher interest rates have also led to increased policy lapses and surrenders as clients face liquidity constraints and shift product preferences. Other challenges include evolving regulations and a shortage of skilled industry talent.

To capitalise on growth opportunities whilst managing these challenges, insurers and brokers are expanding into new markets, developing innovative products, and exploring alternative distribution channels like bancassurance. 

The future success of the HNW insurance market in APAC will require continuous innovation, adaptability, and collaboration across the industry.