Manulife recently set a new market record by issuing a 300 million USD life insurance policy in Singapore. This transaction surpassed the 250 million USD record established by HSBC Life in Hong Kong, China, in 2024.

Beyond its notable size, the transaction also reflects new demand from wealthy Asian families. Manulife stated that this policy demonstrates the increasing need among the ultra-wealthy for wealth preservation and structuring solutions. Over the past 12 months, the company issued 25 contracts in Singapore, each valued at over 50 million USD. This indicates it is not an isolated incident but a trend of large-scale, sustainable transactions.

The context of increasing wealth also contributes to this trend. According to UBS's Billionaire Ambitions 2025 report, Singapore currently has 55 billionaires with total assets of approximately 259 billion USD, a 66% increase from a year prior. Approximately 69% of these billionaires are self-made. As this wealth continues to expand, demand for wealth preservation tools, such as high-value life insurance, is likely to remain strong.

The transaction also reflects the increasing use of insurance by high net worth (HNW) families for inheritance and wealth transfer purposes. This development is particularly notable as the insurance industry intensely competes for market share within the ultra-wealthy client segment. This trend aligns with the wave of intergenerational wealth transfer in Asia-Pacific, estimated at 5.8 trillion USD, creating opportunities for financial services such as banking, asset management, tax advisory, legal services, and trusts.

Illustrative cash flow tables of a life insurance policy. *Photo: Mint*

Large insurance policies, including the 300 million USD package mentioned, are primarily index universal life (IUL) policies. This product line is popular within the HNW segment. Premiums are allocated to a fixed interest account and a market-indexed account. The indexed account typically includes a 0% floor to protect against losses, but gains may also be capped.

Insurance is especially suitable for inheritance planning because buyers can create a "legacy" due to a high proportion of premiums allocated to investment. Payouts are not subject to probate procedures, ensuring families receive liquidity immediately upon the insured's passing. Furthermore, insurance helps balance assets among heirs, compensating for illiquid assets such as businesses or real estate.

For large contracts, the process from application submission to issuance typically takes about two months. This is because clients require comprehensive advice on tax, asset structuring, and payout methods. Many providers are shortening this timeframe by applying artificial intelligence (AI) to the process.

Data on the insurance market size for the wealthy remains limited. A 2024 study by NMG, commissioned by Utmost Group, revealed that insurance solutions currently account for only 2%, equivalent to 543 billion GBP (approximately 744 billion USD), of the total investable assets of HNW individuals, valued at 28 trillion GBP (approximately 37.8 trillion USD).

This low percentage is primarily due to limited awareness and reliance on specialized advice. If this proportion were to increase to 3%, the international insurance market for the wealthy could expand by an additional 50%, surpassing 800 billion GBP (approximately 1.08 trillion USD).

Tieu Gu (according to The Business Times)