Introduction of new reporting standards has led to capital market evolution. Some countries had tax amnesties that allowed taxpayers to bring in their assets from the cold. The new standards will have a major impact on work of the international capital management industry.
The property tax has already been reduced to 6% in the Philippines leading to an increase in the number of customers seeking to use insurance solutions when buying homes. Voluntary real estate insurance grew after the tax amnesty in Indonesia. Property legalization is also underway in Malaysia. The analysts believe that after its completion, the insurance sector will grow.
The trade conflict between the US and China increases the need not only for tax, but insurance planning as well. The Yuan has suffered from the trade war, inflation has increased in China, but insurance clients with indexed investment products have only benefitted.
While Chinese insurance clients are trying to beat inflation with earnings, insurers in Thailand use the national currency strengthening and buy up securities denominated in US dollars. These investments are very attractive for long money of life insurance companies.
In terms of a holistic approach, in Southeast Asia, more and more attention is being paid to the use of life insurance as a fiscal planning tool, whether it is a reduction in property taxes or tax amnesties.
10 years ago, 95% of the insurance business was concentrated on the Universal Life sector. This product is currently undergoing adaptation. The transition from UL to Whole of Life has been made due to a number of factors, for example, interest rates.
In addition to these changes, an adjustment is observed both in the universal life variable (VUL) and in the indexed universal life (IUL). In case with VUL, customers see the benefits of combining their assets with retirement annuities. It is also worth noting, that more and more people are refusing a lump sum in favor of monthly benefits.
Source: https://hubbis.com/article/the-adapting-hnw-life-insurance-business-in-asia
Photos are from open sources.
