Insights into latest insurance trends 

Issue 9, November 2021 | PCS Vision

Davin Wong joined PCS by Mercer Singapore as CEO, in September 2021. * Here, Davin shares some insights into recent changes in the life insurance space as well as how PCS is delivering market-leading services and products to our clients.

The pandemic has palpably changed the mindsets of our clients and their families. Many who never believed in the necessity of getting themselves covered, or deprioritized estate planning, have now realized it is essential to plan ahead – to cover their areas of risk. 

Coverage amounts are always determined by individual circumstances, but we have seen a common need to increase coverage to negate inflationary erosion. 

From the beginning of the pandemic, PCS by Mercer processes have rapidly evolved to service our high-net-worth (HNW) clients irrespective of border restrictions. We continue to lead the HNW insurance brokerage industry in introducing digitalized and remote processes that also protected our clients’ confidentiality and our stakeholders’ interests. And we are still innovating and staying ahead of the competition.

In these volatile times, it’s important to choose insurance tools that allow you to sleep well at night. Trending up are products that encompass guarantees – providing much-needed stability and peace of mind for our clients. Our clients no longer need to worry about policy lapses and decreasing values.

While remote processes are naturally more challenging for everyone, our consultants are exceptional in both their service orientation and product knowledge. Backed by our substantial investment in virtual platforms, we have been able to build relationships and offer the right solutions, even when we are not face-to-face.

We can see three key trends:

PCS share a common goal with the banks and private banks we partner with – to always provide the best wealth protection solutions and service. The pandemic has only deepened our commitment. So, not only have the banks been exceptionally adaptable as we created the non-face-to-face processes, but they have also been flexible with product funding solutions when appropriate. Being agile together has strengthened our partnership with the banks during this time.

To receive favorable tax treatment in the US, Offshore life insurance contracts must meet the requirements of Section 7702 of the US Tax Code (7702 differentiates between income from a genuine insurance product and income from an investment vehicle).

Prospective clients also the need to factor in the one percent excise duty if premiums are paid to offshore insurance companies.**

The cornerstone of every wealth planning discussion is understanding our clients’ unique needs. No two clients are the same, so we go deep into every client’s context, key risks and position. Before tailoring solutions, we thoroughly understand their motivation for protection, how they want to plan for distribution, and their desired outcomes. 

**This article is general in nature and not intended as specific advice. For advice, clients should consult their own tax experts before making decisions.