Perpetual Insurance could ‘save $1trln family wealth’

Perpetual Insurance could ‘save $1trln family wealth’

Perpetual Insurance that insures the head of the family businesses for a longer term covering certain risks, could save a potential $1 trillion worth of wealth in the Middle East in the next ten years. This happens as family business ownership changes hands from the first and second generation to the third that might suffer from the 3rd Generation Syndrome.

According to Capgemini Research Institute’s World Wealth Report 2021, the population of high-net-worth individuals (HNWIs) in the Middle East region grew by 6.8% to 800,000, while their wealth soared by 10.7% to $3.2 trillion in 2020.

The UAE is home to 92,600 US-dollar millionaires; 4,000 multi-millionaires worth more than $10 million; 251 centi-millionaires (over $100 million), and 14 US-dollar billionaires, according to the latest Henley Global Citizens Report.

Full estate plan

The majority of HNWIs don’t have a proper corporate governance structure or a wealth succession plan in place for their family businesses, according to a Lombard Odier exclusive survey issued recently. The Swiss private bank found that 90% think that their family business is set up for an efficient wealth transfer to the next generation. However, only 24% have a full estate plan in place.

Leadership of a large number of family businesses in