Going the extra mile for clients

INSURANCE entrepreneur Calvin Lo ranks among the wealthiest individuals in Asia, and can well indulge in a so-called ''crazy rich Asian'' lifestyle.

By Forbes' tally in 2019, his net worth was US$1.7 billion. His investments are eclectic: He acquired the Williams F1 team for over US$100 million last year. He is said to be Asia's largest investor and collector of French champagne, and is also one of the first owners of the Gulfstream G650 private jet in Asia.

Instead of kicking back on his heels, the urbane Hong Kong-based group chief executive of insurance brokerage group R.E. Lee International gets a kick out of conversations with clients - who are buyers of multi-million dollar life insurance policies. Mr Lo assists them in wealth structuring, succession planning and even portfolio investments.

Going the extra mile for clients is something he says he picked up from the late entrepreneur Robert E Lee, founder and partner of R.E. Lee International, whom he also credits with the origination of universal life (UL) policies some decades ago.

''I do my work not because of the money I can earn from it ... I work because I like the thrill. I like to meet people, to help a family whose situation is so complicated and to find them a solution. That's what I'm trying to pass on to my team and what I've learnt from the founder of this company, by whom I was fortunate enough to be groomed.'' Mr Lee died in 2015 at age 86.

The seeds of R.E. Lee were planted in the US where Mr Lee began working with various insurers to procure protection for clients. In the 1960s, between US$100,000 and US$200,000 of life cover was considered large. In 1979, R.E. Lee expanded to Hong Kong and in 2001, it opened an office in Singapore.

''We realised there was a huge demand for insurance - not just normal insurance but large amounts in Asia.''

Mr Lo recalls that in 1998, the largest policies were for around US$1 million in sum assured. By 2000, the firm facilitated its first jumbo cover of over US$150 million on a single life, and eventually placed over US$400 million on three family members. Today, the firm has six locations including Seattle and Zurich, with a total staff of 60.

R.E. Lee was a partnership between Mr Lee and Mr Lo's family. Today, his mother is chairwoman, and advises on various matters. Mr Lo joined the firm in 1998 , setting aside his original ambition to become an investment banker. A working stint with an insurance company in Boston opened his eyes to the long-duration nature of insurance portfolios, ''possibly even longer than our lifetime''.

''By then there was definitely a pull factor from the family business, asking me to help. Because that was the time jumbo-sized insurance was introduced in Asia. Demand was off the charts. It was an opportune time for me to be back.''

UL policies have long been a staple among high-net-worth families as part of their estate planning. It may be used to create a philanthropic bequest, for instance, or to enlarge an estate for the purpose of equalising the heirs' share of family assets. It may also be used as keyman insurance by companies. Because it has an immediate cash value, it lends itself to premium financing by clients.

In 2017, the group also set up R.E. Lee International Capital, providing clients with portfolio management services. ''I've been approached by many clients. They tell me - Calvin, since you already know my inner secrets, my wealth, health and beneficiaries, can you help manage some of my funds? This is a client driven demand.''

2020 turned out to be a record year for R.E. Lee International as Covid-19's enforced inactivity - various degrees of lockdowns were implemented across Asia - prompted clients to re-examine their insurance policies and estate plans.

Mr Lo recalls a similar situation during the Sars crisis in 2003-04. ''2004 was a record for us, because people were freaking out. Fast forward to 2020, we face a much more serious situation. Clients who had put off their planning called us. It has been a phenomenal, crazy year.''

The group typically places some US$1 billion in premiums annually. This benchmark was hit by September 2020, and overall growth for the year rose by 25 per cent.

Thirty per cent of the group's business is derived from existing clients. ''From the first group of clients I've dealt with, I sold policies to them for estate planning. They have kids and now they have grandchildren. Now I'm seeing the third generation. So you can see how capital was formed and becomes such a big part of the estate planning. It's interesting to see the torch or the baton being passed down.''

He is sanguine on the impact of low interest rates on policies. The traditional UL policy derives its returns from a specified crediting rate. Ultra-low rates make new policies relatively unattractive, even if premium financing becomes more affordable.

MR Lo, however, says: ''Clients look at the product itself, the strength of the carrier, the payout history. Interest rates have been low for more than 10 years, but premiums have also gone down as well as the cost of insurance as we are living longer ... Every five years the trend may move up and down, but the net value over a long period of time actually works out about the same.''

From his broad experience dealing with wealthy clients, he believes that the dissipation of wealth across generations can be blamed on a failure to plan. ''It's almost impossible to see wealth pass on across three generations. That's a cliche and my response is also cliche: It's a matter of planning. And that isn't as simple as it sounds. I'm fortunate to be exposed to the world through education, but education does not equate success.

''Planning is very important. But even to talk about it 20 years ago was a big no-no. This is where Asia has room to grow. In Europe or the US, talking about one's death and planning for the future is an open topic. Here it's harder.''

Despite a relatively privileged background, Mr Lo says his upbringing was ''very strict''.

''My parents were very strict about spending, for example. And my time at boarding school also trained me to be very disciplined.'' He attended boarding school in Canada in his teens.

''I'm very grateful - no if's and but's about it... My parents would visit me in Canada, and every time they came I would literally shake. My dad insisted I keep a log of my spending. Maybe it was US$20 a month.

''I'd list US$2 for candy or a pencil. And it really didn't add up. And for those couple of days, I'd be on my knees wondering where those dollars went! I wouldn't be able to sleep. Now I can joke about it, but back then it felt terrible. But now I'm grateful for it.''

THE question of the meaning of wealth - and in his case immense wealth - is one he himself poses to his clients. ''I believe wealth is important up to a certain point, and that point varies between people depending on their background or environment. Once you reach that point, something changes dramatically for people.

''I meet many ultra successful people, billionaires. I ask them - What does it mean to you now that you could literally walk out and buy anything? But I still see them working day in and out.

''And there are some people who decline, and can't pass the wealth to the second generation...To me wealth gets you to a certain point that gives you options. Hopefully the option is for people to continue to work to improve themselves, and that doesn't necessarily mean earning more money.''

TAKING THE PHILANTHROPIC ROUTE

CHILDREN are a philanthropic cause that insurance billionaire Calvin Lo feels passionately about, particularly as Covid-19 restrictions put pressure on school systems, families and access to technology.

''Especially in the past year through Covid-19, I see the struggles of children stuck at home and the ecosystem around children and families. Even a simple thing such as Wifibecomes a big problem. Nowadays you lose the human touch.''

Mr Lo is the group chief executive of R.E. Lee International, an insurance brokerage specialising in life insurance solutions for wealthy clients. He has a 10-year old daughter.

His personal charitable foundation, The CFL Initiative, supports mainly three causes - children, animals and the environment.

In terms of wildlife, he has been a strong supporter of long-time friend and primatologist Jane Goodall. Between 2006 and 2018, he served as a board member of the Jane Goodall Institute.

More recently, he spearheaded the establishment of The 195 Project, taking inspiration from the Bretton Woods Agreement in 1944 where various nations came together to hammer out conditions for a global financial system to rebuild the world economy post-World War II.

The 195 Project aims to create a globally diverse think tank, by mobilising business leaders across 195 countries to mount ''an effective economic response'' to the outcomes of Covid-19.

Mr Lo says: ''As responsible business leaders, we all have a moral responsibility to show the world that capitalism can be conscientious. Our challenge is to demonstrate that the wealthiest one per cent do have a conscience, and that success in business is driven less by zeros on a ledger and more by the reward of seeing others lead better lives as a result of our good work.''