Liquidity is king and protection needs to be maximized during these volatile times. So, in this issue of Vision, PCS by Mercer Chief Product Officer, Patrick Jiang, explains how both can be achieved. He outlines how the strategy of Bottom Fishing alongside the new wave of index-linked life insurance and savings plans can help clients safeguard immediate cash flow and future liquidity. We also look at three case studies that illustrate the flexibility of protection solutions, which are ever evolving to cater for the changing needs of high net worth individuals.



(This advertisement has not been reviewed by the Monetary Authority of Singapore)


Bottom Fishing: A Strategy for Now

How do you optimize the value of an asset while limiting liquidity expenditure? The two seemingly contradictory outcomes can be achieved if we fully utilize the flexibility in life insurance products while heeding some historical lessons from before the Global Financial Crisis (GFC). How? PCS by Mercer Chief Product Officer, Patrick Jiang* explains.


What are the current key concerns of high and ultra-high net worth clients?

Looming multi-jurisdictional recessionsi, extreme weather and geopolitical events, and the continuing unpredictable effects of the COVID-19 pandemic, including global excess mortalityii, are all contributing to a sense of unease.


As protection experts, we are observing two distinct themes during these times:  

  1. A heightened awareness of the need for protection – both as a hedge against the unforeseen, and, as a stable asset class. In fact, protection impetus is arguably at an all-time high.
  2. In uncertain environments, liquidity is king.

Yet, there seems to be a tension between the two – how do you procure significant protection without tying up liquidity? Reinforcing that tension are the interest rate hikes by central banks around the world, further elevating the value of cash.


Whilst doing nothing can be a tempting holding pattern for individuals during periods of uncertainty, it’s actually time to act – providing your actions are right for the conditions. As advisors, we are committed to helping our clients procure the most protection while minimizing cash outlay. And one of the most effective ways to do so is Bottom Fishing.


What is “Bottom Fishing?”

Bottom Fishing is a strategy of investing in assets that have experienced a decline and are considered undervalued. In short, it’s the concept of buying low and selling high.


In the context of insurance, we are able to capture the concept and similar benefits (i.e. value) with a new wave of index-linked solutions. The solutions cover both protection and saving needs. These products’ underlying growth in value are linked to benchmark indices with full transparency, such as the S&P 500 Index. They encompass downside protection mechanism, ensuring principal protection, while retaining the ability to capture market upside.


How does Bottom Fishing help preserve liquidity while maximizing protection?

Let’s take Universal Life Insurance as an example. It is a highly flexible product that can be incepted without huge commitments on future cash flows. Clients can choose a number of ways and timelines to fund the insurance premiums, and thereby retaining full control over liquidity.


Protection is enhanced in several ways:

  • If a client chooses a product that is international index-linked, the risk can be further-spread across jurisdictions.
  • Indexed-linked Universal Life insurance can include features that allow the policy holder to capture some upsides without loss risk as a “zero” floor can be set by the insurer. **
  • An index-linked savings plan can further strengthen the Bottom Fishing exercise by investing in the reference index (ices), with the goal of providing mid to long term liquidity supplement.

** Upside ceiling limitations are also set by the insurer.


How was Bottom Fishing done in the past?

Whilst not entirely comparable, the current economic conditions, particularly the rapidly rising interest rates, are quite similar to what we experienced pre-GFC. Clients were able to obtain the right protection then. So, we can look to the pre-2008 playbook, which have some invaluable lessons.


What are the key lessons from the pre-2008 playbook?

  1. Secure your principal to avoid catastrophic losses in a market downturn.
  2. Spend your available liquidity wisely: With regards to insurance, this means attaining as much risk coverage as possible with minimal initial cash outlay. We can achieve this  by setting up multi-pay funding schedule with Universal Life-type solutions, as opposed to single premium financing strategy popularized in the low interest rate environment post-2008
  3. Wherever possible, build in flexibility when preserving liquidity. An overfunded Universal Life-type solution is a strong strategy for legacy planning. Over-funding builds future liquidity buffer for any unexpected cash flow needs in later years. The strategy also provides living benefits.

What are some central considerations for clients?

  • The protection solutions that have been appropriate and beneficial in the past few years might no longer be suitable. Therefore, clients are advised to review their protection strategy to reflect present market conditions. This is especially the case if the client has not had regular reviews.
  • Even as more jurisdictions relax travel restrictions, we understand some people are choosing not to travel. To enable choice, PCS by Mercer have the capabilities of facilitating access, review, and inception of a broad range of solutions via our digital and remote processes. Clients can find appropriate solutions from anywhere in the world^.
  • In relation to increasing global mobility, in many jurisdictions, life insurance is classified differently to traditional capital assets, and therefore subject to different tax and legal considerations
  • Irrespective of economic conditions, when used with traditional wealth structures such as trusts - life insurance and savings plans remain key legacy planning tools and can safeguard estates while providing liquidity when you need it most.

Changes are for now, not forever

In the context of life insurance, Bottom Fishing is one strategy to conserve cash right now while creating dependable conditions to realize value in the medium term (i.e., 10-15 year onwards). That is not to say what individuals do today is a “set and forget”. If nothing else, what we have learnt is that adaptability and agility are key to thriving in any condition. So, it’s vital to re-evaluate market conditions on a regular basis and protection plans accordingly.


The market will cycle, the fish will gather elsewhere, and each individual client’s circumstances will change. When they do, we’ll be there to help them adjust their strategy.


*Patrick Jiang joined PCS by Mercer as Chief Product Officer in September 2022.


An insurance thoroughbred, Patrick has worked in various insurance products and solutions roles across institutions. He began his career with AXA, helping to manage their HNW proposition in Asia, with a focus on unit-linked products and investment operations. Patrick then joined Sun Life in their development of the company's local HNW proposition, with heavy focus on Participating (PAR) whole life and savings development and distribution.


Prior to joining PCS by Mercer, Patrick was the Regional Director, Products & Solutions for IPG Howden, providing support for all global offices on products, taxation, solutions, training, and data analytics. Patrick holds a Bachelor of Commerce (Finance) degree from The University of Sydney.




^ Subject to the relevant legal and regulatory requirements of respective jurisdictions

This article is general in nature and not intended as tax and legal advice to individuals. Readers are advised to seek specialist tax and legal advice before making decisions.

Patrick Jiang Patrick Jiang
Chief Product Officer
Private Client Services by Mercer Ltd.


Back to top


Guaranteed Liquidity and Principal Protection for a Savvy Investor




PCS by Mercer client is a retired former director of a successful investment company. He is in his seventies, has two adult children, and three grandkids.


An exceptionally sophisticated investor, our client strategically manages a substantial portfolio of assets in a trust structure. As is the case with many ultra-high net worth individuals, he had hitherto felt insulated by the extent of his wealth as well as his ability to generate ongoing asset growth. But the rising interest rate environment, his wish to ensure ready liquidity for his grandchildren’s future expenses, and the emergence of index-linked protection solutions have together changed his mindset.


When we met him, our client’s clear priority was to create an additional safety net for the third generation of his family in the form of liquidity that will continue beyond his lifetime.


 Key considerations


  • Our client holds a diverse mix of investment assets, and real estate properties. He has also already allocated liquidity for the second generation
  • Expected future expenses for the third generation include weddings and education as well as a buffer against unforeseen circumstances
  • Our client wanted his capital asset protected, and any policy to be funded from the cash generated by his asset portfolio, including real estate rental income



PCS by Mercer tailored an index-linked savings solution for our sophisticated-investor client. In a first for savings plans, the product chosen by our client allows for a flexible payment schedule. The flexibility successfully caters for clients with irregular cash flow whilst planning for legacy.


  • A 0% floor has been established, thus protecting the client’s principal
  • The upside ceiling is currently set at 9.1%
  • The plan offers a long-term compound return of circa 5% annually, with a long-term guaranteed return of circa 1.5% per annum
  • Assuming the premium of USD3M x 3 years is completed, the policy’s breakeven point is expected to be around policy year five

Key takeaways


  • The transparency of index-linked solutions combined with underlying guarantee(s) on policies offer certainty when planning for future liquidity
  • Flexible funding schedules specifically cater for irregular cash flow. Payments can be made at any time, and suit limited asset portfolio liquidity and real estate rental income
  • If client is in a cash-rich situation, there are other plans PCS by Mercer can tailor and offer which reward the ongoing cash flow commitments
  • Index-linked solutions are suitable to serve clients’ savings and protection needs
  • Where accepted by the financial institutions, index-linked solutions may be used as lending collateral at any time
  • Indexed savings solutions can also serve as a long-term stable reinvestment and wealth transfer tool
  • Protection products are continually evolving to meet the unique needs of HNW individuals


Extending Cover and Liquidity: We help this client incept greater coverage with minimal cash commitment



PCS by Mercer client in his late 60s is at the helm of a billion-dollar family-owned business. He and his siblings share responsibilities and ownership of the family businesses through complex structures. The businesses are generally highly leveraged and illiquid.


Our client has a significant personal portfolio predominately consisting of real estate across several jurisdictions, but he has no significant liquid assets.


He has a number of adult children, and unfortunately, our client is dealing with several underlying health challenges which must be considered in coverage applications.


 Key considerations


  1. Our client already owns a number of substantial onshore US policies with sizable coverage. The existing policies restricted his new insurance capacity, and the reinsurers were unable to cover him for significant sums in the offshore arena
  2. The client’s ultimate aim was to create reliable sources of ongoing liquidity for his family
  3. The family’s businesses are jointly held with his siblings and would not be easily accessible at short notice



Our clients are unique individuals, each with singular circumstances, so we found a solution specifically for this client’s needs.


After in-depth consulting and research, we proposed incepting two separate policies with two insurance partners, funding both through a ten-year multi-pay structure.


Policy 1:

Index-linked Universal Life policy with a sum assured of US$25 million. US$1.96 premium/annum for 10 years.


Policy 2:

Index-linked Universal Life policy with a sum assured of US$15 million. US$1.12 premium/annum for 10 years.


Both the policies were incepted using our remote process. The client did not need to travel to access the products from different jurisdictions. 


Key takeaways


In the current rising interest rate environment, the flexibility offered by multiple-pay structured insurance plans can help result in more efficient liquidity management.


PCS by Mercer can leverage the expertise of different underwriting procedures to offer our clients the highest possible cover, using the payment plan that is appropriate to them. 

Anubhav Bhushan  Anubhav Bhushan
Chief Executive Officer - International
Private Client Services by Mercer Pte. Ltd.


Back to top


Immediate Coverage and Plans for the Future: See how we helped a couple gain certainty and predictably in funding their children’s futures



Our client is a thirty-nine year-old male. He runs a successful family manufacturing business, which he has recently inherited in its entirety.  He has two young children, and his wife works alongside him in the business.


The client is concerned about his young children – in the event that something unforeseen should happen to him and his wife. The couple see offshore insurance as a good way of managing the potential risk, as well as a means of providing predictable income for their children in the future. 


 Key considerations


  1. The couple are seriously considering sending their children – when they are older – to study abroad in the U.S. Cognisant of rising inflation, and the growing strength of the U.S. dollar, their informed assumption is that the cost of studying in the U.S. will only increase in the future. Our clients wanted a solution which safeguarded future liquidity, and therefore wanted to explore savings plans
  2. The client is concern that loan liabilities and inheritance taxes will be a burden on his wife and kids should anything happen to him
  3. The couple is not making assumptions about the children taking over the business in the future. They want them to follow their passions in pursuing professional paths (e.g. music, media), but are aware the children’s future careers might not generate the level of income comparable to the family business. They want their children to be able to afford a comfortable lifestyle, and understand the need to plan for asset protection accordingly
  4. Recently, the local currency has significantly weakened against the U.S. dollar
  5. The couple is unlikely to have the time to travel due to business and family commitment, but they would like coverage at the earliest possible opportunity



After careful consideration and research, PCS by Mercer proposed a two-stage protection solution via remote process: 


Stage 1:

  • Two saving plans (one for each child) to address future educational costs and to safeguard their income into adulthood
  • USD1M premium per plan via multi-pay. The multi-pay option helps to safeguard our clients’ present-day liquidity (countering the effects of a strengthening U.S. dollar)

Stage 2:

  • Explore life protection options such as Universal Life and Whole of Life for asset protection purposes

Key takeaways


  • Savings plans can secure future income certainty and predictability
  • Multi-pay options can safeguard immediate cash flow while protecting future liquidity. Payments can be made at any time that is suitable, such as when the local currency is strong
  • If client is in a cash-rich situation, there are other plans PCS by Mercer can tailor and offer which reward the ongoing cash flow commitments
  • Protection products are continually evolving to meet the unique needs of HNW individuals
  • As traditional Universal Life and Savings Plan address different needs, clients should be offered both solutions when appropriate
  • Remote process allows clients to act promptly. Meetings are via Zoom, and documents are signed electronically allowing clients to access, incept, review, and explore solutions without having to travel1

1 Subject to the relevant legal and regulatory requirements of respective jurisdictions

Pornlert Pravichphibul Pornlert Pravichphibul
Managing Director
Private Client Services by Mercer Pte. Ltd.

Back to top