It has been an exciting year at PCS by Mercer with the appointment of two new CEOs as well as Global Heads of Business Development and Operations. We are ready and set for serious growth.


In this final issue of Vision for 2021, we hear from Christina Wong and Davin Wong, our new CEOs in Hong Kong and Singapore respectively. Joseph Low, PCS by Mercer Group CEO, shares his thoughts on the coming 12-24 months and we introduce the Vision Editorial Committee, revealing the highlights of their editorial year.


Safety nets grow in a brighter future


PCS by Mercer Group CEO, Joseph Low, reflects on the changes in the past two years, forecasting a buoyant market 

Changes are opportunities in the life protection space


The world continues to change, vaccination rates are up, and borders are reopening. There is cautious optimism in the air; people want to reclaim the lives they have missed, but their underlying concerns are still there. With PCS by Mercer solutions, life can resume – with a strong safety net.


In the past two years, the biggest change we have seen is mindset of our clients. Most of our clients have a net worth between US$50 million and US$1 billion. Irrespective of the extent of their wealth however, before COVID-19, they prioritized wealth creation and many probably felt invincible. Since the onset of the pandemic, there has been a marked change.


Our clients now have an increased, even acute, awareness of mortality and the general ephemeral nature of life. Many are seriously examining succession, wealth transfer and their long-term legacy. Liquidity and income guarantees have also become prime concerns. All of that means it’s now easier to have conversations about life protection, and in fact, some prospective clients are initiating the conversation, rather than waiting for an approach.


In some jurisdictions, we are anticipating increased demand in offshore and onshore insurance planning as clients prepare for asset duties, or property/gift and estate tax.


PCS by Mercer’s client service model as the world learns to live with COVID-19


We are dedicated to servicing our clients however they need, so we take different approaches as required.


The remote life protection broking process – which PCS pioneered at the beginning of the pandemic – remains an important method through which we are connecting with any of our clients who would prefer it. Because even those who can travel relatively unencumbered might not choose to do so just yet. We have demonstrated our agility throughout the pandemic, and we continue to look for new ways to service our clients.


The best team for the next 12-24 months


We are really optimistic about 2022 and 2023. There is a lot of pent-up demand and the increased opportunities for face-to-face meetings mean conversion rates will be higher.


Life insurance as financial instruments that offer stability are increasingly attractive in the current environment in which equities growth is facing potential headwind and interest rates remain favorable.


To capture that market potential, we have grown our capabilities and appointed more experts. We have an exceptional team; Christina Wong and Davin Wong were recently appointed as CEOs in Hong Kong and Singapore respectively, and Bill Johnston leads the business development team globally while Jason Kwong was appointed Group Deputy COO and leads the Ops team across Singapore, Hong Kong and China


Strengthening partnerships


PCS by Mercer is a business that is intrinsically dependent on strong personal relationships, and we are all deeply grateful for our strong collaborations with our banking partners, particularly those who have flexed with us throughout the past two years. I would like to take this opportunity to thank you all; the future is looking brighter than ever, and we look forward to working even more closely together. 

Life insurance for the high net worth (HNW), Hong Kong and Mainland China

Christina Wong recently joined PCS by Mercer as our Hong Kong CEO. Here, Christina shares her thoughts on life protection solutions for high net worth (HNW) individuals, emerging trends in Hong Kong and our growing capabilities in Mainland China.


What are the advantages of life insurance products for HNW individuals?


The traditional view of life insurance as solely coverage for mortality risk is a bit like seeing smart phones as appliances to make phone calls – technically accurate but also missing 95% of the picture.


The ever-growing suite of life protection products are highly flexible and individual solutions have evolved over time to address the specific financial needs of HNW individuals. As such, life insurance should really be seen as both a financial instrument as well as a financial safety net for multiple generations. From that perspective, life protection is an essential element in any HNW individual’s asset portfolio.


Life insurance is a standalone item, and it can offer immediate liquidity to beneficiaries. The liquidity is stable as it is unrelated to the investment market, which can be highly volatile, giving HNW individuals better security and peace of mind.


Another advantage of HNW life insurance is its potential as a tax efficient financial instrument*, especially in wealth transfer plans and processes.


A few years ago, HNW insurance conversations largely revolved around Universal Life. But in recent years, it has moved to Private Placement Life Insurance (PPLI), Variable Universal Life (VUL) and Savings Plan, do you have any thoughts on why?


Demand for life protection products is on the rise and will likely continue to trend upwards. There is a lot of buying power that has been preserved over the last two years, and for a number of pandemic-related reasons, legacy planning will remain a key component when clients are planning their risk management solutions.


More bespoke tailoring of solutions in changing environments is one factor in the increasing popularity of a wider range of products. One size does not fit all, and PCS is committed to finding the best solutions for our clients.


Savings Plan has been popular because it is a wealth tool with many benefits, including being an effective wealth transfer solution, having multi-faceted death benefit settlement options and pre-determined breakeven, as well as tax deferral potential. Its utility as an asset means that Savings Plan will continue to be popular. Similarly, PPLI and VUL also have specific facets that have increased their popularity.


What are the trends for estate and legacy planning for wealthy Hong Kong families?


From our conversations with our clients, it’s apparent many Hong Kong clients think and strategize on generational timescales. They view their wealth both in terms of a legacy and as the source of their lifestyle. Within that now-and-forever approach, HNW Hongkongers recognize it is increasingly difficult to achieve the same magnitude of success they themselves have had in the past. As a result, they are now prioritizing strategic wealth preservation over wealth creation. They want to ensure their children are able to enjoy the fruits – not the liabilities – of their accomplishment.


In Hong Kong families, which are increasingly smaller in size, their primary driver in these uncertain pandemic times is to protect and defend their assets. The unpredictability of equities markets globally is also amplifying the risk-aversion of Hong Kong families. So, more than ever, insurance is seen as a tool to cover mortality risk as well as a safeguard of their lifestyle.


What are PCS’s capabilities in Mainland China?


We are constantly expanding our footprint in Mainland China, it’s a very important market for us. To assist our clients, PCS by Mercer is now able to leverage our license from the China Banking Insurance Regulatory Commission. The license allows us to trade as a foreign broker and cover all available lines of insurance brokerage in that market. Accordingly, PCS has expanded our suite of risk advisory and insurance broking services to the full spectrum available.


We currently operate in three major cities – Shanghai, Beijing and Guangzhou and have plans for strong expansion into others. 


Christina Wong is the CEO of PCS Hong Kong. She joined in October 2021 with over 20 years of experience in the insurance and banking industry. Ms. Wong was most recently the Head of Third Party and Private Banking Distribution at HSBC Life. She was instrumental in the growth of its high-net-worth client segment. Prior to HSBC, she held similar leadership roles at Transamerica Life Bermuda, MetLife, and Zurich International Life. 


Christine holds a Bachelor of Arts degree from the University of British Columbia in Canada.


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

Insights into latest insurance trends

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.


How is COVID-19 continuing to impact the market, including in terms of coverage, processes, and product features?


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.


How can you ensure seamless communications with PCS clients given the COVID-19-induced challenges?


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.


What specific functions are HNW clients looking for in their insurance products?


We can see three key trends:


a) Increased life cover with guaranteed features on cash value and death benefits (Whole of Life products)

b) Income-generating tools that provide guaranteed withdrawal features to supplement income for themselves, family members and others they want to look after (Savings Plans)

c) Control of the underlying assets within their insurance policy has also been trending for savvy investors (Variable Universal Life products)


How has COVID-19 impacted the role of banks in the wealth planning process?


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.


What should US residents/citizens be mindful of when selection life protection products?


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.**


What are the ingredients for a holistic wealth planning discussion and how can that be structured for the best outcome for everyone involved?


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.  


*Davin Wong joined PCS from VP Bank where he served as an Executive Director. He previously held similar leadership roles in Bank Julius Baer, ANZ, UOB, DBS and HSBC. Davin has over 20 years of wealth management, client advisory and private banking experience in both frontline and leadership roles. 


Davin holds a master’s degree in Advanced Finance and a bachelor’s degree in Accounting and Finance from The University of New South Wales (UNSW), Australia.


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

Top 3 in 2021

Dear Readers,


In this final edition of PCS Vision for 2021, we would like to take the opportunity to sincerely thank-you all for your continuing readership and support. Our audience has steadily grown, and thanks to you, we are fast becoming the ‘must read’ newsletter in the Life Protection industry.


To finish this year on a high, we are re-sharing Vision’s top three most popular articles of 2021:


In Shifting Priorities, PCS by Mercer Senior Vice President, Isaac Lim talks about the changing mindset of ultra-high net worth (UHNW) individuals and how it’s dramatically affecting the largest wealth transfer in human history.


In Fair, Equitable and Safe, Vice President, Kunal Bhargava shares a case study we on how we helped a businessman navigate medical challenges, price sensitivity and multiple heirs – to evenly distribute his wealth to two generations while safeguarding his wishes and the business.


In Financial Security, Senior Vice President, Daniel Ling takes us on a journey of siblings managing a listed family business. We see how Savings Plans and Life Insurance policies can work together to protect the long-term prosperity of an entire family now, and into the future.


Take care over the New Year. We’ll be back in January 2022, and we are look forward to sharing many more industry trends and insights with you.


Elaine Chan, Justin Chua, and Cindy Leung

- PCS Vision Editorial Committee -