Inside the world of life insurance brokers


The insurance sector is one of the most lucrative industries that one may invest or get interested in working in.

It involves a variety of professionals such as insurers, agents, and brokers, all of who earn money by selling insurance policies to customers. Insurance brokers are intermediaries between clients and insurance companies, who represent the customers before the companies.

They make money by fees from insurance companies after the successful placement of a policy.

One of the most successful life insurance broker in the world is R.E. Lee International, ran by Calvin Lo.  The company specializes in estate planning and wealth management for ultra higher net worth individuals and businesses, through the use of life insurance.

Under Lo’s leadership, the group places premiums to the tune of US$1 billion annually (Ostrager, 2018, p. 1). In this regard, this article discusses how insurance brokers make money, with a focus on Calvin Lo, the owner and CEO of R.E. Lee International.

Calvin Lo is one of Hong Kong’s billionaires who has managed to stay off the radar of most wealth assessment rankings. He is the CEO and owner of the most successful life insurance brokerage companies in the world, R.E. Lee International. Additionally, Lo is the Founder of R.E. Lee Capital, an asset management firm that manages more than US$8 billion of assets (Pednekar, 2020, p. 1).

His clientele comprises of elite and wealthy individualsfrom across the world. Moreover, Lo is also a philanthropist and sits on the Jane Goodall Institute board to help in promoting environmental conservation and animal welfare.

Although he has accumulated an estimated US$1.7 billion net worth, he has managed to stay out of public scrutiny. Bu all accounts, he is a disciplined and hardworking individual who has transformed his lifestyle significantly.

Lo’s primary company is R.E. Lee International, originally headquartered in Seattle, Washington, but now in Hong Kong. The company was founded in 1954 to offer solutions to ultra high net worth individuals regarding estate planning and business successions. The company has clients from over 65 countries around the world, who seek services estate planning solutions.

According to Braun, Cohen, Malloy, and Xu (2018, p. 14), “R.E. Lee International is an international broker who specializes in estate planning for ultra-high net worth individuals.” The organization advises clients on various estate planning solutions by using the best insurance companies across the world.  In turn, they receive a fee from the insurance company.

Life insurance brokers make money by fees received from insurance companies for the policies they sell on behalf of the company. Many a time, insurance brokers are confused with agents.

While agents are affiliated or employees of a specific company, brokers primarily serve the customers rather than the insurers (Bonner, 2019, p.1). Their main job is to help customers in making decisions regarding the insurance policies they purchase.

These individuals or companies have extensive knowledge of the insurers available and the types of benefits they offer. Therefore, they are the perfect advisories for clients who have little experience in the kinds of offers available for them. Since they provide consultancy and advice to customers, the brokers receive fees for their services.

Typically, “a life insurance agent receives anywhere from 30%-90% of the amount paid for a policy (also known as the premium) by the client in the first year. In later years, the agent may receive anywhere from 3-10% of each year’s premium, also known as renewals or trailing commissions” (Bikker, 2017, p. 34).  While these calculations are only general rule of thumb concerning life insurance agents, brokers have similar fee calculations.

As a result, since it is widely known that R.E. Lee International places an estimated US$1 billion of premiums annually, one can easily calculate how fast Lo can accumulate wealth.

Conclusively, a life insurance broker makes money through fees received by insurance companies. One of the most successful insurance brokers is Calvin Lo. He owns and runs R.E. Lee International, a multinational brokerage firm.

The company was founded in 1954 and is entirely family-owned. It places an average of US$1 billions of premiums annually.  Although the work of a broker is not for the faint-hearted, the fortune is usually massive.

The huge amounts of revenue these companies make, will surely make you choose wisely the next time you get a quote online.