Blog; Quora Answer: What is the Commission, in Singapore, for Introducing a Foreign Investor Willing to Invest Up to US$100 Million?

The following is my answer to a Quora question: “What is the commission, in Singapore, for introducing a foreign investor who is willing to invest up to $100 million?” 

I normally charge around 2.5% of the project value, and that is an unofficial benchmark you should look at.  If you want to do this, however, it is best not be merely an introducer.  As an introducer, you have no value add once the parties meet.  You have to know the business environment, tax implications, insurance required, banking requirements, and have contacts with your own network of tax consultants, financial advisors, lawyers and investment bankers.  As a consultant, your client sees you as a value add, and a business asset.  You are charging him for opening doors, and not merely introducing him to someone.  Business networks take time and effort to build. I do not give out names and numbers easily, or cheaply.

Changing Toastmasters Culture is a Movement, Not Just a Mandate

As I reflect on my time as Division Director for Toastmasters District 80’s Division G, one of the lessons learned in the face of a pandemic is that we need a new direction.  It is past the time where we do things as they were, and pretend that we can go back to how it was once this pandemic is past.  The world has changed, and people have changed with it.  It is time to be ahead of that curve, and not playing catch up. 

One of the things that we need to change, and this is a constant work in progress, is culture.  I am referring to culture at a club level, at a Division level, and perhaps, someday, it would trickle to District level.  My first thought was that such a change in culture would have to be a top-down approach.  That was the basis of my consideration to put in place a team to run for the top three over the next five years.  This involved two years of picking talent, and one term of training them out of those two years.  A three year succession plan was put in place, and bargains were made with other Divisions.  The same rules we use to wage war, are the ones we use in large organisations. 

However, one term as Division Director is enough for me to realise that the District Director is largely powerless if he has no acclaim or support.  As is the nature of such organisations, the most inoffensive rise to the top.  They tend to be largely older men, of little accomplishments in their professional lives, and most importantly, are of little threat to established power bases.  One or two in that line of successive directors would have specific powerbases in one or two Divisions, but little actual mandate beyond that.  This creates a constant state of near ossification in leadership.  Volunteer systems tend to reward mediocrity because there is little consequence for failure, and greater consequences for offence.  It would fail in the corporate sphere because this would effect profits and market share.  It would fail in government because elections would be lost. 

In such hierarchical, volunteer organisations, with no command-type structure, change must come from acclaim, wide adoption, and an evangelical movement.  It does not come from an imaginary mandate in a disinterested election.  Those delegates who take votes seriously vote out of self-interest, and that self-interest tends to favour the status quo.  It is human nature, and human nature is both a hindrance, and a flaw to be exploited.  Changing culture requires a movement, not a mandate.  Mandates have strings attached. 

To experience culture is like being immersed in an invisible ocean.  We can feel the currents, and the changes in temperature, and pressure.  We do not see the ocean itself, although we know it is there.  The fish do not see the sea, unless we remove them from it.  We do not see the air around us until we leave the atmosphere.  In that same vein, culture as a living movement of values and thoughts is better understood by those who are not fully immersed in it, those who can leave that ocean.  When the current is with us, the journey is facilitated, and there is approval.  When the current is against us, everything, from policy implementation, to new programmes faces resistance.

 

Culture change is often the most challenging part of any transformation.  Toastmasters is no different.  Innovation demands a new paradigm, a new set of behaviours from leaders, whether at club level or beyond, and from ordinary members.  These cultural changes are often antithetical to the norms of what we have developed in Toastmasters District 80.  However, that cultural change cannot be achieved through a top-down mandate, even when we have effective leadership.  It is even more implausible when leadership is mediocre.  A new culture must be nurtured, and developed, from within the collective habits and practices of members, through shared perceptions and common values.  People must be guided to a new direction. 

As Toastmasters struggles with adapting to a new paradigm, one with less human contact, clubs have to be more innovative, more adaptive, more cognisant of these changes.  Clubs that are hoping this will blow over, and things will go back to normal will not survive.  Toastmasters who hanker for the old ways will be severely disappointed.  In times like these, we need to examine the purpose of Toastmasters, and consider how we can apply it to the present reality. 

At its core, Toastmasters is about the application of the art of rhetoric at a practical level, for the individual.  It is meant to take the man on the street, and push him to the heights of public speaking so that he can give voice to others like him.  Toastmasters is about making people heard, and validated.  Beyond that, is it about keeping the conversation going so that disparate groups, across cultures, socioeconomic classes, nationalities, ethnicities, and even languages, feel that they are connected to a common ocean of humanity. 

The challenge we have is that people are still invested in the idea that meaningful interaction only occurs in a physical sphere.  Whilst it is true that much of communication is through body language, with modern technology, we have brought intimacy to a new level.  That is the paradox of video meetings.  While we have the ability to reach a wider group of people, all over the world, we are closer to them in intimacy because the camera focuses on us.  This is the difference between stage acting and screen acting.  On the stage, there is distance with the audience, even though the audience is at the play, in the theatre.  Movements have to be big, and recognisable from a distance.  In contrast, on screen, the camera is in your face, and movements have to be subtle, deliberate, and intimate. 

For one, we have to invest in members and potential members that video calls are here to stay.  They will not replace physical meetings, but they have a place in our lives, where professional, or personal.  Just as Toastmasters invest skills into effective communication in a physical setting, they should invest skills into effective communication across the medium of video.  That is the holistic approach.  Until members see the equal value of online meetings, we will continue to see attrition in membership, and a decline in attendance. 

For another, we have to convince members that online meetings have a reach beyond their club, and where there is reach, there is opportunity to be exploited.  Interaction and learning comes both ways, and online meetings are a unique opportunity to engage in cross cultural dialogue on a regular basis.  It is the impetus to move beyond comfort zones.  All this requires concrete steps. 

The very first step is to identify stakeholders at the most basic level, the club.  This means identifying club executive committee members who share those values, or can be convinced of it.  A seasoned Toastmaster who cannot convince people nearest to him of a shared vision is a failed Toastmaster, and should go back to basics.  Everything begins with what is in it for each person.  People are moved out of self-interest. 

The club must then move in that direction, and galvanise the membership.  It is important that this begins with a strong club because strong clubs have that weight to pull the rest of the Area, and then the Division in a new direction.  The Toastmasters system is a pyramid that depends on strong clubs.  This leads to a situation where a strong club president of a major club may have more influence that even the District Director, as long as that club is with him.  It is enhanced when members of that club are themselves sitting on positions in the District, from Area Directors, to various committee members. 

Once that vision is disseminated, and adopted within the club, it becomes part of its culture.  This is reinforced through an internal mentorship programme.  If it is a corporate club, then it requires the support of top management.  This is why it is always important for corporate clubs to have a policy of recruiting management as members, all the way to the C-suite.  The Toastmaster values of the club exercised through the prism of company culture.  When members feel personally aligned and invested in this new direction, it becomes the foundation of a new club culture.  That is leadership vision made manifest. 

The next step is not the Area, but the Division.  Strong clubs dominate their Division, and provide much of its leadership.  And because of the unique structure of the District, a good Division Director controls more votes at the District Council than most District Directors, unless they have that support of these Divisions.  Area Councils are means to empower Area Directors to disseminate the vision of the Division Council, and shape the direction of the Division.  This normally takes more than a term, so any such strategic plan requires planning for more than a single term.  This entails any such Division putting strong emphasis on the succession plan to ensure that the vision is supported. 

Turning a vision into an executive direction supported by a movement is similar to running an evangelical programme.  People must be converted to the cause through engagement, empowerment, and a system of reward and proscription.  At the same time, obstacles and threats have to be identified, and neutralised.  In organisational dynamics, this is often leftover leadership with a vested interest in the status quo.  They are the reason for organisational ossification, and they have to be addressed, sometimes ruthlessly. 

Now, we address the actual mechanics of creating this movement, something we are all part of.  It begins with investment in time and articulation of vision by the team.  It begins when each of us buys into the vision and become active stakeholders. 

Secondly, leadership must never be too simplistic, nor too hasty in translating that vision into the power dynamic of social interaction.  It takes a lot of communication, time, and effort for a vision to be translated, and subscribed to.  The people who follow need to understand how it benefits them before they become believers. 

Thirdly, the issues should be reframed in a manner than the people can understand, can relate to, and finally, subscribe to.  This is the application of the skills of pathos, and ethos, before logos.  The larger the crowd, the less logical.  People are moved by emotion first, before they rationalise it after the fact. 

Fourthly, the people need to feel a sense of urgency to adopt initiatives that support the vision, or it will lose momentum, and be lost in a sea of personal issues.  This is created by identifying an event, and framing the adoption in terms of stark success and failure, survival or extinction, us versus them.  This is done by juxtaposing the why of who and what we are versus an opposing ideology or idea that is inclement to it.  People need a named enemy to be motivated against it, even if that enemy is an idea. 

Fifthly, orchestrate quick wins and small victories.  This is done by celebrating small successes, so that the people are motivated, and directed in the correct direction.  This is the purpose of events such as Achievers’ Day and Members’ Night.  We elevate paragons of the vision, and diminish threats to it.  This steers the direction of the movement. 

To ensure the success of the vision, leadership should not simply declare the cultural shift they seek, because that would be seen as an imposed initiative.  This will create resistance because people are inherently sentimental, and seek comfort in the known.  They will rationalise their misery and failure, rather than address it.  Instead, it would make more sense to highlight paragons, and have people emulate their local heroes we create so that the movement can be nurtured, and steered in the correct direction. 

At every step, there is always work in ensuring that people become active stakeholders, recognising what they gain from this.  This involves continuous engagement, building coalitions of self-interest, and coopting existing networks.  People are always moved by self-interest before altruism.  This requires identifying leaders at all levels, and granting them recognition, so they become invested in the movement.  When people are engaged in the process, they will automatically come up with reasons to advance it.  They will rationalise their support.  This is how we ensure that innovation is adopted expeditiously. 

As these leaders of networks get more involved, we elevate them as icons, we create symbols for people to rally around.  This feeds the “us” versus “them”, cementing loyalty to the movement, making it evangelical within the organisation.  As such, change leaders are themselves symbols of a movement; their mandate of office is secondary.

Reduction to Participating Policy Rates from 01st July 2021

All participating plans policy benefits are currently required to be illustrated under at least two investment return scenarios; an upper investment return scenario (IIRR) and a lower investment return scenario.  This is to provide clients with a reasonable potential range of the level of benefits. 

At present, for Singapore dollar denominated policies, the Life Insurance Association of Singapore (LIA) sets a cap on the upper investment internal rate of return. The lower investment internal rate of return is set to be at least 1.5% per annum lower than the upper rate.  The table below illustrates the current and new IIRR caps.

The following are answers to some possible questions clients will have about this, from AIA Singapore. 

1. What are Participating policies?

Participating policies are policies that provide both guaranteed and non-guaranteed benefits.  The premiums are invested together with other participating plans in the insurer’s participating fund.  Policyholders of participating plans get a share in the profits of the participating fund in the form of non-guaranteed returns, which are dependent on the actual experience of the participating fund.  The key factors affecting the performance of the participating fund are investment returns, mortality and morbidity experience, lapse, and surrender experience, expense risk and business risk.  These non-guaranteed benefits are provided either in the form of reversionary or terminal bonuses; or annual cash or terminal dividends. 

2. What does the illustrated investment rate of return (IIRR) in the policy illustration mean?

The policy illustration is meant to illustrate the potential level of the policy benefits – both guaranteed and non-guaranteed benefits.  One of the key factors affecting the non-guaranteed policy benefits is investment returns, which can vary from year to year.  Insurers are expected to provide clients with an illustration of policy benefits under two investment return scenarios – an upper investment return scenario, and a lower investment return scenario.  The two illustrated scenarios are meant to provide clients a reasonable potential range of the level of policy benefits. 

For each participating product, insurers determine the projected investment return for the upper IIRR scenario based on its asset mix and the expected return of each asset type.  The upper IIRR should not be higher than the insurer’s view of the investment returns achievable over the lifetime of the participating policies.  The upper IIRR should also not exceed the caps set by the Life Insurance Association of Singapore (LIA). 

Currently, for Singapore dollar-denominated policies, the cap set by LIA for the IIRR is 4.75% p.a.  The lower IIRR is to be at least 1.5% p.a. lower, meaning the resulting cap for the lower IIRR is 3.25% p.a.  These rates have been applied since the 01^st July 2013.  With effect from 01^st July 2021, the caps on the upper IRR will be revised to 4.25% p.a., and the lower IIRR is to be at least 1.25% p.a. lower, meaning capped at 3.00% p.a. going forward.  This change will apply to new Singapore dollar-denominated participating policies applications submitted to all insurers from 01^st July 2021 onwards. 

The IIRRs used are purely for illustrative purposes in the policy illustration.  They are not a reflection of the actual returns of both existing and future participating policies.  The actual returns received from a participating policy will depend on the actual experience, including investment performance, of the participating fund that will develop over the lifetime of the participating policy.  Actual investment returns in the future will depend on future economic conditions, actual asset class returns, and asset allocation of the participating fund.  Eventual actual returns received by policyholders may be higher or lower than those reflected in the policy illustration.  These caps on the upper and lower IIRR are reviewed by LIA Singapore on an annual basis to ensure their ongoing relevance and appropriateness. 

3. Do the upper and lower IIRRs represent the upper and lower limits of the investment performance of the insurer’s participating fund?

No.  The upper and lower IIRR are used purely for illustrative purposes only, and do not represent the upper and lower limits of the investment performance of the insurer’s participating fund. 

4. Does the upper and lower IIRRs refer to the maximum or minimum return or yield on the participating policy?

The rates used in the policy illustration are not a reflection of the actual returns of both existing and future participating policies.  The actual returns received from a participating policy will depend on the actual experience, including investment performance, of the participating fund that will develop over the lifetime of the Participating policy.  Actual investment returns in the future will depend on the future economic conditions, actual asset class returns, and asset allocation of the participating fund.  Eventual actual returns received by policyholders may be higher or lower than those reflected within the policy illustration. 

5. How will this change impact existing participating policies?  If so, will there be any bonus reductions?

There will be no impact to existing participating policies which were purchased prior to 01^st July 2021.  AIA shall be maintaining the bonus scale for all current inforce policies this year.  clients will be notified in June or July as part of the annual participating fund update.  The process for inforce bonus declaration follows the usual process, and is not affected by the industry’s change in cap for illustration.  More information from the “Your Participating Fund Update for 2020” brochure will be uploaded on the AIA website on the 08^th June 2021. 

The rates used for the policy illustration are purely for illustrative purposes only and will not affect the actual returns, and thus bonuses, of existing and future participating policies.  The actual returns received from a participating policy will depend on the actual experience, including investment performance, of the participating fund that will develop over the lifetime of the participating policy.  Actual investment returns in the future depends on the future economic conditions, actual asset class returns and allocation of the participating fund.  Eventual actual returns received by policyholders may be higher or lower than those reflected within the policy illustration. 

AIA Singapore is committed to managing the long-term performance of its participating fund for policyholders.  It is also focused on ensuring the security and solvency of the participating fund, and seek to maximise returns on the participating fund’s investments to provide stable benefits to our policyholders. 

6. Are Participating plans still an attractive insurance product solution for clients?

Participating plans continue to be a suitable product solution for clients who want a plan that provides stable returns, including some form of guaranteed cash value coupled with the potential for upside through its non-guaranteed bonuses or cash dividends. 

Participating plans provide both guaranteed and non-guaranteed benefits.  They allow policyholders to share in the profits of the participating fund which come in the form of bonuses or cash dividends.  These bonuses and cash dividends are non-guaranteed and depends on the actual experience of the participating fund. 

Participating funds typically invest a significant proportion of their funds in more stable assets such as fixed income securities, and relatively smaller proportion in risk assets to provide upside, such as equities which are typically more volatile although they have higher potential for higher return.  If the current low interest rate environment continues, the yield on fixed income securities is low, and as a result, longer term participating fund returns are expected to be affected.  Other investment instruments providing clients stable returns would likely also be similarly affected by low interest rates.  For instance, bank deposit rates are mostly under 1% p.a. currently.  As such, participating policies still compare favourably with products with similar objectives and similar level of stability. 

For higher potential returns, clients with higher risk appetite may consider investing in higher risk financial instruments, for example consider investment-linked policies, which have funds investing in more equities.  A detailed risk assessment and profiling is important for determining suitable investment approaches to appropriately meet the risk tolerance or investment objective of clients. 

7. When will the new Singapore dollar-denominated participating plans be launched?

New Singapore dollar-denominated participating plans which will be launched on, or after 01^st July 2021, which will comply with the revised LIA guidelines on IIRR caps.

The following are answers to some possible questions clients will have about this, from LIA Singapore. 

1. Why have the caps on the illustrative investment returns in the policy illustration of participating policies been revised downwards?The downward revision to the caps on the illustrative investment returns in the policy illustration for participating policies is primarily in consideration of the sustained low interest rate environment.  The (LIA Singapore’s objective for this downward revision is to provide consumers with a more realistic range of projected investment returns for individuals to make better informed financial decisions. 

Life insurers are expected to illustrate at least two scenarios; an upper investment return scenario and a lower investment return scenario to provide a reasonable potential range of the level of benefits.  For each participating product, the life insurer is to determine the upper illustration rate to be used in the policy illustration based on its asset mix and the expected return of each asset type.  Life insurers’ illustration rates should not be higher than the insurer’s view of the investment returns achievable over the lifetime of the participating policies. 

2. How are the caps on illustrative investment returns used in the policy illustration determined?

The caps on the illustrative investment returns are reviewed by the LIA Singapore annually to ensure ongoing relevance and appropriateness, considering recent and potential future economic market dynamics.  The caps are determined after considering views of the Association’s member companies on a number of factors including the typical asset class mix that participating funds invest in, such as equities, bonds and property, in the industry and the projected long-term returns on each asset class.  These long-term return assumptions are determined taking into account historical asset class performance as well as global economic outlook.  Both the upper and the lower illustration rate are purely for illustrative purposes and do not represent upper and lower limits of the investment performance of an insurer’s participating fund. 

3. When was the last revision to the caps on illustrative investment returns used in the policy illustration?The last revision of caps on illustrative investment returns used in the policy illustration was in 2013 where the cap was reduced from 5.25% p.a. to 4.75% p.a. for the upper illustration rate.  The lower illustration rate was set to be at least 1.5% p.a. lower than the upper illustration rate. 

4. How frequent will the caps on the illustrative investment returns used in the policy illustration be reviewed and revised?

The Association reviews these caps annually to ensure its ongoing relevance and appropriateness, considering recent and potential future economic market dynamics.  The annual review factors in any changes to the long-term outlook of economic markets, to determine if the caps still reflect a realistic range of projected investment returns going forward for individuals to make better informed financial decisions.  LIA Singapore will revise the caps when the realistic range of projected investment returns have shifted materially.  Such reviews have been conducted annually since the last change in 2013. 

5. Are the revised caps standardised across the life insurance industry?

Yes, all companies across the life insurance industry are required to comply with the caps, meaning they must not illustrate above the revised caps for all Singapore dollar-denominated participating policy applications submitted to the company from 01^st July 2021 onwards.  Life insurers are still able to illustrate at various illustrative investment returns that are below the caps.  In particular, the life insurers’ upper illustration rate should not be higher than the life insurer’s view of the investment returns achievable over the lifetime of the participating product, if this is lower than the cap set by the Association. 

6. Are existing participating policies affected?  If so, will there be any bonus reductions?

The caps are applicable to the illustrations for all new Singapore dollar-denominated participating policy applications submitted to the company from 01^st July 2021 onwards.  The rates used for the policy illustration are for illustrative purposes only and will not affect the actual returns, and thus bonuses, of existing and future participating policies.  The actual returns received from a participating policy will depend on the actual experience, including investment performance, of the participating fund that will develop over the lifetime of the participating policy. 

Actual investment returns in the future depends on the future economic conditions, actual asset class returns and allocation of the participating fund.  Eventual actual returns received by policyholders may be higher or lower than those reflected within the policy illustration.  Life insurers will still follow their existing processes to review the performance of the participating fund in order to determine the bonuses they would declare for the year on existing policies. 

7. Does this indicate that the future investment returns will be lower?

The Association revised the caps on illustrative investment returns downwards taking into account the current low interest rate environment.  The objective of this downward revision is to provide consumers with a more realistic range of projected investment returns for individuals to make better informed financial decisions.  However, it should be noted that the rates used for the policy illustration are for illustrative purposes only and will not affect the actual returns, and thus bonuses, of existing and future participation policies.  The actual returns received from a participating policy will depend on the actual experience, including investment performance, of the participating fund that will develop over the lifetime of the participating policy. 

Actual investment returns in the future depends on the future economic conditions, actual asset class returns and allocation of the participating fund.  Eventual actual returns received by policyholders may be higher or lower than those reflected within the policy illustration. 

8. What are the factors contributing to the eventual returns on participating policies?

Actual participating fund performance depends on many factors, such as claims, surrender, expense experience, business risk, with investment performance being one of the key factors.  The actual returns received from a Par policy will depend on the actual experience of the participating fund that will develop over the lifetime of the participating policy.  In particular, actual investment returns in the future will depend on the future economic conditions, actual asset class returns and asset allocation of the participating fund.  Eventual actual returns received by policyholders may be higher or lower than those reflected within the policy illustration. 

9. How does this change in caps on participating products’ policy illustration affect the benefits and premiums of new policies?

The illustrations of participating products that are currently showing illustrative investment returns above the new caps will need to be changed to illustrate at the new cap or lower, meaning illustrations for new policies for such participating products will be changed from 01^st July 2021 onwards.  It is expected that the illustrated non-guaranteed returns will be lowered in such instances. 

Some life insurers may take the opportunity to also review and re-design the product features of their product offering since they have to make changes to the policy illustration, and accordingly policy benefits and premiums may be changed for new products going forward. 

10. What are the considerations for me if I were to explore purchasing participating policies after 01^st July 2021?

We strongly encourage individuals to engage with your financial adviser representative to decide on policies that are aligned with your personal needs and risk profile.  Caps on the illustrative investment returns in the policy illustration have been revised downwards in view of the current low interest rate environment.  This will provide consumers a more realistic range of projected returns for individuals to make better informed financial decisions.  The upper illustration rate and lower illustration rate shown in policy illustrations are used purely for illustrative purposes and do not represent upper and lower limits of the investment performance of an insurer’s participating fund. 

Additionally, these rates are not a reflection of the actual returns of both existing and future participating policies.  The actual returns received from a participating policy will depend on the actual experience, including investment performance, of the participating fund that will develop over the lifetime of the participating policy.  As such, it does not mean that the eventual actual return for a participating policy purchased before 01^st July 2021 will necessarily be higher than that for a participating policy purchased from 01^st July 2021 onwards.  Actual investment returns in the future will depend on the future economic conditions, actual asset class returns and asset allocation of the participating fund.  Eventual actual returns received by policyholders may be higher or lower than those reflected within the policy illustration. 

11. Is MAS aware or has it endorsed the changes in caps on illustrated investment returns in the policy illustration by LIA Singapore?

The life insurance industry, through the LIA Singapore, sets and reviews the caps on illustrative investment returns used in the policy illustration.  MAS has been informed of the downward revision to the caps on the upper illustration rate and lower illustration rate in the policy illustration.  LIA Singapore’s priority is to provide consumers a more realistic range of projected investment returns for individuals to make better informed financial decisions.

The Power of Miscommunication

At the height of the Cold War, Berlin, for capital of the German Republic and the Reich, was the gauge of how hot or cold it was.  However, by 1989, the Communist bloc was failing.  At first, this was economic malaise, but it was beginning to spread elsewhere.  There was no work, and not enough bread.  Due to a legal loophole, thousands of East Germans fled into Hungary, nominally part of the Communist bloc, and from there, cross into West Germany.  To stem this, the East German government decided to issue temporary permits through the “Anti-Fascist Wall” what they officially called the Berlin Wall,  This was meant to appease any would-be defectors.  The idea was that these were intended to be temporary visas for a later, unspecified date, with no real intent to implement it.  They hoped the people would be placated while they figured out what to do to stem the exodus. 

Unfortunately, the German Democratic Republic, as East Germany was called, forgot to brief the man who was supposed to deliver the news on live television.  Günter Schabowski was an East German politician who served as an official of the Socialist Unity Party of Germany, the ruling party during most of the existence of the German Democratic Republic.  Starting out as a journalist, in 1981, he became a member of the SED Central Committee.  In 1985, after leaving Neues Deutschland, the newspaper he founded, he became the First Secretary of the East Berlin chapter of the SED and a member of the SED Politburo.  He also served as member of the Volkskammer from 1981 to 1990.  He was a hardline Communist, and a brutal man. 

In October 1989, Schabowski, along with several other members of the Politburo, ousted SED leader, Erich Ernst Paul Honecker.  Honecker was the prime  mover for the creation of the Berlin Wall, and the architect of the border guard’s shoot to kill policy.  Egon Rudi Ernst Krenz, Honecker’s long-time deputy, took over, Schabowski became his deputy.  As part of the effort to change the regime’s image, Schabowski, as a former journalist, was named the regime’s unofficial spokesman, and he held several daily press conferences to announce changes.  He had already been in charge of media affairs for the Politburo.  Because Schabowski had spent most of his career in communist-style journalism, where reporters were told what to write after events had already happened, he found it difficult to get used to Western-style media practice of answering questions in an open setting. 

On the 09^th November 1989, shortly before that day’s press conference, Krenz handed Schabowski a text containing the new, temporary travel regulations.  The text stipulated that East German citizens could apply for permission to travel abroad without having to meet the previous requirements for those trips, and it allowed for permanent emigration across all border crossings, including those between East and West Berlin.  The text was supposed to be embargoed until the next morning.  It was also about a future policy that may not be implemented. 

This was the first time Schabowski had read the text, because he was not at earlier meetings, when it was drafted and discussed before the full committee.  However, he felt comfortable discussing it at the press conference.  He said that all one needed to do to conduct a press conference was to be able to speak German, and read a text without mistakes.  How wrong he was.  When he read the note aloud at the end of the press conference, one of the reporters asked when the regulations would come into effect.  Schabowski assumed, wrongly, that it would be the same day based on the wording of the note, and he replied after a few seconds’ pause, with uncertainty, “Das tritt nach meiner Kenntnis ... ist das sofort ... unverzüglich”, “As far as I know ... effective immediately … without delay.” 

The next questions was whether the new regulations also applied to travel between East and West Berlin,  Schabowski looked at the text again and discovered that they did.  When cornered in subsequent interviews, he reiterated what he said earlier.  The news was broadcast on West German public national television channels.  They showed parts of Schabowski’s press conference in their main evening news reports.  This meant that the news was broadcast to nearly all of East Germany as well, where West German television was widely watched.  The news then spread like wildfire with news reports continuing to repeat the news throughout the night. 

As the night progressed, thousands of East Berliners began proceeding to the six border crossings along the Berlin Wall and demanded to be let through.  Live television reported on the gathering people which only increased the numbers of East Berliners coming to the gates.  The crowds vastly outnumbered the border guards, who tried initially to stall for time.  No one was willing to order deadly force, especially with the news and such a vast crowd.  Finally, at 1130h, Stasi Officer Harald Jäger disobeyed orders from his superiors, and opened the Bornholmer Straße border crossing of the Berlin Wall. 

The fall of the Berlin Wall was the key event leading to the end of the East German regime, a state that had been crumbling for many weeks as citizens had been fleeing through intermediate countries surrounding East Germany.  When the gates were opened, for all intents and purposes, East Germany ceased to exist.  The Berlin Wall stood from 1961 to 19989.  It was a monumental physical and ideological barrier between the Capitalist West and Communist East.  What treaties, the threat of nuclear war, and revolution could not tear down, one man who did not attend a meeting and read a brief managed to do so.  We should never underestimate the power of incompetence in communication.

The Civil Servant

In 2003, a story was published in “The Lancet”, about an unnamed French citizen.  He was a married man, with two kids, who worked as a civil servant in Marseille.  One day, his left leg felt rather weak, so he visited a local hospital.  As the doctors ran through his medical history, they learned that when this man was a baby, he had suffered from hydrocephalus, which is a buildup of liquid inside the brain.  The liquid had long been drained away, but the doctors decided to take a few scans and see if this problem was neurological in nature.  What they found astonished them.  The majority of this man’s head was filled with fluid. 

Normally, the human brain is protected by lateral ventricles, which are structures filled with cerebrospinal fluid that act as a cushion for our gray cells.  Liquid flows through these chambers all the time, but in the man’s case, the fluids were not draining.  Over time, the buildup caused his lateral ventricles to swell so much that his brain had been flattened to a thin sheet.  Doctors estimated that his brain mass had been reduced by 50 to 70%, affecting the areas in charge of motion, language, emotion, amongst other things. 

The interesting part about this all was that while his IQ was only 75, he was not mentally challenged.  He held a steady job, raised a family, and did not have trouble interacting with others.  Over time, his brain had adapted to all that pressure, and even though he had fewer neurons than most, the man was, for all intents, a fully functioning member of society.  And his leg was fine.  Once doctors inserted a shunt and drained the fluid, his limb returned to normal.  However, his brain is still pretty small, showing that it does not take much brains to work in the civil service.

Quora Answer: What are the Reasons People Do Not Take Out Insurance?

The following is my answer to a Quora question: “What are the reasons people do not take out insurance?” 

Insurance is part of risk management.  It has a role in estate planning, in risk mitigation for specific activities, and in covering unplanned expenses.  People who do not take up insurance do so for three main reasons. 

The first is that they do not understand the role of the different types of insurance coverage, and minimise its importance.  They do not prioritise it, since it is viewed as an expenditure.  If they do take it up, it is the first item to be dropped in the event of a cashflow challenge. 

The second is that they are sceptical about the role of insurance, or shun it for ideological or religious reasons.  Perhaps they believe that it is against religion, such as some Muslims with their quaint notions of what is shari’ah compliant.  Perhaps they had a bad claim experience, and imagine that this is all a scam. 

The third is because insurance is not a viable option for them.  This could be denial of hospitalisation coverage due to pre-existing condition, or denial of general insurance coverage due to a poor claim history, or they could be somewhere insurance is not well regulated, and the industry has a poor reputation.  This is most likely in developing nations, fraud by insurers or their representatives is not uncommon.