About CLIP

Innovating from first principles

This story starts, like most true stories, with first principles. First principles thinking is one of the most effective strategies you can use for breaking down complicated problems and generating original solutions. It was this method of reasoning that Prakash Shimpi’s father instilled into him at a young age.

Always think for yourself. Ask how and why. Break down a problem into its basic assumptions that can’t be deduced any further.

Building on a foundation of expertise

Prakash has long been in the vanguard of the convergence between insurance and capital markets. “A finance wizard” as The Economist succinctly put it. From 2012 to 2016, he was appointed as one of “thirty distinguished professionals in economics, finance, financial services” to advise the US Treasury on emerging risks to the financial services sector.

Over the course of Prakash's distinguished career, he has had to, by necessity, think from the ground up: Designing new methods for insurance companies to hedge risks in their products at Chase Bank; pioneering a new way to manage the financial cost of earthquakes and hurricanes at Swiss Re; and advising global corporations on mitigating their enterprise risks at Towers Perrin.

Indeed, Prakash has applied his ideas and expertise extensively to help large institutions manage their financial risks. All the while, however, he was acutely aware that people all over the world face the very same, if not greater, financial challenges in their everyday lives.

The challenge of financial security

CLIP came about, like so many inventions that go on to transform the way we do things, as a response to a very real-world problem.

Around the globe, people are living longer and running out of savings in their retirement. How do you guard against someone outliving their savings? What if you run out of money early in your retirement?

Over the course of many years, drawing on his background in pioneering actuarial science and finance, Prakash would go on to deconstruct and decouple the mechanics of investment and insurance products such as annuities, questioning whether they truly meet the retirement income needs of ordinary people:

• Why can I not change my mind about my retirement income needs as I near retirement?
• Why can I not create an income stream that reflects my varying needs during retirement?
• Why do I have to give up control of my savings and investment choices to buy an annuity?
• Why can’t I buy an annuity without a guarantee? What does that guarantee cost?
• Why do I have to pay a premium to an insurance company when I buy an annuity? They are just giving me back my money with interest.

CLIP is a better way to live a long life with greater financial security

CLIP – Community Long-term Income Plan – makes innovation in retirement planning and investing available to people who could not otherwise afford such solutions.

What you get out of CLIP is not related to what you personally put in, but to what a group of people - the CLIP Community – contribute together. It creates a second source of income for you during retirement which is paid for only on passing. In short, CLIP better enables you to support yourself for longer in retirement.

With CLIP, you always get more retirement income than without CLIP.