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As a third generation American, Chin’s wonderful rags-to-riches story is one that he built only a few miles away from the neighborhood he grew up in.

Ed was raised just down the street on 7th and Webster in the Chinatown district. “I grew up in a house with not more than 1,200 or 1,300 square feet. We probably had fifteen people at any one time living there. We slept in a cot by the water heater. I think there was something like three or four kids in every room. We had one bathroom and no shower facilities,” Chin reflects on the early days.

As a student, Ed wasn’t the best early on. He was basically a C student. He got bored easily and was always ahead of the teacher. He was probably a gifted student at that time, since Chin scored very high on his IQ tests. Had they offered gifted or advanced classes then, he most likely would have been in them.

“When I was a kid, there were a lot of derogatory racist remarks toward me. I used to get in fights because I would never take it. Big guys, little guys, it didn’t matter. I got caught up in the martial arts because I didn’t want to get whipped at the time,” Chin stresses. “I’ve been a martial arts enthusiast for many, many years.”

Ed studied several types of martial arts. He was fortunate to train with Wally Jay of Alameda, with his uncle, Jimmy Lee and also with Bruce Lee, said to be the finest martial artist who ever lived. Today, Ed’s son Bradley is a silver medal national champion with a brown belt in karate.

“I’m just a salesman,” Chin shares softly with us. “I originally started selling Chronicle subscriptions way back when I was a kid to win trips to Disneyland and everywhere else. Then I sold brushes made by the blind. I was the biggest producer, even then.”

“As a kid there was something I learned. There were two ways you were going to get out of wherever you came from, and that was, one, to have money, and two, to have control of the English language. So I worked very hard perfecting my English language skills.”

“After high school I started college and I later dropped out before I graduated because I had to make some money. I was broke, my father was ill, I needed some money. That’s how I got started in insurance.”

“When my father was ill I remembered him talking to the insurance person. He didn’t have insurance for that particular problem. This insurance man had on a suit and a tie, and I didn’t. I asked him what he makes, and he said, you could make $15,000 a year. At that time, that was three times what a teacher was making. I said if he could do it, so could I,” beams Ed.

“Originally, maybe 18-20 insurance companies turned me down. I didn’t fit the profile, the basic format, the education, grades, family, married, everything on the chart said I didn’t fit. I eventually got on at The Equitable in December of 1960. I later found out that I got on because my boss needed to fill a quota on new hires. Not a racial quota, but a body quota. He had to hire at least two guys a year. I’m sure he would have hired that first guy who came in with a tie on. The first six months I made $36,000. Over the next four or five years I sold a lot of insurance,” smiles Chin.

Ed later moved on and was made a vice president of First American Life Insurance Company formed with capital he helped raise from Asian backers who later moved the company to Arizona. “One morning I woke up in Arizona and went down to the office and the place was empty,” exclaims Chin. “Everything, including the phones. I was in Arizona with only $300 to my name. I gave all my commissions to the company to help build it. Rather than come home and have everybody say, I told you so, I stayed down there and sold insurance and I worked it out and paid everybody off.”

“I later went to a couple of people I knew to raise $5,000 apiece from them. They liked me. So they gave me the money to start my first agency. I later bought out my partners over the next three or four years. I grew the business and sold it in 1975 and retired. Retirement lasted only six months.”

Currently Chin is 100% owner of $25+ million, AIS Corporation, which specializes in helping clients in the employee benefits area. Today, AIS provides benefits to more than 15,000 individuals, employees, executives and owners of small to mid-sized companies. “We found our niche,” explains Chin. “The Asian marketplace is our focus. We dominate it. We have over 1,500 companies we insure. We grow by over 20 companies each month. Our sophistication is far more superior than anyone in this industry. We also speak the language, whether it be Japanese, Korean, Spanish, Mandarin, Cantonese or Taiwanese. There are 300 different styles of the Chinese language. All of my people here speak a minimum of two or three languages. We do all our meetings in the client’s choice of language.”

AIS works very closely with the local multi-ethnic communities they serve. Chin has given back considerably to the area he was born and raised in. Recently, he donated $250,000 to the local Asian Cultural Center for their auditorium which now bears his name. Our strong and innovative leader has also been recognized as Asian Entrepreneur of the Year, Businessman of the Year and was recently in a feature profile in the June, 1997 issue of Money Magazine.

Even with all of the hundreds of awards he and his team have earned, Ed Chin still manages to remain a loyal, humble and proud American who remembers his roots and reminds us, “When you think of America, you think of all of the great opportunities it has to offer us.”

Resource Information:
AIS Corporation
Phone: (800) 788-6524
info@ais-insurance.com

Article found in Fortune Small Business, December 2003/January 2004
ED CHIN
AIS Corp.

Chin is the first to admit that he's cocky and outspoken. So it's no surprise that this third-generation Chinese American "raised hell" at the insurance company where he worked in the 1960s after noticing that Asians were being overcharged for insurance products. But seeing not enough progress, Chin - who calls insurance companies glorified 'bookies "-quit his job and in 1979 started AIS Corp. in Oakland. Today AIS provides small- and mid-sized companies the kinds of sophisticated insurance packages and benefits usually reserved for corporate America.

Chin found his niche by paying special attention to the Asian marketplace. Everyone on his 25-person staff speaks at least two languages, allowing Asian immigrants who call the agency to speak to a representative not only in their native language but often in their particular dialect too. In 1981 he started the revolutionary practice of sending clients a single bill with all their different insurance charges. Over the years he's won numerous industry awards, and clients have spread the word about his company outside the Asian community, keeping AlS growing. Last year his company generated $40 million in sales, twice its revenue six years ago. -CORA DANIELS

While I was at the hospital, I asked the insurance agent how much money he made. He had a suit and tie on but didn't impress me as being really bright. He said someone could make $15,000 a year for selling $1 million worth of insurance. Teachers then only made $4,800 a year. I gave up dreams of teaching and applied for jobs in insurance instead. I must have had 20 interviews and was turned down by everyone. I didn't fit the profile: blond, blue-eyed college graduate, 25 years old with a family. In December 1960,1 finally got a job as an agent at a major insurance firm.

My first six months I made $36,000 in commissions. They asked me if I would sell to the Asian marketplace. They said I could run a Chinatown branch one day. I asked my manager, a Castilian from Spain, why he didn't go and run a Mexican branch.

I was a troublemaker from the beginning, but I did start selling to the Asian market. There was a lot of discrimination against Asians when it came to insurance. Like members of other minority groups, they were sold the products with the highest premiums. On claim forms you had to mark off your race. The choices were Negroid, Caucasoid, Mongoloid, and Other. Mongoloid? Are we supposed to be mentally retarded? I started raising hell about it. But no one could answer that question. I was a leading producer in the agency, but by 1975, when I was 36, I had had enough and retired.

Then, in 1979, I met my wife, so I had to work again. I wanted to start a company that would offer Asian-owned businesses all types of insurance at fair prices. But in California at the time, none of the big carriers wanted to sell insurance through a small, unknown agency. I knew it could work because I knew the insurance business and I knew the Asian community. I speak several dialects of Chinese, as well as Japanese. So I went into the deep corners of Chinatown, Koreatown, and Japantown, and lined up dozens of prospective clients. By 1981, I was selling half a dozen kinds of insurance from companies like Blue Cross/Blue Shield and VSP.

Long before I started my company, I thought that if I could persuade Asian businesses to pool together, they could get better rates. But I knew it was going to be challenging to persuade them to do this. White corporate America doesn't understand that you've got segregation like you wouldn't believe in the Asian marketplace. The Canton guys work with the Cantonese, Shanghainese work with the Shanghainese; then there's the Mandarins, Taiwanese, Koreans, whoever, and everyone looks down on each other. I encouraged them to form business organizations so they could buy in a group. Now we provide insurance to 7,000 businesses and organizations across ten states and have the biggest names in the field working with us. We charge clients for all of their insurance on a single, customized bill, which most agencies say isn't done.

Five years ago, 95% of my business was with Asian businesses. Then I started getting calls from other businesses wondering if we would work with them too. Today my clients are probably 60% Asian, 40% non-Asian. My crusade has always been to bring a picture of what goes on in the Asian community to white corporate America-and bring what goes on in white corporate America to the Asian community.

Ed Chin is the owner of AIS Corporation, which provides benefits to more than 15,000 individuals, employees, executives, and owners of small to mid-sized companies. He has been recognized as Asian Entrepreneur of the Year, Businessman of the Year, and was profiled in Money Magazine. He can be reached at (510) 893-5331 or visit www.ais-insurance.com.

How do small firms compete when they don't have the personnel that the large firms have? We really don't see that kind of competition evolving just yet. If you go to the Chamber of Commerce meetings, you don't see any of the big firms hustling business. The small guys need to stay with small businesses. The leads clubs are great for start-up guys.

What can a small firm offer these businesses? The 7-11 owners don't have time to discuss the attributes of a plan in-person during the business day. A lot of that business is done by phone. Agents should learn better phone skills and take advantage of the Web to get rates.

How do you maintain a sufficient block of business? If small agents don't get together to get larger blocks of business, they will be at the mercy of larger carriers. The little guys are fading fast. They are joining forces with general agencies. We just signed up two big producers who had been spending $10,000 a month to advertise in the Chinese Yellow Pages. Many carriers won't offer more renewals unless the broker has a minimum number of accounts. If an agent is picking up $200 a year per on a case, it would be worth it to pay a general agency $25 when the alternative is to lose the case entirely. Ten years ago, you only had to show the carriers that you had the ability to produce $50,000 in premium. Today, if you can't show them $500,000, they won't contract with you and you can forget the cooperative advertising deals. Most agents will find 35 cases in a year for four to five lives. With life and disability, you always have to write new business.

How do you retain your clients? Having your own Web site with e-mail capacity helps you stay in touch. So many agents have lost guys to someone else who took them golfing. It's out of site, out of mind.

How effective are cold calls? The kind of guy who walks into an office cold is an agent on a salary or a brand new agent hustling for business. When I started out in the 1960s, I would walk in and look for the president. In one case, I wrote 28 employees and picked up their supplier as well. I had that account for 30 years until the business was sold. I don't know if that approach will work as well today. In this high-tech world, if you don't have an appointment, you've got no hope. Also, with today's traffic, it's easier to work by phone and e-mail. Can you afford to drive across town to sign up three people for dental insurance? One strategy would be to visit the little market or the restaurant with two to four employees.

How important is the Internet? You should have a Web site and your Web-site address should be printed on your business card. The next generation of clients will be doing business on the Internet. You have to prepare for that or you will not be in the business.

What kind of advertising works? The California Grocers organization lets us write articles on health and dental in their grocery magazine. We also run an ad. I put the ad in mainly to be able to get into their trade show.

How important are referrals? Personal relationships and referrals work best. I donated money to the Oakland Asian Cultural Center, which named its auditorium after me. My wife is involved in Girl Scouts and the fathers call me for insurance. I haven't prospected for business in 10-15 years. They call me. You earn your stripes. Don't be embarrassed to say, "I'm in the insurance business." Don't say, "I sell financial products." If you say like it like you're proud to be in it, the clients go with it. If you sound embarrassed, they won't respond. Large and mid-sized accounts are very difficult and fickle, but the hairdresser at the local salon becomes a personal relationship. As long as you are in the game, serve them that personal touch.

Individual life and health agents are losing clients to firms that also do property and casualty. How can they respond to this trend? When the client is buying protection, you have to sell them on your ability and skill level. You have to be bold today to get the cases. I would make myself at least semi versed in P&C. Tell them they can go directly to carriers and get good rates and service for P&C. Larger P&C houses are hiring life agents, but the guy who goes to the P&C house is one who can't cut it in the field.

How will the trend toward defined contribution affect agents? If a patient's rights law is enacted, employers will go to defined contribution. We are gearing up for that. We picked up accounts by doing defined contribution. It will be a new opportunity for agents. Even Blue Cross is saying you can now stabilize your costs by letting the employee choose from a menu of Blue Cross products. They are doing it for proprietary products. All the insurance companies will look at doing this, but it won't work unless they develop cooperative working relationships with other carriers. We have the ability to use the Web site to show them Web-site billing. That's going to be more of a selling point than anything.

As a third generation Asian American, Ed Chin's rags to riches story is a true American fairy tale. Chin was raised in the Chinatown district of Oakland, California in a financially poor family but rich with love. Unaware of being poor, Chin and his family always concentrated on what they had and not what they didn't have. This philosophy has stayed true with Chin and has helped him build AIS Corporation into the $25 million corporation that it is today. As president and 100% owner of AIS Corporation, Ed Chin heads one of the largest Asian American owned general insurance companies in the nation.

Originally, Chin was turned down from nearly 20 insurance companies because he did not fit the profile: the education, experience, family. However, he eventually got work in December of 1960 with a local insurance company. But He later learned that he was only hired because his boss had to fill a body quota. Determined to be a success, Chin did not let this get him down. Instead, he proved himself by his hard work and in the first six months he made $36,000 and over the next four or five years sold a gigantic amount of insurance.

Traditionally, Asian Americans have had a difficult time securing affordable health insurance or access to affordable health care services. Realizing this and armed with research data on the Asian American community, Ed Chin did not waste any time in negotiating with and convincing major health insurance companies to provide Asian Americans with affordable health insurance.

The uniqueness that Chin brings to the industry and makes him stand out from the rest is his ability to comprehend bicultural assets. He is able to have a deep understanding of both "Asian ways" and the "Western ways". This blending of both cultures allows Chin to create innovative insurance plans for the Asian American community.

One such innovation is the California Asian Risk Association or CARA. CARA is an unincorporated association dedicated to the research, development, and delivery of employee benefits and high-end compensation plans to the growing Asian American population. Since 1980, CARA has negotiated special programs for the Asian American community ranging from life and disability to medical and dental insurance.

Chin's commitment to the Asian community has been instrumental in the insurance industry's acknowledgement that Asians are good insurance business. Fighting for the Asian American community consistently and being vigilant about keeping rates down for our community - that is Chin's burning passion. He has taken a Caucasian tool and retooled it to work for the Asian American community.

When Edward Chin plays guard in University of California Medical Center pick-up basketball games, he often tires on the fast breaks and asks the coach to take him out. That’s not Chin’s style off the court. As founder and president of Oakland-based AIS Inc., a diversified financial services firm, he is jumping from one proverbial fast break to another – without any thought of letup.

Today, AIS—the name once stood for Associated Insurance Services, but is now simply the corporate name—employs 40 people and expects sales to reach $10 million this year. The secrets of this success are not hard to find. First, Chin is aware of his strengths and, perhaps equally important, his weaknesses. Although the company’s activities include three other basic enterprises—capital planning, which includes real estate and joint venture business opportunities, financial planning and business consulting---some 80% of Chin’s business is still insurance-related. He sees his own role chiefly as an administrator and promoter, and his company as a solution to client financial problems that crop up during the complex insurance analyses that his company specializes in. “I’m not a financial planner,” he admits. “But I have hired some very good people. I would stack them up against anyone.”

Staffing is the second secret to AIS’ success. While other companies curb growth when conducting formal nationwide job searches, Chin’s entire office serves as a local recruiting network. “People bring in people and each new person is interviewed by everyone else,” says Chin. “The staff has grown from within.” Roughly three-fifths of the company’s personnel have come from the Asian-American side of the Bay Area community, and as a group they are not lacking in credentials. Executive vice President Oliver Stafford holds the CFP designation, as do staff financial planners Pamela Lee, Rena Chin (no relation to Edward) and Joanne Kusudo. Vice Presidents Clifford Der and Dennis Hong specialize in benefits and real estate analysis, respectively. This group is assisted by three CPAs and Cary Fong, an MBA-degree holder who serves as the company’s chief tax consultant.

Staff associates often work in pairs to support the financial planners in the drafting of plans. “We engage in networking among ourselves,” says Stafford. “There’s a lot of brainpower and energy under one roof.” One result has been the launch of a deferred-giving concept that works directly through local charitable organizations. Chin sells a program to the charity, receives a list of potential contributors and sets up donations of wealthy contributors to serve as premiums on their life insurance policies. The charity becomes the owner, payor and beneficiary of the policy and begins to receive cash distributions before the donor dies. For the donor, there is a tax deduction, for AIS, there are introductions to wealthy philanthropists in the Bay Area, some of which will lead to new business.

Another staff-generated tool could have more far-reaching consequences. An in-house team made up of Senior Systems Analyst Curtis Wong, Stafford, Lee and Rena Chin has fashioned a software package out of custom-designed programming and financial analysis programs purchased on the outside. The result is a computer-produced financial plan which includes bar graphs and colored pie charts to lay out the investment, insurance, tax, retirement, estate and business planning posture and needs of each client. This, according to Lee, has marketing benefits as well; customers are invariably surprised by the inflation rate projections and by a calculation that shows how many “lost dollars” could have been put into productive investments. The cash flow analysis and action plan alone often run between 10 and 30 pages, depending on the complexity of the customer’s finances. There are internal uses as well; from the data base, any of the planners can segregate data by investment, client characteristics, tax bracket and other features.

Stafford says the company was anxious to avoid the boilerplate approach because of the potential loss of customized service and flexibility. “It’s just as personalized as the old way of doing things,” he says. “It just speeds up the process.” Chin agrees, noting that the continuous process of updating due to technical advances and changes in tax laws can be done at a central location. “You can do two plans a week the old way,” he says. “This way, our planners can do two a day.”

In the past 18 months, AIS has taken 200 clients through the entire profile and another 300 through one or more phases of it. Marketing has gone through the trial-and-error stage; the initial price was a flat $600 ($450 for attendees of the seminars), but the profit margin proved to be too thin. Currently, the company charges $100 an hour and the entire process – gathering data, feeding it into the computer, producing the binder and initiating the action plan—takes 8 to 10 hours. Of the $800 to $1,000, AIS requires a $600 deposit (which can be charged on Visa or MasterCard). If the client remains with AIS, annual updates run $225.

The other secret to the company’s success is shrewd and successful marketing programs. To date, its files include 1,000 corporate and business clients and another 3,500 life and disability customers whose incomes range from $18,000 to $3 million. Many AIS clients have attended the seminars that Chin puts on for employees of large corporations and credit unions in the Bay Area, including IBM, Bechtel and FMC. Their median net worth tends to be a bit downscale of the country’s better-known practices: between $250,000 to $300,000.

A smaller but growing side of the business is support for independent representatives in the Bay Area. “They can use part of our computer system or our investment expertise and still remain independent,” says Stafford. The outside planner is billed at the same $100 an hour rate and then builds that into what is charged to the client. To date, some 300 outside insurance agents either sell products through AIS plans or sell the overall planning concept to their clients.

Finally, AIS has managed to keep the more obvious conflicts of interest from influencing how the company interacts with its customers—something Chin admits is not always easy. The staff of professionals is paid on a formula basis; rather than collect commissions, they receive a compensation based on past production. Although Chin is in the process of creating his own broker-dealer, with Lee and Rena Chin as registered principals, he has no plans to manufacture his own investment products. He has turned down a number of such deals because, in his view, AIS’ people cannot be objective if they push what is in the company’s own inventory.

This philosophy, and the commitment to building a financial services company one step at a time, has made AIS into one of the area’s leaders in the financial services marketplace. Recently, the company moved its offices out of 3,200 square feet of Spartan quarters to a 7,000-square-foot space in the 26-story Kaiser Center, overlooking Lake Merritt in the city’s financial district—a place where Chin believes he now belongs.

Cliff Pletschet is an Oakland, California-based investment columnist.