Author: Greg Winterton

Everyone has wanted to know about the likely future impact of the pandemic because of worries about their own health as well as societal and economic health. But there’s one group of people particularly interested: holders of mortality risk, such as life insurance companies and life contingent structured settlement investors. They wanted to know whether the Covid-19 pandemic would be so severe that mortality rates would spike high enough to bankrupt their operations. It didn’t turn out that way, fortunately. And Matthew Edwards, Proposition/Innovation Lead, UKI Life at consulting firm Willis Towers Watson, says that even though the past two…

Longevity risk – the risk of insured individuals living longer than expected – is a thematic one in the life risk industry, having far-flung ramifications for insurance companies and capital markets participation in life risk. This month, Chris Anderson, Senior Manager, EMEIA Insurance – Risk and Actuarial Services in EY’s Edinburgh office discusses the impact of longevity from an actuarial sciences perspective. LRN: Chris, let’s start at the beginning. What is the main topic or theme in longevity risk from an actuarial perspective right now? CA: One of the topics that keeps coming up is whether and how to adjust…

Historically, much of the conversation about the decades long continuous improvement in mortality rates has revolved around behavioural changes, such as stopping smoking, doing more exercise, and eating a better diet. Of course, these remain recommended public policy endeavours by governments around the world. These are general recommendations, however, aimed, from a statistical perspective, at a large population just as much as they are aimed at an individual. But what has emerged in recent years, however, are advancements in technology that are enabling more tailored risk assessment and treatment of the individual, advancements that will have a profound impact on…

Life Risk News’ Editor’s Letter for the May 2022 issue

To the uninitiated, the ‘Life Risk market’ is an umbrella term those in investment circles use to describe the transfer of mortality or longevity risk from the primary market to the capital markets. It manifests itself as two sides of the same coin; ‘mortality risk’ refers to the risk of loss arising from a population that experiences a shorter than expected lifespan whereas ‘longevity risk’ considers the opposite, i.e., risk of loss arising from a population that lives longer than expected. It’s a vast area of finance but one that has historically garnered relatively little attention as a coherent asset…

In public and/or more liquid markets, at the onset of the Covid-19 pandemic, it seemed like everything was correlated; public equities and government bonds all fell sharply as investors sought to liquidate amidst the initial panic. But the panic also spread to the private markets, with private equity portfolio company valuations being written down as investors had to re-model their portfolio company forecasts to adjust to the lockdown environment. Insurance company stock prices certainly took a hit. But in insurance circles, the big question was whether the pandemic was going to be so severe – and cause such an increase…

Patrick McAdams, Investment Director at SL Investment Management, was a founding member and first Chairman of the European Life Settlement Association. McAdams spoke to Life Risk News to explain the genesis of the organisation and his hopes for the future. **** LRN: Patrick – you were part of the founding of ELSA in 2009 but the Life Settlement industry is based in the United States. Why did you think that an association for European firms was necessary? McAdams: Prior to ELSA’s formation, the only association in existence focused solely on U.S. life settlements was the Life Insurance Settlement Association (LISA).…

The life settlement market has had more than its fair share of challenges in the past decade or so. PR issues plagued the sector as many investors – at least, publicly – stayed away from the perceived negativity attached to longevity risk, and the global financial crisis saw some open-ended funds gate their investors as redemption demands threatened their liquidity – and existence. In the last five years or so, the industry had been on something of an upward swing as investors were forced into looking at alternative investments, like life settlements, that can provide an acceptable yield for their…