Author: Greg Winterton

Despite their industry now being two decades old (in its current form), life settlement asset managers still, occasionally, have to undertake the role of educator when discussing the asset class with a potential new investor.  One question that is known, anecdotally, to come up is: ‘Why would anyone want to sell their life insurance policy?’   After all, in many countries in Europe, the Middle East and Asia, you can’t sell it, so those less familiar with the nuances of Grigsby vs Russell – and the multi-billion-dollar industry that the case created (albeit approximately 90 years later) – will not know…

Like most asset classes in the alternative credit market, the life settlement industry has had an interesting few years as macroeconomic changes have impacted fundraising and deal flow. Greg Winterton spoke to Anna Bailey, Managing Partner at asset manager Chestnut Capital Management, to get her thoughts on the current state of the space.  GW: Anna, let’s start with something general. What’s your view of the impact of the macroeconomic environment of the past few years on the life settlement market – on both fundraising and deal flow?  AB: The market is still steadily growing – not quite the way I…

Data and analytics firm PitchBook published its full year 2023 report on the insurtech industry in early March, showing that activity from the venture capital funds in the space delivered a six-year low in both the number of deals completed (486) and the aggregate value of deals ($5.6bn).   The data wasn’t surprising to many industry observers: the private markets experienced fundraising and dealmaking challenges last year as macroeconomic (rising interest rates) and microeconomic (the fallout from the collapse of Silicon Valley Bank in March) forces conspired to put the brakes on the extraordinary recent growth rate in the space.  The…

Lloyds Banking Group is selling its c.£6bn Scottish Widows in-force bulk annuity portfolio to Rothesay. The business to be transferred covers the pension benefits of approximately 42,000 people. The acquisition of the Scottish Widows portfolio represents Rothesay’s sixth acquisition of in-force annuities. The transaction, which is subject to regulatory approval, is initially structured as a reinsurance agreement for the in-force bulk annuity portfolio, with a Part VII process to follow next year. “I am delighted that Lloyds Banking Group has chosen Rothesay as the long-term home for its bulk annuity business and look forward to welcoming our new policyholders from…

The pension risk transfer (PRT) market in the UK exceeded £50bn in aggregate volume in 2023, a new record, according to consultancy firm, Hymans Robertson. The firm has analysed 2023 full year results from a majority of insurers, and says that over 254 transactions took place last year with an average size of around £190m, with over 158 transactions transacting in just the second half of the year. “Last year (2023) was an incredibly busy year for the risk transfer market as many defined benefit pension schemes used their improved funding levels to target whole-scheme buy-in transactions,” said James Mullins,…

Insurance and pensions provider Royal London has announced that it has been preparing to enter the UK’s booming bulk annuity market. The firm announced its 2023 results on 8 March, with the top line being a profit share of £163m, up from £155m in 2022, to be shared in April 2024 with over two million eligible customers who have life and pensions policies with Royal London. But the talking point for the pension risk transfer market in the UK was a bullet point further down the press release, that stated that the firm: “Extended our annuity capabilities in advance of…

The alternative credit industry experienced something of an up-and-down year in 2023. On one hand, fundraising pulled back as investors rotated into more liquid, higher yielding credit investments, and on the other, existing funds, particularly in the private debt space, with floating rate loans enjoyed higher returns.  The impact of higher interest rates was certainly felt keenly in the life ILS corner of the alternative credit space last year, in both capital raising and deal activity. In the former, the reasons were consistent with the alternative credit market at large.   But in deal flow, certain trades experienced a retraction in…

The past few years have been arguably the most significant ever to those studying longevity and mortality, with a range of issues impacting the field, and consequently, actuaries and risk holders. Greg Winterton spoke to Nicola Oliver, Director of Life and Health at consulting firm Medical Intelligence, to get her thoughts on the current state of the space.  GW: Nicola, you advise actuaries and companies about the impact of the provision of healthcare on longevity and mortality. So, let’s start with Covid-19. What are some of the hangovers in terms of the provision of healthcare that the industry is still…

The reverse mortgage market in the US has had a tough time of it in recent years. The volume of HECM loans in the primary market has been steadily falling over time, from more than 100,000 mortgages annually in the market’s heyday of 2007-2009, to approximately 33,000 in HUD’s fiscal year 2023.   The rising interest rate environment of the past two years has been a contributing factor in the dampening of demand, which, should rates start to come down again in the next year or so, could pick up. But other events have hurt the industry of late. In the…

Many subsets of the alternative investment industry have a preference for either open-ended or closed-ended funds. Hedge funds tend to be almost always open-ended, whereas private equity or venture capital funds tend to be almost always closed-ended.  The life settlement industry hasn’t – yet – settled on one or the other. But anecdotal evidence suggests that, at least at the moment, the closed-ended model is increasingly finding favour.  A couple of reasons exist as to why, according to Patrick McAdams, Investment Director at SL Investment Management.  “It’s a combination of the administrative burden and cash management considerations,” he said. “A…