Author: Greg Winterton

Life Risk News UK Pension Risk Transfer Consultants roundtable

The life settlement industry tends to measure its size based on the US dollar value of policies transacted in the space’s secondary market, which was $4.5bn in 2022, according to data published in the summer by The Life Settlement Report, part of The Deal, which uses data from state insurance departments to collect this information.  The industry’s tertiary market is, by most accounts, much larger. And almost all funds will transact every year. But exactly how large is the market? It’s difficult to know because of a lack of publicly available information. And specifically, we’re looking at AUM here, so…

Consumer awareness in the secondary life settlement market is a perpetual hot topic in the industry. Greg Winterton spoke with Michael Freedman, CEO at life settlements provider Lighthouse Life, to get his take on the current state of consumer awareness in the space and what could be done to improve.  GW: Michael, let’s start at the beginning. If you were grading the current state of consumer awareness in the space, what grade would you give, and why?  MF: Greg, thanks for the opportunity to share some thoughts related to consumer awareness in life settlements.    Consumers’ – particularly seniors’ – awareness…

The UK government’s plan to reform the country’s insurance regulatory regime took its latest step on 28th September with the publication of the Bank of England Prudential Regulatory Authority’s (PRA) Consultation Paper regarding the planned changes to matching adjustment (MA) portfolios.  One of the key points that British politicians are trying to push here is that they want the insurance sector to be able to invest in a wider range of assets than they currently can (because of the restrictions imposed by the existing Solvency II regulation). Pursuant to that objective, one of the most significant changes comes in the…

The US is now the only remaining nationwide secondary market for consumer life insurance policies. That’s because the German Traded Life Policy (TLP) market has gone the way of the Traded Endowment Policy (TEP) market in the UK – i.e., it is now largely defunct. Unlike the TEP market, however, it’s the macroeconomic environment, not the regulatory one, that is responsible for the demise. Higher interest rates have essentially put paid to an entire industry that was, essentially, an interest rate arbitrage play. Policies paying interest rates of, say, 3%, were purchased during the era of central bank zero interest…

Life insurance companies have a reputation for being something akin to an oil tanker – big, and slow. But their approach to incorporating generative AI (GenAI) into various functions of their businesses can hardly be claimed to be thus. A snap poll conducted by technology research and consulting firm, Celent, in June this year revealed that nearly 10% of life insurers in the United States were already using GenAI in production. And 50% said that they would be either using GenAI in a live environment or in a test environment before the year is out. The technology is being used…

The UK’s Continuous Mortality Investigation (CMI) carries out research into mortality and morbidity experience and produces practical tools that are widely used by actuaries. It published its most recent set of projections in July, showing lower life expectancies. So, for August’s poll, we asked, ‘How Significant Will the Impact of the Latest CMI Data on UK Life Expectancy Be on Life Risk Markets?’ Our readers were split. 47% said they thought that the latest report was ‘very significant’ because we’ve not seen changes like this in some time, but 41.2% said that it wasn’t significant, because many other factors are…

The involvement of the capital markets in terms of its capability to absorb longevity risk has been talked about for years, but action has been largely absent. Life Risk News’ Greg Winterton caught up with David Blake, Professor of Finance & Director of the Pensions Institute, Bayes Business School, to get his thoughts on the current state of the longevity financing conundrum. GW: David, let’s start with mortality. The CMI recently incorporated Covid-19 data into its mortality projections, the result being lower life expectancies. What’s your view of the impact here? DB: In July 2023, the CMI reported that deaths…

Participants in the UK equity release market – insurance companies, advisers and consultants – generally agree that the industry has something of an awareness challenge. Despite industry efforts in terms of media advertising, many in the over-55 cohort – those homeowners who can take out an equity release mortgage – either don’t know that the option exists, or might have come across it in passing, but haven’t taken the time to explore the nuances of the option. The current macroeconomic environment is changing that, however. And, according to Rudy Khaitan, Managing Partner at UK-based later life lender Senior Capital, there’s…

The life settlement market enjoyed a ‘win’ on July 27; the Supreme Court of Arizona answered “No” to the question: “Does Arizona law permit an insurer to challenge the validity of a life insurance policy based on a lack of insurable interest after the expiration of the two-year contestability period required by A.R.S. § 20-1204?”  The case is the latest of many legal contests between life insurance companies and life settlements investors on the topic of insurable interest; the former, in this case, Columbus Life Insurance Company filed suit in Arizona, claiming that a life insurance policy on Howard Peterson, who…