Author: Greg Winterton

The size of the life settlement market is difficult to measure, given the lack of both publicly available and industry-produced data when compared to other alternative asset classes. So, for this month’s poll on Life Risk News, we asked our readers for their best guess; the results were fairly evenly distributed. Perhaps unsurprisingly, a small percentage of readers felt that the total size of the industry was less than $5bn AUM. After that, however, opinion was fairly evenly split. 32.7% of readers think that life settlement industry AUM is between $5bn and $15bn; the exact same percentage think that industry…

In a unanimous decision on October 20th, New York state’s highest court recently held that the First Amendment to New York Department of Financial Services’ Insurance Regulation 187 is constitutional. Life Risk News spoke to Barry Flagg, Inventor, Founder and President of Veralytic, to learn more about the implications of the ruling on the life insurance industry. LRN: Barry, the to-ing and fro-ing around New York state’s Reg 187 has finally come to an end. In your view, what is the immediate implication for the life insurance industry now that it has clarity going forward? BF: Now that the to-ing…

When conducting investment due diligence on a strategy for inclusion in their portfolios, one of the first things that investors look at is the volatility profile of the return stream. It’s understandable, because timing an investment is one of the hardest endeavours in finance – just ask people who bought Bitcoin in 2017 and 2021 – and if attractive medium-long term returns seem to be influenced heavily by timing, that’s a tough sell to an investment committee. It’s also understandable because most investors have public equity and/or public/liquid credit experience. So, it makes sense to apply this logic to alternative…

The current macroeconomic environment is having a significant impact on millions of people and businesses across the world, and in terms of the alternative investment industry, some hedge fund strategies are struggling, some private equity-backed companies are beginning to suffer, and start-ups promising the next great idea are finding it harder to secure venture capital funding. The going isn’t as tough in the life settlement market. Inflationary pressures don’t impact this corner of the investment world like they do others; the passing on of costs to the consumer – in this instance, the fund which owns a portfolio of secondary…

Alternative credit comes in many different shapes and sizes, with fund managers of all sorts of strategies competing for a slice of an institutional investor’s illiquid credit allocation. The risk exposures and sources of return in these products vary significantly, and each has a solid claim for a place in a diversified portfolio for different reasons. One of the few things that most of these products have in common is that a rising interest rate regime, in theory, makes them less attractive to investors; traditional, liquid fixed income investments have always offered lower risk and better liquidity terms, but now,…

The current macroeconomic environment – higher inflation, rising interest rates, the threat of recession – all factor into making this a challenging time for consumers. The older population – at least, those who are homeowners – have the option to release liquidity from their homes via the equity release option (reverse mortgages in the United States). So, this month, we asked Life Risk News readers whether they think that we could see more activity in this market due to macroeconomic pressures. Surprisingly few think that the current environment will be a catalyst for more activity here – only 8.70%. Almost…

U.S.-based trade association the Life Insurance Settlement Association (LISA) published its inaugural market data report earlier this year, a first for the organisation; 23 members contributed data anonymously and the results help market participants get a better sense of the size of the industry. Life Risk News spoke to LISA Vice Chair and Chairwoman-elect, Sherry Duarte, about the organisation’s achievements in 2022 and plans for next year. LRN: Sherry, the market data report published by LISA earlier this year was a first for the organisation. What are some of the highlights from the report? Earlier this year, LISA released findings…

Blockchain technology investment continues apace. According to GlobalData, venture capital investments in the blockchain sector increased from $2.1bn in 2020 to $14.8bn in 2021. This year looks set to set a record yet again. The life settlement market is not typically associated with cutting-edge…anything. It’s an industry that is still ‘paperwork’ intensive – buyers of life settlements need medical records from (often multiple) doctors, it’s a heavily intermediated market with insurance agents, brokers, lawyers, providers and more all being involved in the process of completing a transaction. Increasing the expeditiousness with which transactions get completed is the first benefit that…

In the United States life insurance market, a standard, non-forfeiture law exists, adopted in every state based on a model from the National Association for Insurance Commissioners (NAIC), which stipulates that should a cash value life policy lapse, the policy holder will not forfeit the policy value because of missed premium payments. It’s a consumer protection clause, designed to ensure that Americans don’t miss out on the cash surrender value of the policy due to being unable to pay the premiums for a couple of months (or just forgetting to do it). A certain part of the law was the…

Blockchain technology is all the rage, especially in the start-up and venture capital world, it’s apparent industry-agnostic applicability leading to billions of dollars of investment. In the life insurance and life settlement world, proponents argue that it can put all of the details about a life insurance policy in one place, eliminating the vast amounts of paperwork, both physical and digital, that prevail in the market today. So, this month, we asked Life Risk News’ readers their thoughts on whether blockchain technology will be fully embraced by the life settlement market in the United States. The results aren’t conclusive. Only…