Author: Greg Winterton

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…

The Traded Endowment Policy Market in the United Kingdom is slowly coming to an end. Changes to taxation of these policies means that investors shied away and coupled with insurance companies writing less of these policies over time, means that what was once a robust secondary life market in the U.K. is no more. Life Risk News spoke to Roger Lawrence, Managing Director of WL Consulting, to learn more about the industry’s demise. LRN: Roger, 2022 marks the maturity of endowment policies sold in 1997, the final year that these policies were written; it spells the end of a market…

The pension risk transfer sector is heating up; according to Risk Transfer Report 2022, from consulting firm Hymans Robertson, the past four years have provided the biggest years yet for buy-in and buy-out volumes in the United Kingdom, the space’s largest market. Where insurance companies lead, reinsurance companies follow. Consequently, the funded reinsurance market – where insurance companies turn to manage risk they absorb on completion of these pension risk transfer deals – is on a similar tear. “Demand from the U.K. pension risk transfer market in particular is driving growth in funded reinsurance,” said Rohit Mathur, Head of International…

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

The life risk investment market ultimately comes down to two sides of the same coin: longevity risk and mortality risk. Holding both risks in a portfolio simultaneously are something of a natural hedge, like an equity hedge fund manager maintaining both long and short positions in public equity markets or a credit hedge fund taking long and short positions across the yield curve. There aren’t many similarities between public equities, government bonds and life risk. However, managers of life risk strategies take similar approaches to portfolio construction as equity and credit hedge fund managers do – namely, additional layers of…

Life Settlements industry publication The Life Settlements Report, part of The Deal, publishes data each year on the size of the secondary market in life settlements, where individual policies are purchased by investors from the original owner through intermediaries. Much of the data comes from freedom of information requests to state insurers, and only a small percentage is contributed directly by providers. Unfortunately, little to no data exists about the industry’s tertiary market, where life settlements are traded both individually and in blocks between investors; investment managers are not under any obligation to disclose their activity in this market. But…

The United Kingdom has the most active pension risk transfer market but despite it being more than a decade old, growth has been slow. We recently looked at a development in the U.K.’s pensions industry which could expand the market, so this month we wanted to see whether our readers felt that growth was indeed likely to accelerate. The results aren’t definitive. Whilst 58.8% think there will be an increase, 35.3% think activity will stay roughly the same. There could be many reasons for this, but two impediments to growth are a lack of talent and experience (from a number’s…