Author: Greg Winterton

Life Risk News UK Pension Risk Transfer Consultants roundtable

The secondary market in life settlements comprises mainly two channels – an intermediary-based one, and the direct-to-consumer one. The former has been, for many years, the larger of the two, as American seniors worked with brokers to sell their life insurance policy to a third- party investor.  But the D2C channel has been growing its share of the pie in recent years, and as baby boomers have aged into the life settlement market – those aged 70 and above – as has the importance of internet advertising in the D2C channel.  For July’s poll, we asked our readers whether they…

Life settlement investor Corry Capital Advisors manages more than $2bn in assets and counts pension plans, foundations, endowments, and sovereign wealth funds amongst its clients. Greg Winterton spoke to William Corry, Founder and Managing Director at Corry Capital Advisors, to get his views on the industry, and to learn more about the firm and its approach.  GW: Bill, a lot has been made of the impact of higher interest rates on investor appetite for life settlements, but there’s some cyclicality here, isn’t there? Are there any reasons why investors should still be allocating now versus waiting for rates to plateau,…

The life settlement market is regulated in 43 US states – Alabama, Missouri, South Carolina, South Dakota, Wyoming being the naysayers (Michigan and New Mexico regulate viatical settlements but not life settlements) – and each state follows one of two model acts, NCOIL or NAIC, or a hybrid of both.  Regardless of the model used by a state that regulates the industry, two commonalities are that a licensed life settlement provider must be the purchaser of the life insurance policy from the original owner (often, but not always, the insured), and, when a consumer works with a broker to sell…

The life settlement market has undertaken significant efforts in recent years to improve what it considers to be an awareness challenge in terms of the general senior population in the US not always being aware that they can sell their life insurance policy for a lump sum. The direct-to-consumer market, for example, is proving effective at generating more enquiries not only from the insured, but also from their advisors, like accountants, lawyers, and wealth managers. The equity release market in the UK has a similar challenge. Unlike life settlements, where the capital comes largely from investment fund managers, the money…

The life ILS market, like many alternative credit strategies, is facing challenges from the rising interest rate environment not only in terms of investor appetite but in terms of deal activity, as higher risk-free rates impact the extent to which life insurers can transfer risk to life ILS investors. But, like other life risk markets, it’s also facing challenges from changing mortality trends in terms of modelling that risk. So, for this month’s poll, we asked our readers which of the two was the more prevalent. And the results were clear. The need for higher deal flow was the landslide…

The subject of enhanced cash surrender value offers (ECSVOs) made by life insurance companies in the United States during the past few years has caused a great deal of chagrin amongst those in the life settlement industry. Greg Winterton spoke to Nat Shapo, Partner at law firm Katten Muchin Rosenman, to get his views on the issue. GW: Nat, for those who might not be too familiar with ECSVOs, tell us what they are. NS: A few life insurers are making limited-time offers, by endorsements created many years after the creation of the policy form and the issuance of the…

The growth in the UK pension risk transfer (PRT) market in the past few years has been accelerated by the recent rises in interest rates, the effect of which has been an increase in many defined benefit pension funds’ balance sheet readiness for a buy-out or buy-in solution. On the surface, seeing a significant growth in deals is music to the ears of the ecosystem at large; an array of lawyers, salespeople, actuaries and analysts. But underneath the headline numbers lurks a formidable obstacle – that of a lack of people power to absorb the glut of work. “The real…

In 1983, the UK government introduced the mortgage interest relief at source (MIRAS) program, which was designed to encourage homeownership in the country by offering borrowers tax relief on interest payments on their mortgage. Albeit circuitously, this policy paved the way for what followed; the Traded Endowment Policy (TEP) market, where individual policyowners could sell their policy on the secondary market to a third-party investor. Thus, the first substantial secondary life market was born. The sale of mortgage endowments in the UK eventually became something of a consumer – and therefore political – hot topic, however, as it became clear…

A significant percentage of deal activity in the life ILS market consists of ‘value in force’ (VIF) transactions; the life ILS fund lends money to life insurance companies, with the collateral being the premium payments of a block of policies. One impact of the higher interest rate environment on both sides of the Atlantic is that deal activity in the VIF space is, currently, subdued when compared to previous years when lower interest rate regimes were more normal. The reason is clear; higher risk-free rates trickle down into the alternative financing market. “Counterparties have much higher costs of financing now.…