ISC Services Chief Development Officer, Chris Conway, has recently joined the Executive Board of industry group, the European Life Settlement Association (ELSA). Greg Winterton spoke to Conway to get his thoughts on the current state of the life settlement market and what his hopes are for 2024.
GW: Chris, let’s start with something of a retrospective. How would you describe how 2023 has been for the life settlement industry overall and why?
CC: My sense of the market is that it is continuing to grow, albeit slowly, due to the recent, significant rise in interest rates, which makes raising capital more challenging than has been the case in the past twenty years. Of course, the perennial issues associated with the lack of awareness among American consumers as to selling their unwanted or unneeded policies, the degree to which the efficiencies that should have been employed by the market in terms of technology that is available and legal but grossly underutilised, and the still pervasive efforts on the part of carriers to impede that growth in various ways, are challenges. Fortunately, the market not only continues to persist, but it appears to me to be re-tooling its appeal in the current economic environment to remain an attractive alternative to capital markets all over the world.
GW: When we spoke in July 2022, you said that you feel that the end investor doesn’t get into the weeds of the life expectancy underwriting part of the industry during their due diligence efforts as much as you think they should. Is that still the case? If so, is there anything that can be done about it?
CC: The number of firms approaching us to conduct formal due diligence hasn’t changed since our last conversation. I don’t know if that’s true for our competitors, but I suspect, for the most part, it is. It also seems as though there are more internal underwriting resources, meaning for most participants, an individual or two with some form of underwriting or medical background in more places. However, how these personnel are applied is difficult to discern, as is the degree to which they are specifically trained to conduct the underwriting employed by the commercial life expectancy firms. I do think more due diligence should be done directly with the commercial companies, including ours, but perhaps there are reasons I’ve yet to hear as to why the few exercises of this sort that are conducted occur after significant sums have already been invested. Having said all this, ours is a very difficult activity to get a firm handle on, and the adage ‘it’s an art and a science,’ still holds true.
GW: Back in September, you joined the Executive Board of ELSA. You have also served as the Chair of the Life Insurance Settlement Association (LISA) a few years ago. What knowledge from your time at LISA will you be bringing to ELSA?
CC: I hope I am able to contribute to ELSA by bringing my understanding of the different sectors of the marketplace LISA serves, such as the broker community, as well as some ability to liaise between the two groups. I also think there may be a growing need for an increasing degree of legislative and regulatory advocacy work to be conducted in the US and I hope I can assist ELSA’s members to understand and support such efforts for the benefit of the global marketplace. I also see ELSA as being a likely gateway for the entry of market participants from outside Europe, and to the degree I am able, I would like to serve as an additional emissary for these parties when they engage with LISA to help them understand the different nature and purpose of both associations and their complementary strengths that support the industry.
GW: Is there anything in particular that you are keen to be more involved in during the three years that you’ll be on the ELSA Executive Board?
CC: As you know, I am generally inclined to volunteer for nearly anything that has the potential to develop, support and further demonstrate the value and legitimacy of the marketplace. ELSA’s more broad view of ‘life risk’ is something I need to engage with more fully and I am eager to find ways to not only understand the larger space more broadly but also to try and engage similar parties operating in other markets, both in the US and abroad. I also hope to continue work with Life Risk News, which it has been a sincere pleasure to be a part of.
GW: Finishing up with something of an outlook question, Chris. Fast forward to this time next year. What needs to happen in 2024 for the life settlement industry to consider it a good year?
CC: I think if we can successfully make the case that the life risk asset class, and life settlements in particular, properly managed of course, offers attractive features and benefits regardless of the macro-economic environment du jour, and in so doing continue to attract capital from around the globe, we should consider it a win. Given how small an industry life settlements still is, and with the world as it is currently, from a variety of perspectives, I’d be happy to see us continue on our present path, and re-demonstrate the persistence of a good idea that’s still a bit too much of a secret. In short, every year we endure we grow, and I expect that trend to continue.
Chris Conway is Chief Development Officer at ISC Services
