Author: Greg Winterton

In September, the US Federal Reserve maintained interest rates at 5.5%, the first pause in what has been a rising rate environment since early 2022. Similarly, the Bank of England kept its interest rate at 5.25%, the first time since 2021 that the rate had paused.  So, in October, we asked our readers whether they thought that this marked the end of the recent rising interest rate environment.   In a rare turn of events, Life Risk News readers were split; 42.1% said they thought that the rising rate environment had now seen its peak, and 42.1% said that there were…

A recent report published by asset manager Conning suggests that the life settlement industry is poised for continued growth in the coming years. Life Risk News’ Greg Winterton spoke to Rob Haynie, Managing Director at life settlements broker Life Insurance Settlements, Inc, to get his views on how the life settlement market has done in 2023 and what his expectations are for 2024.  GW: Rob, let’s start with 2023. At the end of last year, you told Life Risk News that you expected the main reasons why seniors look to sell their policies to be covering medical bills and simply…

Deal flow in the life settlement industry’s secondary market can be separated into two main channels – the direct-to-consumer market, where insureds sell their policies to a licensed life settlement provider, perhaps because they have seen or heard TV or radio advertising – and the intermediated channel, where life insurance agents, accountants, attorneys and wealth managers work with their client to sell their policy via a licensed life settlement broker.  In the intermediated channel, deal flow from the wealth manager – registered investment adviser (RIAs) – cohort is on the rise. And the increased activity is coming from what is,…

The rising interest rate environment of the past 18 months has had a significant impact on the alternative investment industry, with fundraising across all the main segments – hedge funds, private equity, private debt, real assets – falling in 2022 and then again this year as global capital allocators pivot to assets that are perceived as having lower risk, higher liquidity and now, for the first time in more than a decade, an acceptable yield.  The impact has certainly been felt in the life settlement market.  “You can get a four-week US treasury bill for around 5% at the moment,”…

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…