Make it your homepage |   E-mail: Subscribe Unsubscribe


Sunday, April 20, 2014
News Making Money

Life settlements are a win-win for consumers and investors

22/06/2013 11:10 (302 Day 04:37 minutes ago)

The FINANCIAL -- Americans who sold their unwanted life insurance policies, collectively received more than four times the amount they would have received had they surrendered them to their life insurance companies, according to powerful new research based on a study of more than 9,000 life insurance policies.

ADVERTISEMENT


“The evidence suggests that the life settlement market has helped significantly in enhancing the welfare of policy-owners who, instead of surrendering, sold their life insurance policies in the secondary market,” said Narayan Naik, Professor of Finance, London Business School.


The average expected return for qualified, institutional investors purchasing the large sample of life settlements was 12.5% per annum, which was 8.4% in excess of treasury yields, foudn the study. During recent years, the study found that the average expected return had risen substantially to 18.3% per annum in 2011, some 15.9% in excess of treasury yields.

As the expected return depends critically on the life expectancy of the insured, the independent and comprehensive study conducted sensitivity analysis. It found that even if you assumed life expectancy estimates had been understated by three years, investors purchasing this sample of life settlements could still have expected a positive return of 3.2% per annum.

Given the expected return and the fact that longevity risk is largely uncorrelated with other financial markets, Professor Naik’s concludes: “The life settlement option appears to be an interesting investment opportunity for institutional investors willing to include longevity risk in their portfolio and to commit capital for the medium term.”

“ELSA welcomes this groundbreaking research and the spirit of transparency and openness that lies behind it, and believes that further collaboration between the market and the academic community will help cement the industry’s growing reputation as a socially-responsible and financially-compelling alternative to traditional investment asset classes,” said Simon Erritt, Chair, ELSA.

 

 

Make Your Comment

Add NewSearchRSS
Only registered users and facebook social network members can write comments!

This text is replaced by the Flash movie.
This text is replaced by the Flash movie.
Politics
Parliament issues strong call for EU lobby transparency register to become mandatory

16/04/2014 16:53 (3 Day 22:54 minutes ago)

The FINANCIAL -- The report approved by MEPs gives an important signal to the European Commission that a far more ambitious approach is needed to secure genuine lobby transparency in the EU, according to EUbusiness Ltd.

Read more...



TRAVEL BIZ »
PRESS RELEASES »
FINANCIAL »
UKRAINE »
GEORGIA »
WORLD »
BANKS »
BUSINESS »
TECH »
MARKETS »
B SCHOOLS »
SPECIAL REPORTS »

Markets
Major Cloud Service Providers Slash Prices; Threaten Smaller Players’ Existence: IDC Warns

19/04/2014 13:40 (1 Day 02:07 minutes ago)

The FINANCIAL -- In the last week of March, major Cloud Service Providers (CSPs) in Asia dropped their prices for core services dramatically and IDC believes that this will make it very difficult for smaller CSPs to remain in business if they continue to rely on provision of basic, undifferentiated services, according to International Data Corporation (IDC).







Developed by Aleksandre Chiabrishvili

Design built by Creo Group