Life settlements and longevity structures: pricing and risk management

The life insurance industry is an old and established industry with over $4 trillion in policies outstanding and billions more coming on board every year. Like the MBS market the underlying security has little risk. Most life insurers have to have an investment grade rating in order to write insurance. In mostcases the carrier is a Standard and Poors A rated or higher carrier. In the US where most policies are purchased, 46 of the 50 states have an insurance fund backing the payout of any and all insurance. As a result the credit risk or risk of default on the payout is very low. Life Settlement Pools is comprehensive reference for investors and structurers looking to enter this rapidly expanding arena. With more than $4 trillion in policies outstanding, and billions coming on board every year, it has all the earmarks of becoming the next big asset class. The book begins by introducing readers to life insurance, focussing on the different sorts of policies available and to settlement policies before moving on to actuarial science, and in particular, life expectancy vs. mortality rates. The book then goes on to look at securitization and how to structure these products within a portfolio, and introduces the capital market products such as barrier bonds and equity linked notes and how readers can create securities with guaranteed payouts, no matter what the markets or other forces do. Life settlements are almost totally correlation free. Bonds with no principal payback or principal free mortgages are just a few of the products that can be structured - all with substantially higher returns than comparably rated securities. This book will enable practitioners to structure or securitize a product with little risk and substantial returns, and even guarantee payments of principal of the underlying security and is sure to become a definitive texton the topic.

• ISBN: 978-0-470-74194-8
• Editorial: John Wiley & Sons
• Encuadernacion: Cartoné
• Páginas: 280
• Fecha Publicación: 05/06/2009
• Nº Volúmenes: 1
• Idioma: Inglés