Life settlements – too good to be true?
Life settlements have been a controversial sector of the insurance-linked securities market for the past decade, but with a series of swap and note-based products now being marketed at pension fund investors, has this asset class come of age? Aaron Woolner reports
Claims that life settlements – US whole life policies traded on the secondary market – are an asset class (almost) entirely uncorrelated with the broader financial markets, and provide annual rates of return that some claim can touch 20%, against a volatility of 5%, sound too good to be true. And according to Peter Smith, head of investments policy at the UK Financial Services Authority's (FSA) conduct policy division, they most probably are.
Speaking at a life settlements conference earlier
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