Blockchain technology investment continues apace. According to GlobalData, venture capital investments in the blockchain sector increased from $2.1bn in 2020 to $14.8bn in 2021. This year looks set to set a record yet again. The life settlement market is not typically associated with cutting-edge…anything. It’s an industry that is still ‘paperwork’ intensive – buyers of life settlements need medical records from (often multiple) doctors, it’s a heavily intermediated…
Insurers are favouring funded re as it helps firms manage the market and longevity risks associated with writing bulk purchase annuity (BPA) business by reducing capital charges and therefore making PRT deals more competitive.
Unsurprisingly, given its growth and potential for capital optimisation, UK regulators have been carefully watching the increased use of funded re. In June 2023, the Prudential Regulatory Authority (PRA) sent a “Dear CRO’ letter to heads of risk at UK life insurers.
The letter outlined the regulator’s two main concerns from a sectoral review which it had carried out.
“One of the key risks arising in funded re is that firms recapture sub-optimal portfolios with depressed values and with limited ability to be transformed effectively to the firms’ preferred portfolio,” the PRA letter said.
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