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03 February 2020

Zurich Round Table January 2020

The annual AA-Partners' Life Settlement roundtable took place in Zurich this week, at the prestigious Metropol venue in the city centre. The event is a platform for existing and potential investors to meet market experts and learn about the latest developments in the Life Settlement industry. 

Of particular focus at this year's event was the importance of increasing transparency and raising standards within the industry, to provide investors with better information on the key drivers of performance.

The panel, moderated by Prof. Dr. Alexander Braun (University of St. Gallen), highlighted a number of key metrics that managers of Life Settlement investments should be publicising to aid investor assessment on the credibility of their quoted performance. These included:

  • Evidencing mark to market valuations - especially for open ended life settlement vehicles where it's essential investors entering and leaving the fund do so on a fair basis. However, also essential for closed ended investments where liquidity is provided through trading on an exchange, and in the years leading up to the end of the investment term when the remaining portfolio will need to be liquidated.
  • Regular updating of Life Expectancy (LE) reports for the portfolio, and correct actuarial treatment of adjustments to LE estimates in the portfolio over time. This is essential to ensure that the latest health status of lives assured are reflected in the market valuation.
  • Publication of regular portfolio performance statistics such as "Actual to Expected" (A/E) analysis, and attribution of performance between realised (i.e. maturities and sales) and unrealised events (model valuation gains). 

The themes within this panel session reflected many elements contained within the current European Life Settlement Association (ELSA) Code of Practice. A set of standards adhered to by the best-in-class Product Designers, Managers and Distributors within the industry.

Alec Taylor, Marketing and Relationship Director at SL Investment Management and a previous Chair of ELSA said, "It's great that these themes continue to be profiled within key industry forums such as the AAP Round table.

"As a founding member of ELSA in 2009, SL has been at the forefront of driving forward transparency and standards within the Life Settlement industry. However, it's incredibly frustrating that many players in the market continue to disregard such standards, and we continue to have concerns that the long term outcomes for investors in such products may not meet with their expectations."

For more information please contact Alec Taylor Marketing & Relationship Director at SL Investment Management.