Improving Models

The use of actuarial data has rightly been the cornerstone of the Life Settlements industry. Companies have spent time focusing on developing these mathematical and actuarial structures so that they increasingly become more complex and better able to deal with the intricate nature of what they are examining. Although the actuarial tables are regularly reviewed it is only right that on top of this the individual organizations take responsibility for developing and updating their own approaches to meet market needs.

But are there ultimately boundaries to the ability of mathematical models to map out the unpredictable area of life expectancy?

The current saturation of policies in the tertiary market presents a strong case for the use of additional medical review of policies when considering a Life Settlements structure or investment into portfolios or individually originated policies. This is what has led Wharton Advisors Corp. to create the Wharton Medical Summation. Life expectancy models by their very nature are backward looking from the moment they are created, and therefore it seems logical that developments occur as time passes by. For this very reason an independent team of medical experts screen each policy that Wharton considers to see if medical expertise can provide accurate assessment of the data set used in the model through understanding of new medical theories, non common symptoms and more. This enables Wharton to determine if a valuation and longevity arbitrage exists when selecting a policy.

We think that this is a critical consideration for institutional participants in the life contingent asset space to ensure that the status quo is continuously developed and new standards of policy assessment are implemented to meet the demands of this growing market.


Wharton Advisors Corp. Updates

  • Improving Models

    The use of actuarial data has rightly been the cornerstone of the Life Settlements industry.

    Read more

  • Longevity Protection: Bringing the Life Settlement Market into the 21st Century.

    The Life Settlement Market had seen exponential growth over the last 15 years

    Read more

  • Life Settlements – Is the Market Dying?

    The recent deal for Fortress Investment Group securing the $6.2bn portfolio of distressed assets from KBC Financial Products was the major deal in the market of this year.

    Read more