In recent years Lifetime Mortgages have become an important part of the investment strategy for a number of UK insurers writing annuity business.
The economic crisis may have strengthened the case for alternative assets such as equity release, by highlighting how highly correlated traditional markets such as bonds and equities are in adverse scenarios.
In recent months the Solvency II process (in particular the debate around the Matching Adjustment) has also brought the equity release asset to the attention of a wider audience, who may have previously been less familiar with the asset.
Against this background, the Equity Release Member Interest group has taken a look at why Lifetime Mortgages remain a good and appropriate investment for life companies with annuity liabilities.
This MIG disbanded in 2016 due to the IFoA Life Board setting up an Equity Release Mortgages Working Party to undertake member-led research in this area.
- Lifetime mortgages - an appropriate investment for life companies with annuity liabilities?
- Life Conference 2013: Equity release - why it remains a solid investment in Europe's turbulent economy
- Pricing and risk capital in the equity release market [pdf] Sessional meeting, Oct 2007
- Regulation of reversions and Ijara financing. HMT Consultation. Response from the Actuarial Profession. Jun 2006
- Equity Release Report, Volume 1: Main Report, 2005 [pdf]
- Equity Release Report, Volume 2: Technical supplement on pricing considerations, 2005[pdf]
- First Report on Equity Release Mechanisms, 2001 [pdf]
- 16 June 2020
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In April 2021, the CMI Assurances Committee published Working Paper 150, as a consultation on the proposed “16” Series tables for mortality (including terminal illness) and for accelerated critical illness under non-rated term assurance policies, based on 2015-2018 data. This webinar will provide an overview of the dataset, describe the methodology used to produce the tables, and explore additional analysis of the tables.
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