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The Actuary The magazine of the Institute & Faculty of Actuaries
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Securitisation

A Pricewaterhouse Coopers (PwC) report on securitisation in the insurance sector published in January showed that:

  • investors in life insurance securitisation have been attracted by competitive yields and the opportunity to diversify their asset-backed portfolio away from the current concentration on consumer credit;
  • the use of credit wraps backed by third-party guarantors is helping to limit risk to investors and enhance market confidence;
  • the development of securitisation is significantly increasing the life sector’s access to financial markets which may eventually create a liquid market in life portfolios; and
  • securitisation could potentially facilitate a fundamental shift in life insurance business models with manufacturers taking on the role of intermediaries that underwrite and package risks before transferring them to the financial markets.

More at www.pwc.com.