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Why should you consider Fasano Associates for your Life, Annuity, and Life Settlement Underwriting?
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See Who Will Be Speaking at The 2018 Fasano Conference
Listen to what People Say About The Fasano Conference
Controversial Presentations at Fasano Longevity Conference
Flawed Longevity Assumptions - James Rouse
Evaluating Life Expectancy Evaluations - Daniel Bauer, Michael V. Fasano, Jochen Russ & Nan Zhu
The quality of life expectancy estimates is one key consideration for an investor in life settlements. The predominant metric for assessing this quality is the so-called A-to-E ratio, which relies on a comparison of the actual to the predicted number of deaths. In this article, we explain key issues with this metric: In the short run, it is subject to estimation uncertainty for small and moderately sized portfolios; and, more critically, in the long run, it converges to 100% even if the underwriting is systematically biased. As an alternative, we propose and discuss a set of new metrics based on the difference in (temporary) life expectancies.We examine the underwriting quality of a leading U.S. life expectancy provider based on this new methodology.
Structured Settlement Underwriting Performance: Implications for Short Form Life Settlement Underwriting?
This month we are publishing Actual to Expected performance results for our Structured Settlement underwriting business. The results are good, with an Actual to Expected ratio of 98% for the 2012 through 2016 period, assuming IBNR of 7%. Without IBNR, the A to E ratio would be 91%.
But the real story here is not the results, but the learning curve behind the results. When we started underwriting structured settlements in 2007, our initial results were terrible. We were reviewing files with Attending Physician Statements (APSs) and Paramedical Exams, and our life expectancies were far too long. We learned that underwriting tools that worked for life insurance and life settlement underwriting do not work in the secondary market for structured settlements. The demographic of people wanting to convert their structured settlement annuity into a lump sum is different than that of the higher income life insurance and life settlement populations. First of all, the annuitants typically do not have a regular physician, but rather use the Emergency Room or a walk in clinic for their medical needs. So APSs do not provide the same meaningful underwriting information as they do in other insurance related markets. As important, the types of impairments this population have are frequently behavioral, such as incarceration histories and drug/alcohol abuse, and this information is often not picked up in APSs and paramedical exams.
So we developed a new, streamlined underwriting approach using a
Questionnaire targeted to the types of impairments found in the
Structured Settlement population, supplemented with prescription drug
reports, criminal/driving histories, and telephone interviews. I
think that the results speak for themselves. But
the real story here is that a streamlined, essentially short form
underwriting methodology can work. I
think a similar approach could be used for some life settlements; but to
be successful it is important to have practical experience and a proven
track record, not only in life settlements, but in applying short form
Fasano Associates - A Diversified Underwriting Organization
Fasano Associates is a diversified underwriting organization serving the life insurance, annuity/structured settlement, life settlement and related industries. We have chosen to diversify within the underwriting domain, which has allowed us to leverage our analytic strengths. We are not affiliated with a Provider, Broker or Third Party Administrator. We are not owned by outside investors. In short, we do not have any conflicts of interest that might adversely affect our client's position. CLICK HERE to view the entire article.
Fasano Discusses New Tools in Risk Analysis
Fasano Associates President, Mike Fasano, discusses the valuable
new medical information that will be available from wearable
devices, as well as possible underwriting applications for Big Data
Contingent Life – Structured Settlements - Fasano Associates Underwriting Methodology
Fasano Associates, a premier life expectancy provider in the life
settlement space, has developed a new proprietary mortality table
and underwriting methodology for the Life Contingent – Structured
Settlement business. View the video below; Fasano Associates
President, Michael Fasano, demonstrates and explains the ground
breaking underwriting enhancements that have improved life
expectancy predictions in the growing structured settlement market.
Continuity in Ownership and Management Supports Consistency and Accuracy in LE Estimates
Continuity in Ownership and Management Supports Consistency and
Accuracy in LE Estimates
New Methodology for Measuring Actual to Expected Accuracy Applied to Fasano Database
Drs. Daniel Bauer (Georgia State University) and Jochen Russ
(Institute for Actuarial Studies) presented a new methodology for
measuring Actual to Expected accuracy at the 9th Annual Fasano Life
Settlement & Longevity Conference. The new methodology, Difference
in Curtate Life Expectancy (DCLE), calculates the average difference
between the actual and expected number of months lived, and is less
biased than other methodologies. When applied to the entire Fasano
life settlement database, Fasano’s average difference
between actual and expected months of survival was less than
Poor Underwriting Practices Spark Life Settlement Losses
Rajiv Rebello, a fellow of the Society of Actuaries, a member of the
Academy and a Chartered Enterprise Risk Analyst, has written an article
titled "Poor Underwriting Practices Spark Life Settlement Losses". He is
a principal of Colva Insurance Services in San Diego. His email address
appears at the conclusion of the article. Mr. Rebello's comment
"Discounting historical results in favor of better expectations of
future mortality offer life settlement investors a false sense of
confidence in the accuracy of the underwriting", captures the essence of
today's industry discussion.
Click here to read entire article.
Michael Fasano authors chapter on life settlement underwriting
A Publication for Professional Traders and Institutional Investors.
LIFE MARKETS --- Trading Mortality and Longevity Risk with Life
Settlements and Linked Securities
Michael Fasano Adds Underwriting Expertise to New Book on Reverse Mortgages -- Pens Chapter Four on Underwriting Reverse Mortgages
An Institutional Investors Guide to the Burgeoning Field of Reverse Mortgage Securitization.
REVERSE MORTGAGES and LINKED SECURITIES: The Complete Guide to Risk,
Pricing, and Regulation by Vishaal B. Bhuyan is a collaborative effort
of many of the leading minds in the Home Equity Conversion Mortgages
(HECM) industry, including reverse mortgage lenders, institutional
investors, underwriters, attorneys and regulators.
ALEC - Fasano's Automated Life Expectancy Calculator
Developed to be used as a SCREENING TOOL for life settlement
acquisitions and to assist individuals in financial planning
applications. A "user friendly" tool that does not require the
assistance of underwriters OR other professionals to complete. Not
a replacement for the "real thing" BUT an inexpensive way to assess case
value - easy to use while providing good risk discrimination. To try
"ALEC", click on the link in the left sidebar.