Life settlements

A group of insurance companies mainly based in OECD countries and specializing in developing and marketing life insurance and retirement pension products, our Clients, wanted to consider possible solutions for modifying the time distribution of cash-flows associated to their insurance products. In essence, our Clients wanted to manage proactively the portfolio of insurance policies in order to free-up cash at specific moments in time. Since insurance policies of that nature can have significant implications from the tax standpoint, the option of straight securitization appeared too expensive to executive managers of our Clients. Therefore, they turned to WCA to examine options for structuring their long-term financial resources optimally.

The insurance business has been facing deep and sometimes violent changes since the early years of this century, with impacts from terrorist events and financial turmoil dealing strong blows to insurance and reinsurance companies worldwide. Furthermore as the financial and sovereign crises unfolded, Western governments became very wary of financial operations that could result in reduced tax income to public finances. As usual the broader context had to be factored into the process of setting-up and delivering a tailored scheme for achieving the intended goals, while always complying with all applicable laws and regulations.

WCA tapped its network of experts in various markets where the Clients were present to examine under which circumstances future cash-flows stemming from the existence of a portfolio of insurance policies could be packaged and converted into long-term financial resources made available to WCA’s Clients at their preferred time horizon. This endeavor resulted in a 220 m€ deal involving a public offering operation through which future cash-flows were transformed into financial resources available earlier.

WCA delivered financial engineering services, general coordination, access to its extensive business network and overall management of a combined operation of private placement and public offering.