At a time when merger and acquisition is moving up the life insurance agenda, securitisation could prove especially valuable as a source of funding and a useful means to enhance capital flexibility, or reduce the cost of capital. The success of recent placements has significantly increased the profile of these transactions in the market. The opportunity exists for forward thinking life insurers to take advantage, and for PwC to advise them through the process.
This paper (the second in the focus on restructuring series) discusses these opportunities covering the range of actuarial, regulatory and other financial matters as well as some of the potential pitfalls, including what can be learned from recent transactions. It draws on the authors’ research and PwC’s global experience in life insurance securitisations, as well as discussions held with a number of professionals at investment banks.
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