Coventry Study Finds Lapetus Life Expectancies Are Shorter Than Competitors in 85% of Cases Reviewed
May 08 2024 - 11:10AM
Business Wire
Coventry today released the results of an internal review that
found life expectancy estimates issued by Lapetus Solutions, Inc.
are consistently and materially shorter than those issued by other
life expectancy providers, potentially leading to the overvaluation
of life insurance policies and investor losses. The results cast
doubt on the accuracy of asset valuations based primarily on
Lapetus life expectancies.
After reviewing thousands of Lapetus life expectancy estimates,
Coventry found that they are shorter than other leading life
expectancy providers 85% of the time when comparing the same
individuals. This suggests that their use of a general population
base mortality table (rather than an insured population base
mortality table) for life settlement underwriting contributes to
their significantly shorter life expectancy estimates. A general
population table is typically not used for these valuations because
insured individuals over 65—those underwritten in any life
settlement transaction—have average life expectancies more than
three years longer than the general population. Study details are
available at: coventry.com/research.
Coventry believes the impact on investors could be substantial
and highly consequential. The insured’s life expectancy is the
single most important factor when determining the value of a life
settlement.
When inaccurately short life expectancies cause such assets to
be overvalued, it sets the stage for liquidity issues and potential
investor losses. Indeed, there are numerous examples of significant
life settlement losses arising from faulty life expectancies.
“It is essential for the integrity of the market and the welfare
of investors that life expectancy providers use best practices and
issue reliable estimates,” said Alan Buerger, Coventry’s Executive
Chairman. “As a licensed life settlement provider, we are committed
to upholding industry regulations and guidelines to maintain
credibility and protect stakeholders.”
Coventry is the leader and creator of the secondary market for
life insurance. For more than 25 years, we have been driving the
industry forward and expanding opportunities for life insurance
policyowners. Coventry’s deep experience combined with a fierce
commitment to consumer rights makes Coventry the clear market
leader, a position we use to raise industry standards and expand
consumer choice. To date, we have delivered more than $5.4 billion
to policyowners who no longer need their policies. To learn more
about Coventry, please visit Coventry.com.
For further information or to schedule an interview, please
contact Brian Glicklich at Digital Strategy Ltd.,
Brian@DigitalStrategyLtd.com or 818-867-9096
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Brian Glicklich Digital Strategy Ltd.
Brian@DigitalStrategyLtd.com 818-867-9096