Chuyun Guo, a Master of Science candidate in the Department of Mathematics and Statistics, will present her Masters Research Project (STAT 5P99) titled A Review of Life Insurance’s Secondary Market on Thursday, June 13, 2024 from 2:00 pm – 3:00 pm online on Microsoft Teams.

Students (both graduate and undergraduate) as well as other members of the Brock Community are invited to attend. If you are interested in the presentation, please contact Neil Marshall at nmarshall@brocku.ca for a link to the Team.

Abstract: The secondary market for life insurance policies emerged to provide financial relief for terminally ill patients through viatical settlements. It has expanded over time to include life settlements for seniors and individuals with chronic conditions, driven by demographic shifts and increased life expectancy. This market now plays a crucial role in financial planning, allowing policyholders to sell their life insurance policies for more than the cash surrender value. The study examines the historical evolution of the secondary market, the types of transactions, and the market dynamics. It explores the benefits and challenges for policyholders, insurance companies, and investors. While the market offers enhanced liquidity and fair compensation for policyholders, it also requires insurers to adjust premium structures and manage adverse selection. Investors gain high returns and diversification but face longevity risk, return volatility, and regulatory changes. The study highlights the complexities of asymmetric information and emphasizes the need for sophisticated actuarial models and robust regulatory frameworks to ensure market stability and sustainability.

Keywords: The Secondary Market for Life Insurance Policies, Life Settlement, Viatical Settlement, Asymmetric Information, Adverse Selection