Coventry: Flaws of Lapetus Life Expectancy Estimates Evaluated in New Study
Coventry has released a new study by Professors Daniel Bauer and Nan Zhu revealing significant flaws in Lapetus Solutions' life expectancy estimates. The study analyzed 4,378 underwritten reports and found that Lapetus substantially understates actual life expectancies of insureds, which could significantly impact life settlement investors.
The research showed that while Lapetus's calculations predicted 648 policyholder deaths during the study period, only 203 actual deaths occurred, resulting in a concerning 31% ratio of actual to expected deaths. This aligns with a July 2024 analysis showing Lapetus life expectancies were shorter by approximately 31 months compared to other underwriters.
The findings suggest that policies valued using Lapetus's estimates could be overvalued, potentially affecting companies like Abacus (NASDAQ: ABL) that rely on their life expectancy predictions for policy valuations.
Coventry ha pubblicato un nuovo studio dei professori Daniel Bauer e Nan Zhu che rivela significative lacune nelle stime di aspettativa di vita di Lapetus Solutions. Lo studio ha analizzato 4.378 rapporti assicurativi e ha scoperto che Lapetus sottovaluta sostanzialmente le reali aspettative di vita degli assicurati, il che potrebbe avere un impatto significativo sugli investitori in liquidazione di polizze vita.
La ricerca ha mostrato che mentre i calcoli di Lapetus prevedevano 648 decessi di assicurati durante il periodo di studio, si sono verificati solo 203 decessi reali, portando a un preoccupante rapporto del 31% tra decessi reali e attesi. Questo è in accordo con un'analisi di luglio 2024 che ha mostrato che le aspettative di vita di Lapetus erano più brevi di circa 31 mesi rispetto ad altri sottoscrittori.
I risultati suggeriscono che le polizze valutate utilizzando le stime di Lapetus potrebbero essere sopravvalutate, influenzando potenzialmente aziende come Abacus (NASDAQ: ABL) che si basano sulle loro previsioni di aspettativa di vita per le valutazioni delle polizze.
Coventry ha publicado un nuevo estudio de los profesores Daniel Bauer y Nan Zhu que revela fallas significativas en las estimaciones de esperanza de vida de Lapetus Solutions. El estudio analizó 4,378 informes asegurados y descubrió que Lapetus subestima de manera importante las expectativas de vida reales de los asegurados, lo que podría impactar significativamente a los inversores en liquidaciones de pólizas de vida.
La investigación mostró que, mientras que los cálculos de Lapetus predecían 648 muertes de póliza durante el período de estudio, solo ocurrieron 203 muertes reales, resultando en un preocupante ratio del 31% entre muertes reales y esperadas. Esto se alinea con un análisis de julio de 2024 que mostraba que las expectativas de vida de Lapetus eran más cortas en aproximadamente 31 meses en comparación con otros suscriptores.
Los hallazgos sugieren que las pólizas valoradas utilizando las estimaciones de Lapetus podrían estar sobrevaloradas, lo que podría afectar potencialmente a empresas como Abacus (NASDAQ: ABL) que dependen de sus predicciones de esperanza de vida para las valoraciones de pólizas.
코벤트리는 다니엘 바우어와 난 주 교수의 새로운 연구를 발표했으며, 이 연구는 라페투스 솔루션즈의 생명 기대 수명 추정치에 대한 심각한 결함을 드러냈습니다. 이 연구는 4,378개의 언더라이팅 보고서를 분석하였으며, 라페투스가 피보험자의 실제 기대 수명을 상당히 낮게 추정하고 있음을 발견했습니다. 이는 생명 보험 거래 투자자들에게 중대한 영향을 미칠 수 있습니다.
연구 결과 라페투스의 계산은 연구 기간 동안 648명의 보험 가입자 사망을 예측했지만 실제로는 203명이 사망했으며, 이는 실제 사망자와 예상 사망자 사이의 우려스러운 31% 비율을 나타냅니다. 이는 2024년 7월의 분석과 일치하며, 그 분석에 따르면 라페투스의 기대 수명은 다른 언더라이터에 비해 약 31개월 짧았습니다.
이 결과는 라페투스의 추정을 사용하여 평가된 보험이 과대평가될 수 있음을 시사하며, 이는 보험 가치 평가를 위해 생명 기대 수명 예측에 의존하는 아바쿠스 (NASDAQ: ABL)와 같은 기업에 잠재적으로 영향을 미칠 수 있습니다.
Coventry a publié une nouvelle étude des professeurs Daniel Bauer et Nan Zhu révélant des défauts significatifs dans les estimations d'espérance de vie de Lapetus Solutions. L'étude a analysé 4 378 rapports souscrits et a constaté que Lapetus sous-estime de manière substantielle les espérances de vie réelles des assurés, ce qui pourrait avoir un impact significatif sur les investisseurs dans les transactions d'assurance-vie.
La recherche a montré que, tandis que les calculs de Lapetus prédisent 648 décès de titulaires de police pendant la période d'étude, seuls 203 décès réels se sont produits, entraînant un ratio préoccupant de 31 % entre les décès réels et attendus. Cela correspond à une analyse de juillet 2024 montrant que les espérances de vie de Lapetus étaient plus courtes d'environ 31 mois par rapport à d'autres souscripteurs.
Les résultats suggèrent que les polices évaluées en utilisant les estimations de Lapetus pourraient être surévaluées, ce qui pourrait potentiellement affecter des entreprises comme Abacus (NASDAQ: ABL) qui s'appuient sur leurs prévisions d'espérance de vie pour les évaluations de polices.
Coventry hat eine neue Studie von Professores Daniel Bauer und Nan Zhu veröffentlicht, die bedeutende Mängel in den Lebenserwartungsschätzungen von Lapetus Solutions aufzeigt. Die Studie analysierte 4.378 unterzeichnete Berichte und stellte fest, dass Lapetus die tatsächlichen Lebenserwartungen der Versicherten erheblich unterschätzt, was sich erheblich auf die Investoren im Bereich Lebensversicherungsverkauf auswirken könnte.
Die Forschung zeigte, dass während Lapetus' Berechnungen 648 Sterbefälle von Policeninhabern während des Studienzeitraums vorhersagten, tatsächlich nur 203 Sterbefälle auftraten, was zu einem besorgniserregenden Verhältnis von 31% zwischen tatsächlichen und erwarteten Sterbefällen führte. Dies steht im Einklang mit einer Analyse aus dem Juli 2024, die zeigt, dass die Lebenserwartungen von Lapetus etwa 31 Monate kürzer waren als die anderer Underwriter.
Die Ergebnisse deuten darauf hin, dass Policen, die mit den Schätzungen von Lapetus bewertet wurden, überbewertet sein könnten, was potenziell Unternehmen wie Abacus (NASDAQ: ABL) betreffen könnte, die sich bei der Bewertung von Policen auf deren Lebenserwartungsprognosen stützen.
- None.
- Study reveals significant understatement of life expectancies by Lapetus
- Only 31% actual-to-expected death ratio (203 vs 648 predicted deaths)
- Life expectancies shorter by 31 months compared to other underwriters
- Risk of policy overvaluation affecting investors and companies using Lapetus data
Insights
The revealed flaws in Lapetus Solutions' life expectancy estimates present a material risk to Abacus Life's (ABL) business model and valuation. The study's finding of only a 31% actual-to-expected death ratio suggests systematic overvaluation of life settlement policies in portfolios using Lapetus estimates.
The financial implications are significant and multi-layered: First, overvalued policies mean ABL may have overpaid for acquisitions, potentially impacting their profit margins and return on investment. Second, with life expectancies understated by an average of 31 months, the company faces extended premium payment obligations that weren't properly factored into pricing models. This creates a cash flow burden that could materially affect profitability.
The market impact extends beyond immediate financial metrics. Portfolio valuations may require significant downward adjustments, potentially triggering:
- Balance sheet write-downs as fair value estimates are revised
- Higher capital requirements to maintain premium payments longer than projected
- Increased scrutiny from auditors and regulators regarding valuation methodologies
- Potential investor claims related to historical performance representations
This development could reshape industry dynamics, potentially benefiting competitors using alternative underwriting sources while creating headwinds for firms heavily reliant on Lapetus. The situation parallels historical challenges in the life settlement industry, where accurate life expectancy predictions have been important for proper asset valuation and risk management.
For investors, this raises serious questions about ABL's near-term earnings quality and long-term business sustainability. The company may need to:
- Revise its underwriting processes and valuation models
- Strengthen balance sheet reserves for extended premium obligations
- Potentially raise additional capital to address cash flow requirements
- Implement more conservative pricing strategies for future acquisitions
Understatement of Life Expectancies has Investment Implications
The study evaluates the accuracy of Lapetus's life expectancy estimates in accordance with the Actuarial Standard of Practice on Life Settlements Mortality (ASoP. 48). The study emerged from a discussion hosted by the Life Insurance Settlement Association, where Alan H. Buerger, Coventry’s Co-Founder and Executive Chairman, and Dr. Jay Olshansky, Co-Founder and Chief Scientist of Lapetus Solutions, exchanged insights. A recording of that discussion can be accessed at https://www.lisa.org/blog_home.asp?Display=25.
The analysis covered a total of 4,378 underwritten reports. Based on Lapetus’s calculated life expectancies, the study indicated that 648 deaths of policyholders should have occured in the relevant period. However, the actual number of reported deaths was just 203, resulting in an alarmingly low
To support their findings, Professors Bauer and Zhu conducted several robustness analyses, including comparing Lapetus’s own tables to several other tables in wide use. Across all analyses, the A/E Ratios consistently remained far below
In light of these results, Mr. Buerger emphasized the urgent need for Lapetus to reassess its mortality assumptions, underwriting models, and methodologies to provide more accurate life expectancy estimates. “This study confirms that Lapetus’s life expectancies are too short,” said Mr. Buerger. “When policies are valued based on life expectancies that are too short, the resulting policy valuations will be higher than they should be. Funds and companies like Abacus (NASDAQ: ABL) that rely on Lapetus to provide life expectancies for their policy valuations could soon face growing challenges with serious consequences for investors and the broader life settlement industry.”
The full study is available at coventry.com/research.
About Coventry
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. Our 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
For further information or to schedule an interview, please contact Brian Glicklich at Digital Strategy Ltd., Brian@DigitalStrategyLtd.com or 818-867-9096
View source version on businesswire.com: https://www.businesswire.com/news/home/20250210580721/en/
Brian Glicklich
Digital Strategy Ltd.
Brian@DigitalStrategyLtd.com
818-867-9096
Source: Coventry
FAQ
What are the main findings of the Coventry study on Lapetus life expectancy estimates?
How could Lapetus's underestimated life expectancies affect ABL stock and investors?
What is the difference between Lapetus estimates and other underwriters according to the July 2024 analysis?
How many underwritten reports were analyzed in the Coventry study of Lapetus estimates?
