Working in Tandem; the Long-Term Benefits of a Servicer and Provider Working Together in Managing a Life Settlement Portfolio
In the ever-evolving world of alternative and private investments, life settlements continue to gain traction among institutional, professional investors seeking uncorrelated returns. But while the asset class offers compelling opportunities, the complexity of managing a life settlement portfolio demands a nuanced approach. At the heart of sustainable performance lies a strategic partnership between two key players: the provider and the servicer.
When these entities operate in tandem — rather than in silos — the result is a more resilient, transparent, and efficient portfolio that benefits both the institutional capital allocator and the policyholder in equal measure, creating a true ‘win-win’ situation.
Benefits to the Insured
The main benefits to the insured are related to the improved peace of mind that an effective, integrated servicer-provider relationship provides.
Firstly, familiarity breeds comfort for the insured in the life settlement market. Servicers are tasked with contacting insureds on a quasi-regular basis to confirm that certain information is up to date and correct. Consumers are more likely to have a positive experience when the same company is contacting them over time, and in situations where the provider and servicer are related entities, this is often the same person. This provides for a quicker, smoother, more credible process for the insured over time; this also benefits the life settlement industry as a whole, as
Secondly, in states where life settlements is a regulated transaction – 43 of them at the time of publishing – providers must maintain a license to do business in these states. While servicing is not a regulated activity, there is still comfort to be found in the fact that the servicing team of a provider is part of a regulated entity, accountable to state insurance departments.
Lastly, a policy maturity is a stressful time for the relatives and friends of the deceased. The relationship built over time between the same servicing team member(s) and the insured and their family provides for a better understanding of the insured’s bigger picture, supporting conversations more tailored to the insured and their family.
Benefits to Institutional Investors
When providers and servicers work closely together from the beginning, data is more seamlessly transferred and maintained, reducing reconciliation issues, ensuring timely updates on insureds, and enhancing decision-making. Accurate and real-time data improves forecasting and premium optimization and provides for a more accurate net asset value, which in turn gives investors a more accurate view of the performance of the portfolio overall.
The provider-servicer tandem provides benefits to investors even before a policy enters the portfolio, however. Jointly managed workflows create stronger internal controls; with the provider sourcing policies under the same standards the servicer will later monitor, there is less room for error or misalignment. This reduces regulatory risk and creates a clearer audit trail — essential for institutional investors with fiduciary obligations.
Finally, a collaborative approach enables the servicer to build predictive models and conduct in-depth analytics using consistent sourcing data. This leads to better premium optimization strategies, more accurate life expectancy tracking, and ultimately, improved returns.
Conclusion
One of the features of the life settlement market that sets it apart from other alternative, private asset classes is the involvement of individual consumers at the transaction level. The process that begins with a consumer deciding to sell their life insurance policy does not end at the point of sale – often, there are years, and sometimes, decades worth of contact with consumers as part of the portfolio management process.
When providers and servicers work hand in hand, they don’t just create a better investment vehicle — they also build a more ethical, efficient, and human-centered market.
For institutional investors, this partnership may drive stronger returns and may drive stronger returns and lower risk. For consumers, it ensures dignity, fairness, and financial relief at a critical life stage.
In the long run, a provider and servicer working in tandem isn’t just best practice — it’s the foundation of a life settlement ecosystem that benefits everyone involved.
Bill Corry is Managing Partner at Corry Capital Advisors
