|By Meg Green|
|A.M. Best Company, Inc.|
The first securitization of embedded value of life insurance since 2007 shows that "life is coming back to the market," said
"It offers an alternative source for Canadian life companies to add to their capital management strategies," Martin said. "But I wouldn't limit it to
More such securitizations are expected from all jurisdictions, Martin said.
"It's a very useful tool to help provide long-term funding for life insurance business," Martin said. "It's a good way of monetizing future profits. We see the potential for more transactions in the future."
The insurance-linked securities market became more challenging for all types of securitizations following the 2008 financial crisis, Martin said.
"It’s really great that another embedded value transaction has been done. It shows there is life coming back into the market," she said.
The transaction is sponsored by
Additionally, Aurigen has longer term plans to expand outside of
The securitization includes a single tranche. The notes are expected to mature in 6.25 years and have a coupon rate of 8%.
Principal repayment on the notes is linked to the future profits on 12 life reinsurance treaties, from six separate life insurance companies, written by
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