Found these articles entertaining, Apollo allegedly held a portfolio of stranger's life insurance policies worth an estimated $20 billion.
https://www.bloomberg.com/news/articles/2024-04-2…
https://www.bnnbloomberg.ca/apollo-accused-in-law…
First they came for their associates' souls, now they're after your life hahahaha....
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A little sensationalist wording -- this isn't a new industry. It was unclear if they were originating policy's without the underlying person's consent or not. If they had it, I'm not sure how this is different than secondary sales of life insurance policies that is not a novel thing.
Agree on the sensationalist wording, meant to add that into my description after reading the articles. Can't really opine though given I have no idea how U.S. insurance law works.
Yeah I learned about an investment strategy where investment managers buy a portfolio of insurance contracts from individuals recently. I guess you can cash out your contract and have an investment company buy it. Definitely a bit of a questionable strategy given you want the contracts to pay out sooner rather than later…
Typically this happens when people are already near the end of their life. It was a big thing during the AIDS epidemic for those dying of AIDS to cash out their policy early so they could have a higher quality of life/care while they were still living since they had no one to pass the money on to.
I do wonder how Apollo is making money on it. My understanding is that if you buy a policy from an individual, then you are buying at a discount value (cost of liquidity to the individual). However, if Apollo is taking out new policies on people (as the article implies), then they do not get the benefit of the discount and it seems like are basically just betting against the insurco actuary/betting that the insurance policies are mispriced. I know Apollo is heavily involved in insurance, but it still seems like a tough investment strategy unless I am missing something.
The issue is that they have hospitals and perhaps other medical portfolio companies, so they have an edge on who they should take these policies out on.
This is sensationalist… it’s effectively just a life insurance strategy run by a firm that does a ton of insurance. To insinuate someone working in healthcare would cut someone’s life short because they work at a company owned by Apollo seems crazy to me… also, how is a strategy you can easily find on Pitchbook secretive? First vintage of Apollo FCI was in 2012… very easy to find.
I don’t and have never worked at Apollo but heard about this strategy like 6 years ago. I haven’t read all the details of why people are making a fuss now but had to stop reading after all the ridiculous secretive and gambling claims. The older I get, the more I realize how naive a lot of people are to the world around them and easily upset.
Are we going to start calling home flood insurance policies secretive gambling on weather patterns?
Yeah probably lmao. Whatever it takes to sell more subscriptions and ad space.
Just wait until people learn about ILS/cat bonds
How are those worse?
I don’t think they are, I was being sarcastic.
They just sound spooky to people that haven’t heard of them before.
I get it you are being facetious, but I am now studying for the CFA L3 and life policy trading is included in the curriculum as a germane HF strategy. $20bn dedicated to this is certainly brazen though
Are you familiar with Gogol's Dead Souls? This is quite a perennial scheme
Gogol
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