Coventry Releases Peer Review of Lapetus Life Expectancy Study

July 22, 2024 at 11:34 AM EDT

Coventry today released an independent, academic peer review confirming the results of an internal analysis of life expectancy estimates issued by leading life expectancy providers. That analysis found that estimates issued by Lapetus Solutions, Inc. are consistently the shortest by a wide margin—meaning that valuations based on Lapetus life expectancies could lead to significantly inflated asset values and investor losses.

The review of the Coventry findings was conducted by Daniel Bauer, Professor of Risk and Insurance and Hickman-Larson Chair in Actuarial Science, Wisconsin School of Business, University of Wisconsin-Madison (https://business.wisc.edu/directory/profile/daniel-bauer/); and Nan Zhu, Associate Professor of Risk Management, Smeal College of Business, Pennsylvania State University (https://directory.smeal.psu.edu/nxz24).

The original study compared Lapetus with life expectancies on the same insureds that other LE providers issued within three months of the Lapetus reports. The study determined that Lapetus life expectancies were shorter in approximately 85% of the cases by an average of around two-and-a-half years, a substantial gap in the elderly life settlement population. The Bauer/Zhu peer review confirmed these results by replicating the Coventry study.

The professors also conducted two additional studies. Drs. Bauer and Zhu explained, “Our comprehensive review started by independently reproducing the results of the Coventry study, which our analysis validated. We then conducted two additional reviews that also supported the original findings. The first complementary review looked at the LE differences based on age cohorts. We observed that the percentage where Lapetus is shorter is consistently high and ranges from 78% to 89%. In the second supplementary analysis, we removed the three-month window restriction and adjusted the life expectancies to factor in the timing of the report dates, allowing us to utilize more comparisons. The results of the second study were also consistent. The Lapetus LE was shorter in approximately 83% of all cases by an average of approximately 29 months.”

“By testing Coventry’s conclusions and doing their own studies, Drs. Bauer and Zhu have performed a valuable service to our industry,” said Alan Buerger, Coventry’s Executive Chairman. “The health and integrity of the life settlement market depends on having credible life expectancies that investors can use with confidence.”

The review, as well as Coventry’s original study, are available at coventry.com/research.

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 $5.4 billion to policyowners who no longer need their policies. To learn more about Coventry, please visit coventry.com.

For further information or to schedule an interview, please contact Brian Glicklich at Digital Strategy Ltd., Brian@DigitalStrategyLtd.com or 818-867-9096