"Pricing and Risk Capital in the Equity Release Market" - Report of the Institute Equity Release Working Party

The UK equity release market is one of the more mature markets in Europe.  Over the last number of years while equity release sales have levelled off in the UK, margins have become tighter and it is increasingly difficult for providers to reach target returns on capital and this is deterring new entrants.   The recent "credit crunch" has exacerbated this.  

The purpose of this presentation is to summarise the conclusions of the paper and  

- Investigate a suitable "average" pricing basis for this product.

- Determine a methodology for pricing this product (including the cost of the dreaded "no negative equity guarantee") 

- Estimate the level of profitability of these products in the market

And therefore assist providers in the market (whether they be banks, reinsurers, life insurers and mortgage providers) to assess their own risk and returns in the marketplace now and in the future