The secondary market for life insurance policies in the United States market evolution and product valuation

In this work we discuss the secondary market for life insurance policies in the United States of America. First, we give an overview of the life settlement market: how it came into existence, its growth prospects and the ethical issues it arises. Secondly, we discuss the characteristics of the different life insurance products present in the market and describe how life settlements are originated. Life settlement transactions tend to be long and complex transactions that require the involvement of a number of parties. Also, a direct investment into life insurance policies is fraught with a number of practical issues and entails risks that are not directly related to longevity. This may reduce the efficiency of a direct investment in physical policies. For these reasons, a synthetic longevity market has evolved. The number of parties involved in a synthetic longevity transaction is typically smaller and the broker-dealer transferring the longevity exposure will be retaining most or all of the risks a physical investment entails. Finally, we describe the main methods used in the market to evaluate life settlement investments and the role of life expectancy providers.

Understanding block rotation of strike-slip fault zones: Paleomagnetic and structural approach

This thesis is focused on the paleomagnetic rotation pattern inside the deforming zone of strike-slip faults, and the kinematics and geodynamics describing it. The paleomagnetic investigation carried out along both the LOFZ and the fore-arc sliver (38º-42ºS, southern Chile) revealed an asymmetric rotation pattern. East of the LOFZ and adjacent to it, rotations are up to 170° clockwise (CW) and fade out ~10 km east of fault. West of the LOFZ at 42ºS (Chiloé Island) and around 39°S (Villarrica domain) systematic CCW rotations have been observed, while at 40°-41°S (Ranco-Osorno domain) and adjacent to the LOFZ CW rotations reach up to 136° before evolving to CCW rotations at ~30 km from the fault. These data suggest a directed relation with subduction interface plate coupling. Zones of high coupling yield to a wide deforming zone (~30 km) west of the LOFZ characterized by CW rotations. Low coupling implies a weak LOFZ and a fore-arc dominated by CCW rotations related to NW-sinistral fault kinematics. The rotation pattern is consistent with a quasi-continuous crust kinematics. However, it seems unlikely that the lower crust flux can control block rotation in the upper crust, considering the cold and thick fore-arc crust. I suggest that rotations are consequence of forces applied directly on both the block edges and along the main fault, within the upper crust. Farther south, at the Austral Andes (54°S) I measured the anisotropy of magnetic susceptibility (AMS) of 22 Upper Cretaceous to Upper Eocene sites from the Magallanes fold-thrust belt internal domains. The data document continuous compression from the Early Cretaceous until the Late Oligocene. AMS data also show that the tectonic inversion of Jurassic extensional faults during the Late Cretaceous compressive phase may have controlled the Cenozoic kinematic evolution of the Magallanes fold-thrust belt, yielding slip partitioning.

Essays on Unemployment Insurance

Can the potential availability of unemployment insurance (UI) affect the behavior of employed workers and the duration of their employment spells? After discussing few straightforward reasons why UI may affect employment duration, I apply a regression kink design (RKD) to address this question using linked employer-employee data from the Brazilian labor market. Exploiting the UI schedule, I find that potential benefit level significantly affects the duration of employment spells. This effect is local to low skilled workers and, surprisingly, indicates that a 1\% increase in unemployment benefits increases job duration by around 0.3\%. Such result is driven by the fact that higher UI decreases the probability of job quits, which are not covered by UI in Brazil. These estimates are robust to permutation tests and a number of falsification tests. I develop a reduced-form welfare formula to assess the economic relevance of this result. Based on that, I show that the positive effect on employment duration implies in a higher optimal benefit level. Moreover, the formula shows that the elasticity of employment duration impacts welfare just with the same weight as the well-known elasticity of unemployment duration to benefit level.