Insurer Builds Business Between Diagnosis and Death

Revenue Per Employee $3.37 million

The head office of Coventry First sits next to the Sandy Run Country Club, about 12 miles north of Philadelphia— a woodsy, suburban setting where the company goes about buying life insurance policies from elderly people whom it expects will die within 15 years.

Coventry First handles what it calls “life settlements,” providing a “secondary market for life insurance.” Here’s how it works: Coventry First negotiates to buy the rights to the life insurance policy of someone 65 or older who has had a “change in health” since the policy was issued. Working with that person’s financial adviser, the company pays a lump sum—say, $200,000 for an insurance policy with a face value of $1 million—based on the insured’s current life expectancy. People might decide to cash in their policy to pay for medical bills or other living expenses.

At the same time, the company lines up financing for the payment from an institutional investor, which becomes the policy’s beneficiary. Coventry First takes a cut of what it pays the insured individual and, as part of the deal, also manages the policy, paying the premiums so it stays in force until the individual dies. As chief financial officer Antonio Muñiz puts it: “We monitor the behavior of the asset until it matures.”