After a bumpy start, the U.K insurance securitization market has ironed out some of the major kinks in embedded value or Value of In-Force (VIF) securitization structures. Market sources say the pieces are falling into place to get this market off the ground and are hopeful that an increasing number of U.K. insurers will turn to securitization as a way to manage capital more efficiently.

"I think that when you look at how this market is developing, it's not exciting in terms of how many deals we will see a year but what's exciting is the fact that the [insurance industry] doesn't look at securitization as a means to manage the balance sheet," said one market source. Banks have historically been more aggressive than insurance companies in developing financial engineering and capital markets solutions to manage both their risks and capital, but life insurers are increasingly exploring these techniques.

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