ClearLife’s ClariNet LM platform integrates valuation, risk analysis and structuring for lifetime mortgage lenders in a user-friendly web environment.  Portfolio data can be uploaded using a standardized template and lifetime mortgage loans can be modelled across multiple Portfolios.  Scenario analysis is flexible and results are available immediately through your web browser.  Lifetime mortgage loan portfolios can be run through a variety of different SPV structures, with the full results available to share with your actuarial advisors and rating agencies.

Loans

Loans captures key data points on each lifetime mortgage loan in your Portfolio.  Loan data can be uploaded from a CSV template or entered via the user interface.  ClearLife’s ClariNet LM platform tracks house price data for each lifetime mortgage loan by region; it accommodates current-pay and deferred-pay interest using either fixed rate or floating rate.  Up to two borrowers can be added to each loan, to allow for mortgages which pay based on the health status of both partners rather than one.  Documents can be stored on the platform in association with each individual lifetime mortgage loan for review when structuring a new financing deal.

Portfolios

Portfolios allows you to build combinations of lifetime mortgage loans with different parameters.  Use the integrated search to define criteria such as region, borrower age or loan duration and then save the results as a discrete Portfolio for further analysis.  Loans can be included in several portfolios at once and portfolio composition is managed independently of the loans themselves, so deleting a lifetime mortgage loan from one portfolio does not remove the loan from the platform.

Scenarios

Each Scenario defines a set of parameters for deal structuring and portfolio valuation, whether in your base scenario or in a stress case.  ClearLife’s ClariNet LM platform allows you to set different rates of future HPI, choose different mortality profiles for your borrowers and mix and match different settings for early repayment and long term care entry.  Combine NNEG option modelling yields, discount rates and volatility preferences with property price shocks and swap curve bumps to generate NPV, lifetime mortgage loan balance projections and property value projections, with and without the NNEG cap.

Calculations

You can load a specific scenario, adjust the parameters as you see fit and use them to generate values for a single lifetime mortgage loan or a portfolio of loans.  Cashflows are calculated on a monthly basis and NPV, loan balance, NNEG option value and property values calculated.  All of the intermediate results are displayed, showing the impact of your chosen parameters.  Intermediate results can be exported to a CSV file for further analysis.

Scenario Analysis

Scenario Analysis calculates the loan NPV in all stored Scenarios for a single lifetime mortgage loan or a portfolio of loans.  Results can be displayed as absolute values or as deltas from a Base Scenario.  House price projections are also shown based on various HPI increments.  You can clearly view which scenarios will cause the greatest impact to the value of your lifetime mortgage business.

Waterfall

Waterfall is your window into structuring a financing or securitization of your lifetime mortgage loan book.  Your chosen portfolio is run through ClearLife’s Monte Carlo engine with your choice of Scenario settings and the results of each simulation are then passed through a cashflow waterfall, defined in the Liabilities table.  This table accommodates multiple liability types, including term debt, liquidity facility and performance fees.  Interest can be calculated at fixed or floating rates and can be current pay only or PIK as required.  Fees can be calculated on the outstanding loan balance or projected NPVs for the portfolio.  Liquidity facilities, if included, can be allocated to all tranches of debt or some only – thus a structure which can draw on liquidity to pay senior debt but not performance fees can be modelled.  The Waterfall outputs the mean IRR and number of simulation failures (i.e., failure to repay principal and interest when due) for each Liability in the structure and calculates the mean IRR to equity.  Intermediate results are available as CSV files for each Liability, for the equity and for the structure as a whole.

Mortality Tables

ClearLife’s ClariNet LM platform includes industry-standard mortality tables which are widely used in the lifetime mortgage industry.  It also allows you to define and upload your own mortality tables for use in your analysis.  Tables must be separated by gender and may also be separated by smoker status.

Rate Curves

ClearLife’s swap curve builder takes in deposit rates, money market futures and swap rates and constructs an interest rate curve for your chosen currency.  This curve is then used to project future interest calculations on your lifetime mortgage loans and on debt instruments in the Liabilities table for any SPV.  Multiple curves can be saved for any one currency.

SPVs

Liability structures are stored in a repository of SPVs.  They can be created independently or directly from the Waterfall feature.  It allows for liability structures to be run against different lifetime mortgage loan portfolios without needing to rebuild the liability table for each portfolio.

Microsoft Excel Addin

For Microsoft Windows users, an Excel addin is available. The addin provides a range of Excel functions which mirror the analytics from the web platform. It runs multi-threaded, outside Excel, resulting in very fast calculation time compared to traditional Excel VBA based solutions. Other benefits of the Excel addin include the ability to build custom analysis on top of our functions and being able to run our calculations directly on your Excel data. We provide a template sheet with examples of how to use our functions as well as detailed help on every function.

Platform Options

ClearLife’s ClariNet LM is offered in any of three configurations:

  • External SaaS: We host the application and your data through an Amazon Web Services facility
  • Internal SaaS: You host the application and your data on your own infrastructure
  • Excel Addin: We deliver an Excel front end and associated addin for installation on a local PC

Our web configurations allow for multiple users to access the same data set and our Excel framework can be adapted to connect to existing desktop solutions.

Continuous Development

ClearLife’s ClariNet LM platform is under continuous development.  All subscribers benefit from new features and improvements to their modules as they are released and ClearLife works directly with all of its customers to solicit ideas for inclusion in a future release.