Our Secret
​Master Plan

​Jon Sabes, CEO
November 3, 2016


We started our company in 2006 to create a secondary market life insurance company. This means we create value for consumers by investing in the life insurance assets they no longer want, need, or can afford. The secondary life insurance market exists simply because insurance carriers offer grossly inadequate surrender values for the life insurance products they sell. Over time, consumers have grown complacent, innovation has stifled, and insurance carriers have grown to enjoy the voluntary consumer lapse and surrender behaviors that enhance their profits. Our business was founded to disrupt the status quo and innovate the life insurance industry – and our plan is to take it well beyond its comfort zone.

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New Actuarial Underwriting Technology

A key to investing in life insurance assets, as well as managing pensions, social security entitlements, annuity liabilities, and several other financial services, is understanding the actuarial mortality profile of individual populations. In our case, the investment returns we derive from our portfolio of life insurance is based primarily on the underlying actuarial results we experience. The goal of the insurance business is to develop predictable actuarial underwriting models to appropriately price and select associated products and risk. The term “actuarial underwriting” is my term, and industry professionals may chafe at my use of it, but for me this term explains the goal of the life insurance business which is to better estimate individual lifespans across large groups of people. 

The critical function of actuarial underwriting has changed little in more than a century. Historically the life insurance, long-term care, and annuity industries have used “medical evidenced based underwriting” to assess, select and price risk in order to operate their businesses profitably. Medical evidenced based underwriting is exactly what it sounds like – an underwriter reviews an individual’s medical data and family history in order to develop a view of the insured’s health profile for purposes of appropriately pricing the risk associated with the product being sold. 

Because actuarial underwriting is also key to our business, we began an initiative in 2015 to re-examine the way in which we approached this process. Our initiative included a review of new advanced medical technologies capable of predicting aging and related mortality more accurately. These technologies leveraged new developments in the examination of telomere length, gene expression, and protein expression. Our investigation ultimately led us to the lab of Dr. Steve Horvath, a Professor of Human Genetics and Biostatistics at the University of California, Los Angeles (UCLA). Dr. Horvath is a recognized expert on aging who has focused his research on the root causes of aging that are encoded in the DNA molecule.

In 2013, Dr. Horvath reported that human cells have an internal “biological age” and “biological clock” at the DNA molecular level that is indicative of the aging process. The research was hailed as ground-breaking and featured in the scientific journal of Nature. The study of chemical modifications to the DNA molecule that reveal aging, among other things, is now a cutting edge science known as epigenetics. Epigenetics is the study of how the DNA molecule’s instructions are translated into the production of proteins that make us who we are. In other words, while scientists unraveled the sequence of our DNA molecular code in 2003, in many ways only now are they beginning to understand how that code translates into our individual makeup. Dr. Horvath’s epigenetic research has focused on methylation sites on our DNA (28 million methylation sites on the human DNA molecule) in order to study the genetic and epigenetic determinants of aging and mortality. ​​

In 2016, Dr. Horvath reported a discovery. Upon completion of a statistical analysis of over 13,000 individual DNA samples, he was able to identify a specific set of DNA methylation-based bio-markers that could be used to predict individual risk of all-cause mortality. The implications of the discovery are simple and profound: Individual lifespans can now be estimated with significantly greater precision across large groups of people.

We are working right now to translate this technology into an actuarial underwriting methodology that we believe will be revolutionary. We expect to immediately begin implementing this technology to enhance our current underwriting processes. And we believe the recently evolved technology of identifying epigenetic bio-markers to forecast actuarial mortality will create a marked leap forward to better assess, select and price risk for the life insurance, long-term care, and annuity businesses. 

Fintech – Insurtech Opportunity 

We believe the incumbent industry has no incentive to change. We believe the incumbent industry has little ability to change. We believe the incumbent industry lacks the imagination to reinvent itself from within. We believe the incumbent is vulnerable. 

We know the $21 trillion life insurance industry provides grossly inadequate surrender values to consumers who own life insurance. We know this because we have lived it for over ten years. In addition, we have learned that the life insurance industry has built a cumbersome underwriting apparatus that makes the process of selling life insurance more challenging than ever, has not evolved its products to address consumer needs, and has not employed advanced technologies to assess, select, and price risk. 

Industry insiders, observers and professional commentators have been actively writing about the existence of major fintech and insurtech opportunities within the insurance industry. Insurance industry leaders acknowledge that “…advancements such as DNA testing potentially upending the insurer’s ability to assess and select acceptable risks” is a reality. Periodicals and news articles are replete in highlighting the fact that the insurance industry business is ripe for a disruptive fintech reinvention. Industry observers and commentators also suggest that reinvention must come from outside the industry. 

We believe there is a tremendous opportunity for our disruptive financial services company to reinvent the life insurance industry using our predictive bio-marker technology. We believe our technology has the potential to upend a century of entrenched incumbent practices in the life insurance businesses. In addition, we believe our technology may open new markets where traditional medical evidenced based underwriting is either impractical or impossible. 


So what are we doing about it? Our team does not consist of traditional life insurance industry professionals. Rather, our team consists of financial entrepreneurs who have been working on the backend of the life insurance industry. Along the way, we have asked simple questions about complex industry problems and searched for innovative solutions to address the problems we encounter and the opportunities we perceive. 

Since inception, our business has been, and always will be, a disruptive outsider to the life insurance industry. Today, we are seeking to provide consumers additional value for their life insurance by upsetting the status quo of high policy lapse rates and low surrender values enjoyed by life insurance carriers for years. And now, with the announcement that we are exercising our option to exclusively license “DNA Methylation Based Predictor of Mortality ” technology from the University of California, Los Angeles (UCLA), we have acquired technology that will not only make us smarter in our current business, but also gives us the opportunity to effect an elegant paradigm shift in actuarial underwriting methodology. ​

Our corporate lineage is fitting, as the existence of the life insurance secondary market drove Elizur Wright to become the “father of life insurance” by reinventing the industry with a state regulatory regime that requires insurance carriers to maintain surplus capital and provide surrender values to consumers. Over 100 years later, the secondary market again drives another reinvention; however, this time the reinvention comes from market forces and liberating technology. Seeking to capitalize on our opportunity with insurtech is the next logical step for our corporate story, values, and mission as we are uniquely situated to creatively disrupt and reinvent the life insurance industry.

So our secret master plan is as follows:

  • First, we are going to use technology to greatly improve our current business;
  • Second, we are going to use technology to enter the primary markets of the life insurance business;
  • Third, we are going to use technology to expand all aspects of the life insurance, long-term care, and annuity businesses; and
  • Fourth, we are going to rewrite century-old, outdated practices and provide consumers with new value-added insurance products that meet their modern day needs.

Please don’t tell anyone our plan.
p.s. I am publishing our Secret Master Plan in homage to Elon Musk and his 2006 post of The Secret Tesla Motors Master Plan. Musk’s bold, transparent, entrepreneurial vision coupled with his initiative to take action is inspiring to any entrepreneur seeking to do the same!


Life Epigenetics, Inc.

​Life Epigenetics, Inc. is dedicated to evolving underwriting with epigenetic technology for the global life insurance and health and wellness industries. We believe epigenetic testing improves the accuracy of key underwriting factors used for the life insurance and wellness industries.

Life Epigenetics was founded in 2016 as a wholly-owned subsidiary of GWG Holdings, Inc.
(Nasdaq: GWGH), a financial services company committed to transforming the life insurance industry through disruptive and innovative products and services. Life Epigenetics is the exclusive license holder of the University of California, Los Angeles’s “DNA Methylation Based Predictor of Mortality” technology for application to the life insurance and related industries. The technology, invented by Dr. Steve Horvath, a professor of human genetics and biostatistics, and Life Epigenetics Chief Science Officer, Dr. Brian Chen, provides predictive mortality analysis based upon epigenetic biomarkers.
Visit the Life Epigenetics website

Frequently Asked Questions

FAQs about the technology and how GWG may integrate it into its business:

What is the technology GWG Holdings has licensed from UCLA? 

We have licensed the “DNA methylation-based predictor of mortality” technology from UCLA that was invented by one of UCLA’s professors, Dr. Steve Horvath, the leading expert on epigenetic technology and aging. Our license is exclusive to life insurance and related businesses, which puts us in a unique position to apply this technology to this industry.

What is this technology? 

The technology, invented by Dr. Steve Horvath, enhances the prediction of life expectancy by using epigenetic biomarkers that can be identified in saliva or blood samples. Epigenetics differs from genetics in that epigenetics do not include changes to the genetic sequence, an important distinction that means we are analyzing material that is not fixed at birth but changes as a person ages and provides insight into life expectancy that has never before been available. Through our subsidiary Life Epigenetics we have been collecting and analyzing epigenetic data from policyholders looking to sell their life insurance and have been actively pursuing the commercialization of the epigenetic-based technology in what is called “M-Panel” technology.

How will it be used and how will it affect GWG Holding’s current business?

We are working to find ways to integrate aspects of this technology into our underwriting protocols to help us make better decisions about the life insurance policies we purchase.

What is your motivation for doing this?

As a leader in the life insurance secondary market for more than ten years, we have had a front row seat to how the key parts of this industry operate. We believe these new technologies possess the potential to upend a century of entrenched incumbent practices in the life insurance, and long-term care businesses.

Will this mean that GWG Holdings will change the process it uses for purchasing life insurance policies on the secondary market?

M-Panel technology is designed to easily adapt to current underwriting processes. The process used for purchasing life insurance remains relatively unchanged. This should also hold true for other companies using our technology. However, as we make advancements in this technology and as more and more data is gathered using it, it could very well lead to significant changes to our companies, and others, underwrite risk. Moreover, it could lead to dramatic improvements in efficiency in the purchasing process.

When do you think you will implement this technology into your current business?  

We are currently rolling out this technology with new applicants in our business.

How is this technology different from the home DNA tests I see online?

Online DNA testing companies differ from our technology in two fundamental ways: (1) they are testing your genetic sequence, which hasn’t changed since you were born, and are testing epigenetic biomarkers, which behave more like other biomarkers that are commonly measured at your doctor’s office (e.g., cholesterol); and (2) they focus on diagnosis and pre-disposition to diseases whereas we focus on a newly discovered aspect of “biological aging.”

Who is involved in this project?

Our subsidiary Life Epigenetics has assembled a team of professionals whose expertise cover epigenetic research, biotechnology, data science, actuarial science and other disciplines.