No, I watched the company for a while but I have been too lazy...

No, I watched the company for a while but I have been too lazy to get my head around it. I have spent the last 30 mins on it and my head is already spinning.

I guess the real problem would be the long dated bonds and residential mortgage securities. If interest rate rise more than expected the value of these would decrease. Not a disaster as a third of the assets are floating and I don't think interest rates are really going anywhere anyway.

I guess the other concern is the obligation they have to their clients to continue to pay them an income stream that might be harder to pay if we enter a bear market in bonds/residential property/infrastructure/listed investments because of rising interest rates. The other problem could be that if interest rates do rise people might be happy to place their money in term deposits instead of an annuity. (I did see someone talk about Challengers ability to match these obligations with great accuracy and they didn't believe this would be a huge concern).

I couldn't find information on when someone dies and/if they lose their deposit how much of this contributes to the contract liabilities etc.

I guess put another way if you could get 6% in a term deposit would a senior be happier to place their money in that or under one of these contracts that are certainly interesting to say the least.

Challenger looks to have been a beneficiary of the income produced from the fixed investments along with the increase in market value of those investments. I think it is difficult to say what happens when that reverses. Do they end up holding lost of distressed corporate and residential mortgage debt worth much less? I don't know.