Meet the man who could own aviva france
It lets him turn back the clock, to invest with perfect hindsight week after week, steadily accumulating a fortune. The ticket is a life insurance contract and Mr George, now 25, has fought for years in the French courts to preserve its magic. He could be a billionaire by the end of this decade and, by the end of the next, his contract would be worth more than the insurance company which stands behind it, Aviva France. There is no mystery to the financial magic, however. Instead it is a story of grand stupidity, of how a French insurer wrote the worst contract in the world and sold it to thousands of clients.SEE VIDEO BY TOPIC: The Script - Never Seen Anything "Quite Like You" (Live at Ziggo Dome)
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It lets him turn back the clock, to invest with perfect hindsight week after week, steadily accumulating a fortune. The ticket is a life insurance contract and Mr George, now 25, has fought for years in the French courts to preserve its magic.
He could be a billionaire by the end of this decade and, by the end of the next, his contract would be worth more than the insurance company which stands behind it, Aviva France.
There is no mystery to the financial magic, however. Instead it is a story of grand stupidity, of how a French insurer wrote the worst contract in the world and sold it to thousands of clients.
Life insurance is a popular savings product in France, and typically the customer allocates their money among different investment funds offered by the insurer. But this contract was not typical: prices for the funds were published each Friday, and clients were allowed to switch funds at those prices anytime before the next price was published, even if markets moved in the meantime.
Is the stock market up this week? In a world where the price of everything is now a mouse click away, offering a hindsight investment service seems incredible, if not suicidal. Yet thirty years ago prices for funds were published infrequently. Trading involved calling your broker, visiting him person, or maybe sending a fax.
It could take days for the trade to be processed, during which time the market could move again. It may be that the opportunity to talk to the wealthiest clients on a regular basis was the incentive, or executives thought the work involved meant few would take full advantage of the opportunity. As financial information became more accessible in the s, insurance companies began to realise the danger of hindsight terms.
They started to persuade customers to amend the contracts, paying them to give up the right to trade at week-old prices. The important thing to realise about insurance is the sanctity of contract. You might finagle the meaning of a particular term, but the whole point is for the writer to stand behind what was agreed.
Regulators do not let insurers unilaterally change their terms. Shortly afterwards, Abeille Vie — which had by then been absorbed into Commercial Union — stopped selling magic tickets. Mr George grew up with a fine appreciation for the power of paperwork and the French legal system. Each week the family would switch their money into the best fund. To make sure nothing goes awry in the post, Mr George pays for a court appointed bailiff to deliver each set of instructions. In , Commercial Union took part in the merger of insurance companies which formed Aviva.
Around that time legal cases began to appear as holdouts tried to assert their right to hindsight, represented by Nicolas Lecoq-Vallon, a lawyer who would later become celebrated in France for representing victims of the ponzi schemer Bernie Madoff. In Aviva told Les Echos around 30 holders of the magic contracts had taken legal action. The family George won their first court judgement in , which affirmed the validity of their contracts.
What remains a matter of continued litigation is the value of those contracts. An expert was appointed to assess the claims, and a Paris District court approved his findings, effectively that the families investments grew in value at Mr George continues to arbitrage time. For instance, he might have his money in an Aviva fund invested in the French stock market. Lets say the Nikkei rises 5 per cent during the week. So he is now in a strange position.
Each week he grows his fortune by trading the past with precision, but cannot say how rich he is. Estimating the size of his windfall is an illustration of exponential growth. Assume the growth rate of There was quite a significant market crash in , but imagine you were able to pick the best performer each week as markets rebounded in An appeal court, and potentially the Cour de Cassation, will still have the chance to settle the matter.
Aviva said in a statement:. Aviva France strongly contests this compensation claim and believes that the Court will rule against the speculative and excessive compensation levels being sought. Consider the effect of a liability growing at He is a French citizen, but lives in Switzerland.
He said the contract terms allow him to add more cash to the pot. The absence of some plaintiffs from subsequent litigation suggests settlements were reached in some cases. The family declined to comment on the status of his policy. His son claimed to be resolute, however. You are commenting using your WordPress.
You are commenting using your Google account. You are commenting using your Twitter account. You are commenting using your Facebook account. Notify me of new comments via email. Notify me of new posts via email. Aviva said in a statement: Aviva France strongly contests this compensation claim and believes that the Court will rule against the speculative and excessive compensation levels being sought.
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Meet the man who could own Aviva France
He is best known for his legal battle with life insurance company Aviva. George is the youngest child in the family, born March , he grew in Metz, France with his brother and sister. From a very young age George showed great interest in economics and finance. Seeking to concentrate on his professional career he abandoned studying in , having completed only two years.
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"Meet the man who could own Aviva France"
The contract allows him to switch his sum insured between Aviva funds at every week and to make the decision in retrospect. This man has been making paper gains of circa Aviva is challenging the contract in court. But if they lose and he lives for a few more years, Aviva France may not according to the FT article have enough money to pay out on his life insurance This leaves me with two questions: 1. Would Aviva plc have to cover the losses should this contract exceed the amounts that Aviva France can afford?