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U.S. Life Settlements Annual Volume Dropped 36% in 2009


Press release from Conning Research:

–Conning 2009 estimate: $8 billion of life insurance face values settled

–Estimated cumulative in-force amount still grew 16%

(Hartford, CT) October 28, 2010—In 2009, the life settlements market was hit hard by a significant decrease in investor capital, reducing the ability of life settlements funds to purchase new policies, according to a new study by Conning Research & Consulting.

“The life settlements industry was hit hard by the retreat of investor capital through 2009, following both the financial crisis and market specific issues of the prior year,” said Scott Hawkins, analyst at Conning Research & Consulting. “Our 2009 estimate of $8 billion face value of new policy purchases was a decrease of 36 percent from the prior year estimate. Cumulative in-force face amount increased 16 percent in 2009, off by about half from prior year.”

The Conning Research study, “Life Settlements: The Market Stabilizes as Insurer Impact Grows,” presents Conning’s life settlements market review, along with estimates of current market size and a long term forecast and analysis of market conditions.

“The drop in annual settled values stems from structural resets in the life settlements market, not from a decrease in consumer demand,” said Stephan Christiansen, director of research at Conning. “Overall capital decreased as investors grew more cautious about longevity risk in the asset class, and much of the market action was in tertiary sales of partial and complete portfolios from one investor to another, resolving earlier pricing errors. As we look to the future of this market, we believe that the life settlements market must make its case to investors, as it has done to policyholders.”

“Life Settlements: The Market Stabilizes as Insurer Impact Grows” is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company’s web site at


It’s likely that the volume will have stabilised over 2010 and actually a lot of this drop is due to the market for life settlements becoming more mature. There is definitely a case for the market to promote itself more effectively and the introduction of standards setting organisations can only help this cause. It will be interesting to see the 2010 figures and to compare with these.

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