Life Settlements, Secondary Annuities, and Structured Settlements: Rate Increases Squeeze Returns


Mike Warner
Conning, Inc.

Conning—Life Settlements Industry Margins Pressured by Cost of Insurance Rate Increases

(Hartford, CT) October 20, 2016—Life settlement market conditions are relatively benign, except for margin pressures from cost of insurance increases over the past year, according to a new study by Conning, Inc.

“Life settlements continued to attract investor interest as an alternative asset class in 2015 and into 2016,” said Scott Hawkins, a Director, Insurance Research at Conning. “Looking ahead, economic conditions continue to favor the asset class as investors seek above average returns in the prolonged low interest rate environment. The regulatory landscape remains relatively stable and favorable to life settlement growth. As more individuals seek ways to monetize their unwanted life insurance policies, consumer demand is likely to remain strong.”

The Conning study, “Life Settlements, Secondary Annuities, and Structured Settlements: Rate Increases Squeeze Returns” reviews the current market for life settlements and presents our forecast for 2016 - 2025. Further the study analyzes the performance of insurers targeted by life settlements investors, and analyzes drivers of cost of insurance increases by certain insurers over the past two years.

“Despite this positive environment, unless investors commit higher levels of capital, annual volumes are unlikely to grow to pre-recession levels,” said Steve Webersen, Head of Insurance Research at Conning. “The increases in cost of insurance by certain insurers over the past two years have had a chilling effect on investors. As a result, new settlements will not be sufficient to offset the decrease of in force life settlements as the large block of older policies files death claims and the amount of in force life settlements will decrease, reducing the supply of policies available in the tertiary market.”

“Life Settlements, Secondary Annuities, and Structured Settlements: Rate Increases Squeeze Returns” is available for purchase from Conning by calling (888) 707-1177 or at


Conning ( is a leading global investment management firm with more than $124 billion in assets under management as of September 30, 2016.* With a long history of serving the insurance industry, Conning supports institutional investors, including pension plans, with investment solutions and asset management offerings, award-winning risk modeling software, and industry research. Founded in 1912, Conning has offices in Boston, Cologne, Hartford, Hong Kong, London, New York, and Tokyo.

*AUM represents the combined assets under management for the affiliated firms under Conning Holdings Limited, Cathay Securities Investment Trust Co., Ltd. ("SITE") and Cathay Securities Investment Consulting Co. ("SICE").  SITE and SICE report internally into Conning Asia Pacific Limited but are separate legal entities under Cathay Financial Holdings, Ltd. and its insurance subsidiary Cathay Life Insurance Company, Ltd., which are the controlling parents of all Conning entities.