Life Settlements and Secondary Market Annuities: Opportunities and Challenges
Conning—Life Settlements Market: Continued Investor Interest, Smaller Face Amounts
(Hartford, CT) October 14, 2015—The life settlements market continues to draw investor interest, but is challenged by the shifting demand for smaller face amounts, according to a new study by Conning.
“We have seen continued investor interest in life settlements as they seek above average returns in this low interest rate environment,” said Scott Hawkins, Vice President, Insurance Research at Conning, Inc. “Investors purchased $1.7 billion worth of U.S. life insurance face value in 2014, bringing our estimate of the total face value of life settlements at year end to just over $32 billion. Looking ahead, we project continued steady growth in the amount of face value available for life settlements, but the industry has a long way to go to re-attract capital to pre-2009 levels to meet that supply.”
The Conning study, “Life Settlements and Secondary Market Annuities: Opportunities and Challenges” provides Conning’s annual Life Settlements Market Review and Forecast, along with market guidance. The study also explores the secondary market beyond life settlements, including secondary annuity and structured settlements markets as well as non-U.S. secondary markets for insurance. This study is the twelfth such report on the market published by Conning.
“One challenge in attracting higher capital is the availability of other alternative investments,” said Steve Webersen, Head of Insurance Research at Conning, Inc. “Investors interested in insurance-based assets are expanding their horizons beyond traditional life settlements to non-U.S. secondary markets for insurance, as well as secondary annuity and structured settlement markets. To attract capital to the traditional life settlement market, providers will need to restructure their operations to more effectively address small-face business and more closely align their compensation models with investor interests.”
“Life Settlements and Secondary Market Annuities: Opportunities and Challenges” is available for purchase from Conning by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com.
Conning (www.conning.com) is a leading investment management company for the global insurance industry, with $92 billion in assets under management as of June 30, 2015, through Conning, Inc., Conning Asset Management Limited, Cathay Conning Asset Management Limited, Goodwin Capital Advisers, Inc., and Conning Investment Products, Inc. that are all direct or indirect subsidiaries of Conning Holdings Limited (“Conning”) which is 100% owned by Cathay Life Insurance Co., Ltd., a Taiwanese company. The company's unique combination of asset management, risk and capital management solutions and insurance research helps clients achieve their financial goals through customized business and investment strategies. Founded in 1912, Conning provides clients with innovative solutions, leveraging its global capabilities, investment experience, proprietary research and risk management technology. Headquartered in Hartford, Connecticut, Conning also delivers its services globally through its offices in New York, London, Cologne, Hong Kong, and Tokyo.