Conning Research: U.S. Life Settlements Activity Flattened in 2008

Conning 2008 estimate: $11.7 billion of life insurance face values settled

The life settlements market was hit hard by the economic crisis and other factors in 2008, according to a new study by Conning Research and Consulting.

“The economic crisis was the major impediment to growth in the United States life settlements market in 2008, as the credit markets froze in the second half and life settlements buyers had difficulty financing new premiums,” said Scott Hawkins, analyst at Conning Research & Consulting. “In addition, the major life expectancy underwriters revised their methodologies, calling into question the accuracy and valuation of existing portfolios. While there were fewer active buyers in the market, our $11.7 billion estimate of 2008 settled policies did increase our estimate of cumulative in-force life settlements face values.”

The Conning Research study, “Life Settlements: A Buyers’ Market for Now” presents Conning’s estimates of current market size and growth rate, as well as a long term forecast and analysis of market conditions.

“The life settlements market must shake off profitability concerns and general market concerns about life insurer solvency before it will return to growth,” said Stephan Christiansen, director of research at Conning. “The buyers’ market of late 2008 and 2009 should help buyers re-establish profitability in their portfolios. More policyholders want to sell, and more agents now understand life settlements—the near term challenge is all about buyers’ and investors’ capacity.”

“Life Settlements: A Buyers’ Market for Now” is available for purchase from Conning Research & Consulting, by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com.

About Conning Research & Consulting

Conning Research & Consulting provides insurance industry analysis to insurers and industry stakeholders. Its published research includes market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. The Conning name has represented excellence in independent insurance industry research for 50 years. Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning is headquartered in Hartford, CT.