Conning Report: Growing Life Settlement Year
The face value of total life settlements has increased for the second consecutive year, signaling a promising landscape for the settlement market, according to the Conning Report released in November. The report, entitled, “Continued Growth, Positive Outlook,” includes an overview of the life settlement market, an examination of the factors that drive settlements and sections covering life settlement insurer performance and the trend toward higher cost of insurance (COI).
The report, which is the thirteenth annual review and forecast of the life settlement market produced by Conning, bodes well for the future of life settlements, despite dampening trends like COI increases. Among the report’s key findings:
Volume of the Life Settlement Industry
The volume of life settlements has increased in the past year, and the growth of the market has brought increased marketing and consumer efforts from life settlement providers, as many are seeking options to get rid of their life insurance policy.
Legal and Regulatory Developments
Legal and regulatory developments, including the 2018 Tax Cuts and Jobs Act (TCJA) and favorable legislative and court decisions for consumers, have made life settlements and more accessible and profitable option for many.
The drivers that point to future life settlement growth are largely favorable, including economic, capital, consumer and industry drivers.
Life Settlement Ten Year Forecast
The ten-year forecast predicting the future of the life settlement landscape spell continued growth. The ten-year forecasts for both annual gross market potential and annual volume for new settlements both increased from Conning’s predictions.
As insurers have increased cost of insurance (COI), consumers have seen a requisite rise in premiums, and as a result, life settlement investors might see a drop in investment returns.
For more in-depth analysis of the 106-page Conning report, keep an eye on Magna’s blog as our executives weigh in on the most compelling aspects of the research.