Industry group the European Life Settlement Association (ELSA) has, in conjunction with asset management firm Conning, published Unlocking Value: Insights into Life Settlements Investment Trends, a new report that lifts the lid on investor sentiment towards the life settlement asset class.
The report surveyed 156 institutional investors between August and December 2024 to identify current attitudes among those investors who are active in the life settlement market.
Among the notable results from the survey is that 44% of respondents are looking to increase their allocations to life settlements over the coming year, compared to only 12% that were looking to decrease their allocations. Additionally, investors cited diversification benefits (83%) and a lack of correlation to liquid markets (79%) within their existing portfolio as the top two positive aspects of the life settlement asset class.
However, it is clear from the survey that the industry has work to do with regards to those less familiar with life settlements; 45% of respondents said that they would need more education on the asset class before they would invest.
“The survey results underscore sustained interest in life settlements among existing investors. However, barriers such as the need for greater education, historical performance data, and fee transparency must be addressed to broaden participation,” said Manu Mazumdar, Head of Data Analytics and Insurance Technology at Conning, and lead author of the report.
The report is the first of its kind that addresses these topics with institutional, end investors, and ELSA believes that the overall message is one of encouragement for the industry.
“The first ELSA and Conning investor survey shows an asset class that continues to appeal to investors once they get into the market. The challenge, for ELSA and the broader industry, is to increase investor awareness of the asset class. Education was identified as the main topic that investors need more of in order to consider allocating to life settlements, so it is imperative that we continue in our efforts to bring more information to the asset owner community,” said Bill Corry, General Partner at Corry Capital Advisors, and current ELSA Chair.
“This inaugural survey has provided our membership, and the industry at large, with genuine, primary research-based data which we can use to steer our efforts as both an organisation and industry going forward,” said Chris Wells, Executive Director at ELSA.
“Whilst there is clearly plenty of work to do, I’m also encouraged by the positive experiences from those once they participate in the asset class. Our industry provides many benefits not only to investors, but also to consumers, and it is terrific to see that much of the positivity that we promote is reinforced in this survey,” Wells added.