Asset management firm Conning’s newest report on life settlements finds that the market continues to attract a steady flow of capital, but that overall growth in the opportunity is outpacing the investment in the asset class.
Life Settlements: Steady On is the firm’s 19th annual market review that examines the key forces fuelling growth within the life settlement industry.”
“The asset class continues to show that there is still consumer interest and capital looking to invest in life settlements,” said Roberta Lauria, an Assistant Vice President of Insurance Research at Conning and the report’s author.
“In terms of face amount, in-force life settlements continue to grow, which is positive for the tertiary market,” she said, noting that she expects to see some $5 billion in the average annual amount of new life settlements.
Life settlements continue to generate interest among investors seeking assets with lower correlations to larger market movements such as the volatility in interest rates and equity markets during the past two years. However, investors are being somewhat more selective in the companies standing behind the policies.
“Greater attention is being paid to the financial strength and performance of the companies that issued policies owned by life settlement investors,” said Scott Hawkins, Head of Insurance Research at Conning.
“Our analysis in this report found that at the end of 2023, the companies targeted by life settlements investors had a weighted average RBC (risk-based capital) slightly higher than the weighted average for the overall life insurance industry. While variations exist within the group, the higher RBC levels suggest investors have favoured policies issued by strongly capitalized insurers.”
