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Life Settlement Market Bounces Back In 2013

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SOURCE TheStreet, Inc.

The Deal Reports Findings from Annual Life Settlement Survey

NEW YORK, June 23, 2014 /PRNewswire/ -- The Deal, TheStreet's (NASDAQ: TST) institutional business, today issued results from its annual survey of the life settlement market showing that transactions stopped their precipitous decline last year as the face value of life insurance policies sold reached $2.57 billion, an increase from $2.13 billion the year before. The survey, compiled from information obtained through public records requests to state insurance departments, includes data from 36 life settlement providers, including seven that reported no transactions at all.

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"This is the first time in several years in which the number of life settlement transactions has gone up. This can only mean the market is starting to bounce back after years of being in the doldrums following the recession," said Donna Horowitz, Senior Editor for The Deal. "One of the main challenges that lies ahead for the market to continue to grow is consumer awareness.  Most people still do not know that they have the right to sell their policies. Unlike the reverse mortgage market, the life settlement market remains largely unknown to the public."

Highlights from the report include:

  • The number of policy sales, at 1,356, represented 10 more deals than in 2011 when the total face value purchased was $5.07 billion and 160 more transactions than in 2012. In all, $406.2 million was paid to purchase policies last year compared to $319.4 million paid the year before.
  • The total face value of policies sold reached $2.57 billion, an increase from $2.13 billion the year before.
  • Top five settlement buyers:
    • Coventry First led the market in the total number of transactions, buying 637 policies in 2013 compared to 597 policies the year before. Coventry paid $71.8 million and purchased $340.1 million in policies.
    • Magna Life Settlements Inc. overtook long-time market leader Coventry First LLC in the amount paid and the face value of policies purchased in 2013. Magna paid $153 million, more than double the amount paid by Coventry. Policies purchased by Magna totaled $930 million in face value, almost triple the value of Coventry's policies.
    • Settlement Group Inc. came in third place in the ranking, with 71 transactions last year, compared to 53 in 2012 and a fourth-place ranking. Settlement Group paid $12.5 million for 71 policies with $107.2 million in face value last year. Although it did fewer deals in 2012-53 of them-Settlement Group paid almost twice as much for them at $24.7 million. The face amount, at $149.7 million in 2012, also was higher than last year.
    • Life Equity LLC had a better year last year, jumping to fourth place with 65 transactions from fifth place with 50 transactions in 2012. The Hudson, Ohio-based provider paid $10.2 million for policies with $121.9 million in face value last year compared to spending $12 million for $137.7 million in death benefits in 2012, reflecting a trend toward smaller policies.
    • Abacus Settlements LLC ranked fifth with 56 settlements, $13.5 million paid and a face value of $119.4 million.

The full report is available online.

About The Deal

The Deal, a business unit of TheStreet, has been serving corporate dealmakers, advisers and institutional investors the most sophisticated analysis of the deal economy since 1999. Our transaction information service, The Deal Pipeline, is powered by a newsroom of senior journalists who offer proprietary research and reporting across M&A, bankruptcies, auctions and financings. It includes a breaking news service, First Take; daily and weekly sector newsletters; The Daily Deal, a 2x daily report of the day's top stories; a research center with over a decade's worth of intelligence and a database of over 100,000 deals; and an iPad & iPhone app. Our marketing & media services group produces the industry's leading forecasting event, The Deal Economy, held annually in New York City in addition to industry webcasts and integrated marketing programs. For more information, visit www.thedeal.com.

CONTACT:
Emily Scheer
212.321.5521
Emily.Scheer@thestreet.com

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