Report: Firms May Buy $15 Billion In Life Benefits

By Arthur D. Postal

January 04, 2005 at 07:00 PM

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Expanded efforts to reach out to financial advisors could help fuel continued growth in the life settlement market.[@@]

One survey shows that only 20% of advisors have conducted any life settlement transactions, according to researchers at Maple Life Financial Inc., Bethesda, Md.

"Spreading the message is a common goal for many professionals in the life settlement industry," Maple Life researchers write in a new report on the life settlement market.

Here are some other findings that appear in the report, which is based in part on an informal survey that Maple Life conducted for its own quarterly newsletter:

- Maple Life predicts that the life settlement industry will buy about $10 billion to $15 billion in life policy death benefits this year.

- Bill Tostsos, a regional director at Gateway Financial Distributors, Glen Carbon, Ill., says a U.S. move to adopt global accounting standards could affect the life settlement industry by establishing a single standard for estimation of the fair value of assets.

- Steve Boger, a consulting actuary in the Lake Forest, Ill., office of Milliman Inc., expects to see a tighter-priced market and more moves to reposition portfolios. Some investors may leave the industry, Boger predicts.

- When Maple Life asked survey participants about which factors would impact the life settlement market this year, 19% named fiduciary responsibility, 14% named ethical business practices and 14% named increased regulation.

- Trends that life settlement survey participants expect to see this year include new product development, an increase in the sophistication level of market participants and an increase in the use of brokerage service firms.

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