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08 May 2013

Life Settlements Provider Survey by SL Investment Management Points to Upbeat Mood for Future of Secondary Market in 2013 and Beyond

A recent qualitative survey, conducted by secondary life asset manager: SL Investment Management (SL), reveals a healthy outlook for the asset class in the coming years.

SL interviewed a number of secondary-market providers to gain detailed insight into the future of life settlements, looking at issues such as perceived returns, the attitude of the life companies, the perception of US consumers and the effect of increasing life expectancy. 

Key findings highlighted:-

• Steady growth; 77 per cent of respondents believe that the life settlements market will grow steadily during 2013.

• Impressive returns; 67 per cent of respondents predict between 14 - 18 per cent returns, while a further 11 per cent predict returns of over 18 per cent.
• Improved cooperation from the life offices; 67 per cent of respondents believe that relationships will continue to improve between the life companies and the secondary market but that it will take time. However an upbeat 33 per cent say that there are already signs of improved relations. 

• Institutional markets still right fit for life settlements; 41 per cent predict that Institutional Investment Funds will continue to be the leading buyers of life settlement policies in 2013 with Private Equity groups following (33 per cent). 

• Education process required among US citizens regarding existence of secondary market; 67 per cent say that there is very little awareness of the secondary market among the US public.  A combined 88 per cent say provision for consumers is 'poor' or 'neutral'.

Commenting on the research, Paul Sands, SL's Chief Executive Officer, says:  "Taking a macro approach, the findings are very positive.  The market is maturing and industry participants' attitude to the near-sight future of life settlements demonstrates an acceptance that simply wasn't there a few years ago. 

"The lack of awareness among US citizens represents an untapped supply of high quality policies which, once released into the market, will create long term benefits for the secondary market place as a whole; the potential growth in this industry is plain for all to see."