This news reported bye Bloomberg is not good news, but talk within the industry was thinking it could have been worse…
Policies sold by insured individuals in 2009 had a face value of about $8 billion, a decrease of 36 percent from a year earlier, Conning & Co. said today in a statement.
“During 2009, a significant decrease in investor capital reduced the ability of life-settlement funds to purchase new policies,” Scott Hawkins, an analyst for Hartford, Connecticut- based Conning, said in the statement.
About $35 billion of U.S. life settlements were in force at the end of last year, up 16 percent from 2008, Conning said. Investors pay the premiums after buying the policies, and make money if the remaining costs are less than the final payout when the seller dies.
Conning said the industry was hampered also by new methods for calculating life expectancy. Underwriters made the changes in late 2008 and early 2009, extending average estimates for life expectancy and creating uncertainty about the accuracy of earlier contracts.
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