The life settlements market size is monitored by several entities which are all quick to let everyone know that their measure is only a guestimate because there is no requirement for reporting transactions and not everyone is all that forthcoming with their annual volume of trades. With that said however it has been estimated that in 2009 the life settlements market size was approximately $7 Billion with 2010 volumes still to be guestimated. This number is down considerably from the $12Billion of estimated trades completed in 2007. The primary reason for this downturn is a direct reflection of the nation’s economic downturn and capital markets pulling back from investments to wait until more favorable conditions present themselves before entering back into the market.
While no one can say for sure there are many people very optimistic that the 2011 life settlements market size will rebound with various capital markets re-entering the market along with some new money looking to enter the space. During the downturn in trading the buyer’s market limited the purchase prices for policies. It is unsure how many people opted not to sell their policy due to insufficient offers but for those still interested in selling a policy the 2011 outlook is good for more competition for policies which brings higher offers for those policies. So as the life settlements market size increases so does the size of offers if multiple offers can be procured. This is the primary reason for working with a broker during the sale of a policy as they will know all of the potential buyers of policies.
So if all the predictors are right and we do see an increase in 2011 it should be great news for everyone involved. For more information on the life settlements market size please visit LIVEpdq.