Press summary
International Press Summary Warren Buffet, Berkshire Hathaway Inc. “The successful financier's involvement, has enhanced the credibility of the business. While it is important to note that Buffet´s Berkshire Hathaway Inc. is targeting the institutional market alone, our Provider´s funding is much more diversified, having institutional, corporate and individual purchasers.
”Wall Street Journal "The Life Settlement Industry got started only in the late 1980's, but it is maturing rapidly." "More institutional money is coming into the market." CBS 60 Minutes "It is the perfect no risk investment." Money "Since 1988, when they were first offered, Life Settlements have caught on." New York Times "With profits on investments averaging nearly 20%, it has become too attractive to ignore." Wall Street Journal "Investors view such polices as a relatively stable collateral (substitute) for asset-backed securities.
There can be no default on payment." Senior Market Advisor Magazine "If life settlement are good enough for Warren Buffett, shouldn't they be good enough for everyone else?" Conning Insurance Research & Publications In 1999 Conning & Company released another of their "Strategic Studies Series" entitled Viatical Settlements: The emerging Secondary Market of Life Insurance Policies.
To date, this report remains one of the most comprehensive studies of that Viatical and Life Settlement Industries.
"Buying the policies of healthy seniors is the latest evolution in the Viatical Industry, although these transactions more generally are referred to as "life settlements." While still in it's infancy, the size of this market and the rapidly changing perception of insurance ensure that life settlement activity likely will grow rapidly in the first decade of the next century."
"The future of the Viatical industry belongs to the life settlement business, designed to enhance the financial and estate planning feasibility of a whole generation of emerging affluent "seniors."
"The raw potential size of the seniors market is significant - with $492 Billion in individual life insurance estimated to be in force for the 65 -78 age group.: This "produces a potential life settlement market size estimate of $108 Billion."
"The life settlement market is not stagnant. Around 70 to 75 million people will be moving into their "golden years" in the near future, and this age group is the fastest growing, and most affluent, segment of the country's population."
"Prospects for obtaining "reinsurance" for the policies purchased in this market (and, thus, the ability to securitize them and access the broader capital markets) also should be favorable over the long term." Michael J. Barry, Senior Director for Fitch in New York National Underwriter: Property & Casualty-Risk and Benefits Management October 9,2000 "One area, however, that deserves mentioning is the securitization of life or viatical settlement policies which involves the securitization of the death benefits associated with a specific block of life insurance policies. Fitch believes these types of deals have the highest probability of being the next insurance related deal offered to the marketplace.
"Standard & Poors Jayan Dhru: Head, Insurance Capital Markets group Seminar 10/28/2000 "Potential Market is in the Billions of US Dollars in Life Insurance Policies at Face Value."
"Financing Sources: Individual Investors Private Placements Institutional Investors From: National Underwriter Life & Health/Financial Services Edition: Monday, November 27,2000 Mom and pop, mover over!
Institutional investors are getting ready to turn life insurance policies into asset backed securities sold to other large investors. DG Bank's Autobahn Funding Company has already participated in $200 million in life settlement transactions that have been rated by New York-based rating agency Fitch IBCA. Such transactions could be just a hint of what is to come, according to buyers of life insurance policies. Life settlements are policies sold by healthy individuals, largely senior citizens or companies or businessmen who own "key man" policies. A growing acceptance of life settlement as a market reality is occurring among institutional investors such as foreign and U.S. Banks. From: A. M. Best Methodology of Life Settlement Securitization: October 18,2004 A life settlement is an insurance policy sold by the owner — typically the insured or a trust — for an amount greater than the surrender value of the policy but lower than the face amount of the policy. The purchaser of the life settlement becomes the new owner and beneficiary of the life insurance policy and is responsible for making future premium payments and collecting the death benefits of the insured.
The life settlement market is an outgrowth of the viatical settlement market in which policies of the terminally ill — normally those insureds who are expected to die within two years — are bought and sold. In the life settlement market, however, insureds are generally 65 years or older, with medical impairments resulting in shortened life expectancies.
Life settlements typically are sold to licensed providers by insurance brokers. The price paid by providers for the life settlements depends on the life expectancies estimated by medical examiners after evaluating the medical records of the insured. The more severe the chronic illness of an insured, the lower the life expectancy and, hence, the higher the price for the life settlement. German Press Summary From: Der Fonds: 03,2004 Deutsche kaufen über Fonds Risikolebensversicherungen von amerikanischen Senioren. Bereits im vergangenen Jahr hat das neue Segment LV-Fonds nach Auskunft der Berliner Analysegesellschaft Scope Group in Deutschland mit 290 Millionen EURO (2004) mehr Eigenkapital plaziert als Windkraftfonds. From: EURO Finanzen: 08,2005 Versichert, verkauft, rückversichert – Fonds, die sich auf das Geschäft mit gebrauchten Lebensversicherungen spezialisiert haben, bleiben dank attraktiver Renditeversprechen gefragt. … diese Investmentidee machte Anbieter von Lebensversicherungsfonds, die Gebrauchtpolicen aufkaufen und zu Portfolios bündeln, zu den Shootingstars der Beteiligungsbranche. Ihr Emissionsvolumen (1,6 Milliarden EURO) war 2004 fast dreimal höher als im Vorjahr. … Die (US)-Versicherung zahlt die Versicherungssumme im Todesfall aus. Die Höhe der Auszahlung steht dabei von vorneherein exakt fest, nicht aber der Zeitpunkt. Die Initiatoren vergleichen solche Fonds gern mit einem Portfolio aus verschiedenen Null-Kupon-Anleihen (Zero-Bonds), die von Emitenten mit hoher Bonität begeben werden. Im Unterschied zu Zero-Bonds ist lediglich der Zeitpunkt der Rückzahlung nicht genau bekannt… Der Käufer einer solchen Police weiss also auf jeden Fall, welche Summe er bekommt – nur nicht wann das geschieht.