The Deal Reports Findings from Annual Life Settlements Survey
The Deal, TheStreet’s (NASDAQ:TST) institutional business, today issued results from its annual survey of the life settlement market showing an 11.8% decline of transactions from 2011 to 2012 as a result of continuing legal and regulatory hurdles facing large, premium-financed policies. The figures are based on data gathered from state insurance regulators.
“Despite the decline in transaction volume and the steep drop in the value of policies settled, we’re still finding that providers are remaining upbeat about the market’s prospects,” said Donna Horowitz, Senior Editor for The Deal. “Money has begun returning to the market and multiple bids on fewer policies are driving policy values up.”
Highlights from the report include:
- Overall, the number of transactions declined by 11.8% to 1,187 in 2012 from 1,346 in 2011.
- The total face value of policies sold declined to $2.12 billion from $5.06 billion.
- Top five settlement buyers:
- Coventry First remained the largest life settlement provider. Policies it purchased had an average face value of $659,000 each in 2012, compared with $3.79 million in 2011. Coventrybought 597 policies in 2012 for a total of $72.4 million.
- Magna Life Settlements, Inc. of Austin, Texas, was the second largest provider with 85 transactions. This represented a decline of 21% from its 107 transactions in 2011. It paid$24 million for $209.2 million in death benefits in 2012, compared with $22.9 million for$194.3 million in face value in 2011.
- Legacy Benefits, LLC of New York was the third-largest buyer with 54 transactions. Legacy’s business tripled in 2012, as far as transaction volume. Its 54 settlements compared to 18 in 2011. It paid $10.2 million for $41 million in face value in 2012 compared to $3.77 million for $29.9 million in face value the year before.
- Settlement Group, Inc. of St Mary’s, Ga. was the fourth-most-active buyer with 53 transactions, up 26% from 2011. The firm paid $24.7 million to sellers representing $149.7 million in face value.
- Life Equity, LLC of Hudson, Ohio was the fifth largest provider with 50 transactions, 22% more than in 2011. It paid $12 million for $137.7 million in face value.
The full report is available online.
About The Deal
The Deal, a business unit of TheStreet, has been serving corporate dealmakers, advisers and institutional investors the most sophisticated analysis of the deal economy since 1999. Our transaction information service, The Deal Pipeline, is powered by a newsroom of senior journalists who offer proprietary research and reporting across M&A, bankruptcies, auctions and financings. It includes a breaking news service, First Take; daily and weekly sector newsletters; The Daily Deal, a 2x daily report of the day’s top stories; a research center with over a decade’s worth of intelligence and a database of over 100,000 deals; and an iPad app. Our marketing & media services group produces the industry’s leading forecasting event, The Deal Economy, held annually at the NYSE in addition to industry webcasts and integrated marketing programs.