AEGON subsidiary Transamerica Insurance and Investment Group is looking beyond the primary life insurance market and into life settlements, according to the company.
The exact details of the venture have not been disclosed, and a company spokesperson declined to provide further details on how the company’s foray into the secondary life market would work. The spokesperson did, however, acknowledge that a legitimate need for life settlements exists in some parts of the market.
“While it’s too soon for us to respond to specific questions about our plans to enter the life settlements arena, we can state that there are some segments of the life settlements market in which we are interested and some in which we are not,” the spokesperson said. “We recognize the legitimate need of some individuals for life insurance settlement services and we wish to serve those needs.”
A similar sentiment can be seen in a message to Transamerica agents from company president Ken Kilbane dated this month.
“After studying the market for a number of years, we’ve decided it’s time for us to get into it,” he said. “With an absolute commitment to best practices, we believe this market will prove to be quite viable for you and Transamerica.”
In the “president’s letter” he noted that industry analysts have predicted rapid growth of the life settlements market, with some estimates claiming the market will double in size to roughly $30 billion in face value of policies sold during 2007.
“Clearly, it’s a rapidly growing market,” he said in the letter. “There are millions of potential customers who are looking for a fair settlement for policies they no longer need.”
Kilbane noted that abuses have taken place in the market, but also pointed to recent media coverage showing that life settlements are not inherently problematic, and that they can provide a benefit for policyholders.
The new business unit, which Kilbane said is being called the Transamerica Life Settlements Group, will be headed by James Duff, a senior vice president who has overseen the company’s Eastern Regional Marketing Center. “He has a solid understanding of distribution, and he has been analyzing the settlement market for some time,” Kilbane said in the letter, adding that Duff would report directly to him.