Amrita: Life Settlements Continue Slide

–The number of policies for which life settlement providers chose to tender offers decreased.

This growing imbalance of supply and demand is an example of the persistent illiquidity in the current life settlement marketplace, the company says.

The expected internal rate of return sought by institutional buyers is reflected in their purchase offers. As the targeted IRRs and returns on investment go up, the life settlement purchase prices go down. For the first time since the Amrita began its index, the expected IRRs are trending upward.

This increased purchasing power by buyers suggests a decline in competition for policy acquisition and looser demand in general for life settlements, Amrita says. Life settlement provider buying requirements remain conservative but are unchanged across all survey respondents.