Conning: Life Settlements May Affect Insurers, Reinsurers

Policyholders have settled enough life insurance policies to have a noticeable effect on some insurers and reinsurers, according to Conning Research & Consulting analysts.

Although life settlement companies have bought a relatively small number of policies, and volume has dropped in recent years, many of the policies already purchased are universal life policies with high face amounts.

“Our analysis of the targeted firms’ universal life experience indicates that we may well see a significant impact to either primary insurers or to reinsurers to the extent that the primaries have been able to reinsure the higher face amount policies,” analysts say in a report released by Conning, Hartford.