A report from Boston-based Aite Group LLC sees moderate growth potential for the life settlements industry in face of a constrained capital environment and decreased taste for innovative financial products brought on by the credit crisis.
Authored by Aite Group Senior Analyst Clark Troy, the 58-page report says the industry is in need of technical innovation, with difficulties in estimating the life expectancies of the insured also causing uncertainties. Nonetheless, Aite Group estimates that the life settlements industry will recover from a sub par 2009 to transact approximately $13 billion annually from 2010 to 2013.
"As a non-standardized institutional financial services market, the life settlements industry supports a rapidly changing ecosystem of technology vendors and service providers," Troy says. "Best practices and delivery paradigms for service providers have not solidified. Service providers are competing vigorously to establish pre-eminence, and position themselves for various industry growth scenarios."
The report also profiles 19 vendors, noting the settlements market recovery will provide opportunities for savvy, well-positioned technology and service providers as the vendor landscape evolves and rationalizes.