Life Settlement Index Recap - March, 2010 Data

The Amrita Life Settlement Index posted its March 2010 data pointing to a continued slide in demand for life insurance policies on the secondary insurance market. The index showed a steep drop of 28.6%, from 455 points to 325 points. The results showed the index dropped 130 points from last month on increasingly conservative buying activities and sentiments from life settlement providers.

Driving the index’s decline were a myriad of bearish market factors. The number of insurance policies received by life settlement providers for purchase consideration increased in March. Conversely the amount of policies for which life settlement providers chose to tender offers decreased. This growing imbalance of supply and demand exemplifies the persistent illiquidity in the current life settlement marketplace.

The expected Internal Rate of Return or IRR sought by institutional life settlement buyers is reflected in their purchase offers. As the targeted IRR’s and returns on investment go up, the life settlement purchase prices go down. For the first time since the Amrita Life Settlement Index’s inception, the expected IRR’s are trending upward. This increased purchasing power by buyers suggests decreased competition for policy acquisition and slacking demand overall for life settlements. Life settlement provider buying parameters remain conservative but are unchanged across all survey respondents during the latest month's data collection period.