It was announced this morning by Eric Carpenter, assistant vice president at Settlement Solutions, that effective January 26th Mass Mutual would be closing down the new business operations of it's Charlotte, NC office. They will continue to honor lock in cases until May 31, 2007 and will continue to service and manage all of it's existing in force business and contracts.
As I mentioned several times last year after Genworth Financial withdrew from the market, that it had become obvious that the settlement business is in a period of contraction and consolidation, with most of our competition coming from outside financial experts, who are encouraging people to cash out settlements as opposed to structuring. Also, with the end of approved lists of life markets at the big casualty companies, and the steering of premium that created, most life markets must compete on price alone now, and if you aren't consistently in the top 3 or 4 on price, you are going to have a brutally difficult time getting enough premium in on a consistent basis. Mass Mutual is a quality company, which makes the vast majority of it's income on it's traditional whole life and estate planning sales, and with the change in CEO's last year, have been engaged in a company wide review of operations to determine where best to deploy capital and human assets. Obviously, Mass Mutual, like Genworth ran the numbers and decided there were greener pastures elsewhere in the company and the Settlement Solutions office, unfortunately, was closed.
I should mention, that the Mass Mutual Trust Company does remain open and active in the trust and planning side, so if those of you with cases being managed by MMTCO should expect no changes, and by all indications that part of the operation is growing and doing well. I've used them on several cases and found them to be an excellent group to work with.
So, we bid farewell to some good men and women in the Charlotte office. I can say in the industry that some of the brightest, most capable and service oriented professionals I've met in the last 20 years, were part of Settlement Solutions and i'm sad to see them go. Hopefully they land on their feet elsewhere and continue to prosper.
Now, time for another prediction. Contraction in the structured settlement markets is not yet complete, and there will be at least one more casualty before this current round of consolidation is finished. Clearly, the companies don't like the growth prospects of this market as it is currently configured, and if we as professionals don't find a way to get it growing, we can expect further shrinkage.