Private equity and Warren Buffet are betting big on structured settlements and fixed annuities

In this weeks commentary on Speaking of Settlements, Mark Wahlstrom looks at some recent news in the structured settlement and fixed annuity markets that seems to indicate that while some life markets are leaving the business, other big money, smart money players are moving in to the void.  

Is Private Equity the key to unlock the future of structured settlements?

Is Private Equity the key to unlock the future of structured settlements?

A recent article by Brendan Lynch in Life Health Pro magazine, link available, has the provocative title of " What does Warren Buffet know that you should?" This examination from the former President of Travelers Institutional Products division discusses how the structured settlement market is a highly attractive product line for many life insurance companies. It is more of a technical article that will be of interest to structured settlement professionals and industry professionals vs the general public.  

Of greater interest in the commentary is the surge of private equity interest, coupled with firms like Berkshire Hathaway, in the annuity business of many of the top writers of structured settlements, fixed annuities and equity index annuity product. The logical conclusion to be arrived at from all of this recent activity and the nature of the buyers is that private equity, much of it located off shore, is going to have greater investment, operational and strategic flexibility than traditional life markets. The result being that they hope for excellent gains and asset value increase in what they assume will be a world where the annuity product becomes a primary tool for the baby boom generation as they move to the retirement phase of their life cycle.  

Fascinating stuff, be sure to watch the video and watch for continuing coverage of the private equity interest in our once sleepy profession. You can learn more about Mark Wahlstrom, one of the nations leading experts in structured settlements, annuity funding and mass tort litigation administration at Wahlstrom & Associates