Posts tagged #Berkshire Hathaway

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

Symetra Life Insurance exits the structured settlement market

Well, I've been predicting for the better part of a year that the structured settlement market would see at least one, and possibly two, life markets head for the exit and yesterday the second shoe dropped, with Symetra following Hartford Financial's decision to shut down their structured settlement operations several months back.

Symetra Life Insurance Company, previously known as SAFECO Life, was one of the pioneers of the structured settlement industry and was for decades an incubator of some of the top management talent and innovative thinking during it's hey day. However, with the continued consolidation of the structured settlement market into a few large life insurance companies as the major players, the continued viability of a modest sized, A rated life company in such a business environment was in some peoples eyes, destined to exit at some point. 

Symetra Financial exits the Structured Settlement market effective December 14th, 2012

Symetra Financial exits the Structured Settlement market effective December 14th, 2012

While on the face this would appear to be a net loss for the profession, the unique relationship that Symetra Financial has with Berkshire Hathaway will, according to the letter to agents, allow the marketing and administrative team at Symetra to remain intact and concentrate on expanding Berkshire Hathaway's market share in the structured settlement market. Good news for the staff and administrators at Symetra who include some of the most experienced and highly regarded professionals in the structured settlement profession, as well as good news for Berkshire in that this group can now fully focus on one market and company.

It also resolves a lingering issue for NSSTA in that Symetra, despite being one of the oldest and most productive members of the structured settlement profession, was removed from membership in the trade association due to the corporate parents involvement in factoring transactions through a subsidiary. Does this now mean that Mal Deener, as past NSSTA President, will no longer be persona non grata at NSSTA meetings? Hopefully so.

The last day to submit premium is December 14th, 2012, after which Symetra Financial will continue to service all current contracts and handle policyholder requests.

Posted on November 13, 2012 .