No one in business ever wants to come face to face with the reality -- perceived or actual -- that their primary business is drifting helplessly down a river toward extinction.
Some may hear whispers and immediately jump ship to swim toward other markets. Others will be skeptical of a market's predicted demise and cautiously stay the course while still others will outright disagree with the viewpoint and counter that the market in question is not, indeed, in any imminent danger whatsoever. Damn the torpedoes! Full speed ahead!
The market in question is life settlements -- a segment that arguably took the hardest hit in the insurance industry during the economic crisis thanks to evaporating capital that all but dried up the secondary market in late 2008 well into 2009.
Still, life settlements experts quoted in the October 2009 issue of Life Insurance Selling expressed optimism for the future of life settlements, citing a "market cleansing" as a result of the downturn, capital starting to flow back into the marketplace, and increased public awareness of the secondary market as a viable option to get the most out of a no-longer-needed life insurance policy.
This month, we'll expose our readers to a much darker viewpoint -- that of David Dorr, founder and president of Miami-based Life-Exchange, Inc., a pioneer in the development of auction and trading solutions for the life settlement marketplace as well being a news and data resource center.
Dorr told me he knows the conclusions in his article, "Is the life settlements market dying?" will not be what many readers want to hear. Not to take a line out of context -- and do I hope you will read his entire article -- but Dorr states at one point: "We believe that there may be some spurts of capital to come into the life settlements market this year, but within 24 months the entire market will dry up." He believes what he's saying and can make a persuasive case. Dorr said he is constantly asked by agents who are his clients to explain what's happening in the life settlements market. He said many -- who are used to being told what they want to hear -- are dismayed by his response, but says they appreciate his candor.
While it is not my intention to either take Dorr's conclusions as gospel or dismiss them entirely, I do believe it presents a great opportunity to encourage a dialogue of this issue among interested readers. Whether or not you agree with Dorr's outlook, I want to encourage you to enhance the discussion by posting a comment at the end of his article.
