To achieve its growth potential in coming years, the life settlement industry must evolve its business model to better serve a fast-growing population of recipients of long-term care funded through Medicaid, according to the keynote speaker at the conference held for life settlement institutional investors on March 11.
Alan Buerger, CEO and founder of life settlement firm Coventry, issued this assessment at the 3rd Annual Institutional Investor Life Settlement Conference, held at the Harvard Club of New York City. The event was hosted by the Life Insurance Settlement Assocation (LISA).
"There is virtually no [newspaper] headline risk anymore, and we won't have headline risk unless we don't police the activities of those who act inconsistently with good business practices," he said.
Having achieved a measure of acceptance by life insurers and industry critics, however, the life settlement industry now confronts new challenges to achieving greater growth.
The increased liquidity needs to fund long-term care expenses of individuals eligible for Medicaid, Buerger said, comes at a time when more life insurers—Genworth, MetLife, Unum, among others—are exiting the market for the long-term care insurance.
To better serve long-term care recipients on Medicaid, Buerger envisioned the development of life settlement-funded trusts.