Structured settlement primary market annuity sales increased by $115,881,836 (approximately 2%) to $5,250,262,691 in 2014 compared with $5,134,380,855 in 2013 according to industry estimates compiled and recently distributed by Melissa Evola Price. Total 2014 structured settlement cases also increased to 26,572 from 26,533 a year earlier for an average case premium of $197,586.
The 2014 annual premium totals, however, still fall substantially short of the historic 12 month industry high ($6,226,578,725 in 2008) after consistently averaging close to $6 billion annually from 2001-2007.
Adding these 2014 results to historic U.S. structured settlement totals, S2KM estimates the following primary market metrics from 1976 thru 2014:
- Total annuity premium: $144.75 billion.
- Total structured settlement cases: 828,600
- Average annuity premium: $174,700.
Berkshire Hathaway, which re-entered the structured settlement market in 2011 following a multi-year hiatus, continued its recent primary market leadership in 2014 by generating $1.424 billion of structured settlement annuity premium (28% of the industry total) during 2014. Evola Price's report did not indicate how much of Berkshire Hathaway's premium was attributable to reinsurance and/or non-qualified structured settlement sales.
The U.S. structured settlement market now consists of eight annuity providers which are members of the National Structured Settlement Trade Association (NSSTA). 2014 sales results (rounded in millions) for the seven other structured settlement annuity providers (per Evola Price's report) plus the rounded percentage increase (+) or decrease (-) from comparable 2013 results:
- MetLife: $868 MM (+20%)
- Pacific Life: $773 MM (-9%)
- Prudential: $712 MM (+30%)
- Liberty Life $608 MM (+9%)
- Amgen: $477 MM (-19%)
- New York Life: $312 MM (+13%)
- Mutual of Omaha: $46 MM (-47%)
Evola Price's 2014 compilation also reports an annual increase in annuity premium for non-qualified structured settlement assignments (from $164.9 million in 2013 to $182.3 million in 2014) as a portion of the overall structured settlement numbers. Non-qualified assignments represent transfers of periodic payment obligations that do not meet the requirements of IRC sections 130 and 104(a)(1) or (2) including deferred attorney fees.
Although Evola Price's report does not indicate the percentage of structured settlement premium and/or annuities attributable to workers compensation Medicare set-aside (WCMSA) cases, WCMSAs have become an increasingly important submarket for structured settlements. S2KM has previously estimated that as much as eight (8%) percent of recent structured settlement premium and 24 percent of recent structured settlement annuities are attributable to WCMSAs.
Evola Price's reports do not provide information about the structured settlement secondary market. Based upon interviews with secondary market experts in 2012, S2KM previously estimated 2012 structured settlement secondary market activity to be:
- 12,000 secondary market transfers - with less than 120 contested by annuity owners and/or providers.
- $360 million of total secondary market purchases (money paid to transferors).
- $30,000 average individual transfer.
Industry opinions differ as to secondary market sales growth during 2013 and 2014 ranging from no growth to 7% growth per year.
Accepting those 2012 secondary market estimates and assuming level secondary market sales during 2013 and 2014, S2KM estimates historical 1986-2014 structured settlement secondary market metrics as follows:
- Approximately 160,000 structured settlement transfers have occurred since 1986;
- Involving approximately 80,000 recipients - many of whom have made multiple transfers;
- With approximately $5.1 billion PV in aggregate sums paid to those recipients.
- For an average of approximately $32,000 per transfer.
For related S2KM reporting about structured settlement 2014 developments, see: