Compared with prior years, total United States structured settlement annuity premium dropped sharply in 2011 to $4,974,710,838 according to a newly released report by Melissa Evola. Evola, President of Structured Financial Associates, Inc., has tracked structured settlement industry sales since 2002 based upon input from life insurance companies that participate in the structured settlement market.
The 2011 structured settlement annuity premium total represents an approximate 10 percent decline from 2010 and an approximate 20 percent decline from 2008. Evola's report further indicates 28,811 structured settlement annuities were sold during 2011 for an average per case premium of $172,667.
Based upon Evola's report, MetLife and Prudential Life were the leading structured settlement annuity providers in 2011. Their combined structured settlement premium of $2,119,300,000 represented approximately 43 percent of total 2011 U.S. structured settlement sales. According to Evola's report, 12 life insurance companies comprised the U.S. structured settlement market in 2011 compared with 22 companies in 2002.
Evola's report also tracks "non-qualified" structured settlement sales which are included in her total structured settlement premium figures. Structured settlements that are non-qualified [under IRC sections 130 and 104(a)(2)] are utilized to defer future payments from immediate income tax. Only two annuity providers currently offer this product. Total non-qualified structured settlement annuity premium in 2011 was $119,513,424, according to Evola's report, compared with $123,532,247 in 2010 and an historic high of $192,501,540 in 2008.
Historic annual U.S. structured settlement annuity premium - as reported by Evola:
- 2011 - $4,974,710,838
- 2010 - $5,524,359,408
- 2009 - $5,383,998,395
- 2008 - $6,226,578,725
- 2007 - $5,998,277,764
- 2006 - $6,111,583,112
- 2005 - $6,125,251,601
- 2004 - $6,135,000,000
- 2003 - $5,965,000,000
- 2002 - $6,142,000,000
For estimated structured settlement annuity sales estimates from 1975-2011, see the structured settlement wiki which features estimates from the authors of "Structured Settlements and Periodic Payment Judgments" (S2P2J) based upon historical input from industry sources including Evola since 2002.
Many structured settlement industry participants attribute declining sales to low interest rates including future forecasts by the Federal Reserve. Market yields on U.S. Treasury securities at 30 year constant maturity peaked at 13.45 percent in 1981 according to reports published by the Board of Governors of the Federal Reserve System. Here are several historic average annual rates for 30 year Treasury securities based upon the same information source:
- 2011 - 3.91%
- 2010 - 4.25%
- 2009 - 4.08%
- 2008 - 4.28%
- 2007 - 4.84%
- 2000 - 5.94%
- 1990 - 8.61%
- 1980 - 11.27%
Although interest rates represent an important investment consideration, they impact all investment products not just structured settlement annuities. Regardless of interest rates, many other factors, such as mortality risk transfer and relative financial security, favor structured settlement annuities as the core settlement planning product for many personal physical injury victims. For additional information about structured settlement product suitability standards, see the structured settlement wiki.
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