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Carlson, Increasing Awareness of Life Settlements

Carlson, Increasing Awareness of Life Settlements

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Published by: InsuranceStudies_ISI on Feb 24, 2010
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Media Brief 
Increasing Awareness of Life Selements
By Insurance Studies Instute (ISI), January 29, 2010in Collaboraon with The Carlson School of Management at the University of Minnesota (Carlson)
The industry is losing major market opportunies by its failure to communicate the value of life selements.
The Problem:
Exhausve research and surveying by Carlson School has indened shoralls in messaging employed to communicatethe “opon” of life selement to seniors. Low awareness and familiarity coupled with negave percepons and messages of non-value plague the life insurance secondary market’s (LISM) momentum, and are prevenng the LISM from reaching its potenal.
The Soluon:
Carlson has idened ways that LISM stakeholders can reposion their messaging and establish consistency. Thestudy reveals highly eecve strategies for developing messages that resonate with seniors.The maturaon of the life insurance secondary market has aracted considerable focus from regulators, legislators, and the media.There has not been a lack of opinions about “death investments.” What has been missing, however, is a well-constructed andconsolidated message from the LISM stakeholders. Consumers want to make educated decisions regarding the appropriateness of a life selement. Legislators and regulators need to make educated decisions to appropriately protect seniors and to assure theirrights to manage their nancial aairs. In the fall of 2009, Insurance Studies Instute (“ISI”) completed and published a report of the “Portrayal of Life Selements in Consumer-Focused Publicaons,” in which ISI noted the copious amounts of misinformaonand sensaonalized media arcles relang to life selements.Because the many LISM stakeholders have diverse movaons, messages communicated to the public have been varied andmixed. Messaging has been short-sighted, and too focused on each individual stakeholder’s parcular objecves. No singlestakeholder has successfully created a message based on what resonates most with the consumer, who has been le to decipherwhether or not life selements are a sensible opon based on mixed messages and exaggerated claims.Seeing a need for the LISM to more eecvely tell its story, ISI commissioned the Brand Management Enterprise team at theUniversity of Minnesota’s Carlson School of Management, in September 2009, to research and develop strategies to educate andraise awareness of consumers’ opons regarding life selements.
Carlson’s Surveying and Research Reveals an Industry in Markeng Disarray.
There is no consistency in how life selements havebeen posioned to seniors, and references to life selements portray them as everything from “a valuable resource for seniors” to“beng on death.” Current messaging is missing its mark. For example, the LISM oen aims to tout life selements by challengingthe credibility of insurance carriers and the wisdom of owning a policy. This message does not resonate with consumers for twopivotal reasons: rst, they know lile about the secondary market opon; and second, consumers do not want to feel like theymade a mistake when they inially purchased the policy from a trustworthy insurance carrier. No clear communicaon of valuehas been made to the consumer. In order to grow, the LISM must gain consumer acceptance. In addion to analyzing the diversityin posioning, the ndings also detail seniors’ decision-making processes and how these processes impact the LISM.
When a consumer embarks upon the life settlement process, often the only communication they receive is from their insurance agent or financial representa-tive. That person in turn brings that policy to the market, which is made up of many parties who assist in the completion of the transaction. A life settlementbroker works with the insured’s financial representative to receive bids from life settlement providers, who purchase policies for third-party investors. Medial un-derwriters assist in the process by providing life expectancy estimates so that the providers can determine the value of the policy. Other servicing firms includetracking agents, collateral managers, escrow agents, auditors, and information service providers. Together, these parties make up the Life Insurance SecondaryMarket (“LISM”).
“Portrayal of Life Settlements in Consumer-Focused Publications,” Insurance Studies Institute, 2010.

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