Settlement Funding Companies in the US - Industry Market Research Report

Paid out: Rising interest rates and medical expenditure are set to benefit the industry

Settlement Funding Companies

The Settlement Funding Companies industry operates with a moderate level of market share concentration, with the three largest companies, The J.G. Wentworth Company (J.G. Wentworth), Oasis Legal FinanceLLC and DRB Financial Solutions LLC dominating the industry. Over the five years to 2019, these operators have achieved a firmer hold on the industry through various mergers and acquisitions. Although this industry has multiple major players, J.G. Wentworth has a significant lead over the second- and third-largest companies in the industry.

Brand recognition bolsters revenue

- The largest industry operator owns the most popular and recognizable brands within the industry, resulting in brand loyalty and a steady consumer brand. J.G. Wentworth, the industry's largest player, operates under the two most recognizable brands, Peachtree Financial Solutions and the J.G. Wentworth Company. The latter being so well-known due to vast advertising efforts that it controls nearly half of all market share concentration.

Consolidation helps boost wages and employment

- In recent years, large industry operators have further secured their market dominance by completing a series of mergers and acquisitions. For example, DRB Financial Solutions LLC (DRB) acquired Echelon Group to expand its liquidity solutions business to small and medium-sized businesses. As a result, the expansion of innovative and well-financed operators, such as DRB, has led to an increase in industry wages and employment.

Key talent retention and discount rates drive internal competition

- Large and small operators compete heavily on the basis of the ability to offer a broader range of discount rates. Industry operators seek to purchase structured settlements at attractive discount rates, with rising interest rates harming an operator's ability to finance the purchase of these assets. Additionally, given the relatively small number of employees in the industry, retaining knowledgeable and experienced talent is an important basis on which industry operators compete.

This industry purchases structured settlements in the secondary market from individuals, providing customers with cash in exchange for several fixed scheduled future payments. Industry operators also transact with plaintiffs with pending personal injury claims to provide funds while they are awaiting settlement, earning a portion of the settlement proceeds of the claim.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.