The global market for legacy insurance, long regarded as an obscure niche, has ballooned into a trillion-dollar business. PwC’s Global Insurance Run-Off Survey 2025 estimates worldwide non-life reserves in run-off at US$1.129 trillion, an increase of 11 per cent since the last survey.
Run-off, the process of managing closed insurance portfolios once new business is no longer written, is increasingly being used to free up capital and reduce volatility. Instead of carrying old liabilities on their balance sheets, insurers can transfer them to specialist acquirers. For global players, it is no longer a last resort but a routine tool of capital management.
PwC highlights that the United States continues to lead activity, particularly in casualty lines where reserve strengthening has accelerated. “Casualty reserves have been strengthened across the market on account of adverse experience, especially from the 2013–2019 soft market underwriting years,” the survey reports.
In 2024, 33 transactions were struck globally, transferring US$6.6 billion of liabilities. A further 25 deals were announced in the first eight months of 2025. Most sat in the US$250 million to US$1 billion range, underlining how run-off has become a mainstream part of the market.
Connie Tregidga, Group M&A Director at Compre Group, summed up the evolution: “Creating bespoke solutions that go beyond solving for the immediate capital need is key for our clients. Transaction structures are increasingly including an element of renewal or future exit as we become the trusted capital partner with appetite for long tail reserve risk.”
The asbestos crisis of past decades gave run-off its reputation, but fresh challenges are emerging. PwC points to PFAS chemicals and sports concussion litigation as the most pressing new liabilities. Robert Reville of Moody’s warned: “The increased exposure to complex multi-defendant litigation has significantly extended the long tail of liability. In this environment, a robust legacy market is an increasingly vital resource for insurer risk management.”
The NFL has already paid about US$1 billion to more than 4,500 former players in concussion claims, and similar lawsuits are now appearing in rugby and football in the UK. With Australia’s own strong sporting culture and class action environment, insurers here will be watching closely.
Even this corner of the market is being reshaped by technology. More than 80 per cent of respondents expect generative AI to have a “moderate to significant impact” on due diligence and post-deal integration. Concerns remain, with 32 per cent citing data security risks and 21 per cent pointing to hallucinations.
Regulators are also paying closer attention. At Lloyd’s, stricter approval rules have been introduced for legacy transactions. Rachel Turk, Chief of Market Performance, defended the approach: “The new rules are not intended to suggest Lloyd’s is anti-legacy deals. The driver behind the new rules was to provide Lloyd’s with the assurance and oversight of what liabilities are flowing around the market.”
Publicly disclosed run-off deals in Australia remain limited. Domestic carriers have largely managed closed portfolios in-house, relying on traditional reinsurance for capital relief. But with the global market maturing, the option to transfer liabilities could become more attractive, particularly for insurers facing long-tail casualty risks and capital pressure under APRA’s prudential standards.
The survey’s authors describe the run-off sector with words like “stability,” “evolution” and “discipline.” For Australian insurers, the message is that legacy management is no longer a sign of distress. It is fast becoming a mainstream tool – one that could give local carriers greater flexibility as they navigate inflationary claims costs, regulatory oversight and an increasingly litigious environment.
