Aon plc expects Lloyd’s legacy transaction activity to accelerate as softer reinsurance conditions, rising M&A activity, and increased focus on historical risk management drive renewed demand for runoff solutions.
In its Lloyd’s Legacy Report – April 2026, Aon said the Lloyd’s legacy market has developed into a significant capital management tool, with the market’s five specialist reinsurance-to-close (RITC) syndicates - RiverStone, Enstar Group Limited, Premia Holdings Ltd., Compre Group, and Marco Capital Holdings - collectively assuming nearly $15 billion of reserves since 2010.
According to Aon, the expansion of dedicated Lloyd’s runoff capacity has improved pricing dynamics and execution options for cedants seeking to transfer historic liabilities.
While legacy deal activity moderated in 2024 and 2025 following strong underwriting results and relatively benign catastrophe experience, Aon said changing market conditions are likely to push carriers toward more active balance sheet management.
The broker noted that as pricing softens and capital discipline tightens, insurers typically take a closer look at underperforming or volatile legacy portfolios, particularly in long-tail classes such as US casualty and aviation.
Rob Margetts, legacy reinsurance broker at Aon, said legacy has evolved well beyond its traditional use as a remediation tool.
“The Lloyd’s legacy market has evolved from a specialist rectification solution into a mainstream tool for managing balance sheets, capital and earnings,” Margetts said.
Aon said more than three-quarters of Lloyd’s syndicates have yet to complete a legacy transaction, suggesting substantial untapped demand remains in the market.
At the same time, repeat sellers account for around two-thirds of reserves transacted since 2015, indicating that many carriers now use legacy solutions as a recurring capital management strategy rather than a one-off cleanup exercise.
According to the report, many cedants rebuild meaningful reserve bases within two to three years after a transaction, supporting repeat capital recycling and periodic portfolio optimization.
Aon added that Lloyd’s governance enhancements may further support market confidence. Since January 1, 2025, Lloyd’s has operated a Legacy Oversight Framework requiring additional review and approval processes for legacy transactions, including scrutiny of risk transfer, capital adequacy, operational capability, and concentration risk.
The broker said structural factors including continued carrier M&A, new market entrants, alternative capital participation, and product innovation such as forward exit options should support longer-term growth in the legacy sector.
Mike Cane, head of capital advisory UK at Aon, said insurers using legacy solutions proactively may be better positioned as market conditions evolve.
“With specialist capacity, governance and execution capabilities continuing to strengthen, insurers that use legacy proactively are well positioned to optimize capital, reduce volatility and maintain strategic flexibility as the cycle evolves,” Cane said.
