Global non-life run-off reserves surpass $1 trillion milestone

Global non-life run-off reserves have reportedly surged past the $1 trillion mark for the first time. 

According to the latest research by PwC UK, the total reserves for non-life run-off now stand at $1.014 trillion, marking a 6% increase since the last survey conducted in September 2022. 

2023 witnessed a flurry of activity in the non-life run-off arena, with a total of 30 publicly announced transactions recorded. These deals amounted to an estimated combined gross reserves transfer of $8.1 billion to legacy market participants. There has also been growth observed in the UK and Ireland, where estimated gross liabilities transacted more than doubled in 2023 compared to the previous year. 

PwC’s survey respondents identified general liability, motor, and financial and professional liability as the top three most attractive lines of business within the non-life run-off sector. 

Rebecca Wilkinson, corporate liability restructuring director at PwC UK, commented:

“The market has evolved significantly – from a focus on finality and removing underperforming business, to concentrating on capital relief and removing non-core lines of business. While we expect this to continue, many of the survey respondents we spoke to are confident that legacy activity will also be increasingly prompted by strategic restructuring.  

“We see a scenario emerging where the legacy market becomes a facilitator for value-creation strategies if M&A activity picks back up in the live market.” 

Despite fluctuations in deal volume throughout 2023, there is a trend towards fewer but larger transactions within the non-life run-off market. Sellers are increasingly prioritising deals that deliver capital relief at scale, reflecting a maturing market environment. 

Andy Ward, corporate liability restructuring partner, PwC UK, concluded:

“The legacy market continues to evolve. While deal numbers have reduced compared to prior years the same volume of liabilities have been transacted year on year, clearly illustrating a trend towards increased deal sizes. There is greater separation in the market as it matures and acquirers increasingly focus on their sweet spots ranging from deal size to liability type.

“We remain convinced that the market will continue its development and is better placed than ever before to support the live market in achieving strategic priorities such as efficiently releasing and redeploying capital and securely carving out non-core portfolios.”

Looking ahead, PwC UK anticipates continued momentum in the non-life run-off market, with respondents expressing confidence in the strong pipeline of global deals expected in 2024 and beyond. 

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Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.