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 hav