A new PwC report on non-life insurance run-off deals has revealed that in Q1 2025, 8 acquirers publicly announced 11 deals, 9 of which disclosed transferred reserves totalling nearly $1bn, with the UK and Ireland dominating by accounting for 9 of these deals, reflecting the sustained momentum of legacy activity in the region after a strong 2024.
Deal activity across North America and the Rest of the World was reportedly subdued in Q1.
“That said, conversations with market participants suggest that pipelines remain healthy in these territories, with brokers broadly optimistic about legacy deal flow increasing during the course of 2025,” PwC explained.
As per the firm’s report, many re/insurers reported strong 2024 earnings and underwriting results, bolstered by robust capital positions, which have alleviated the need to optimise capital through legacy solutions.
Consequently, recent legacy transactions appear increasingly driven by strategic and restructuring considerations, rather than solely by capital relief.
PwC’s report continued, “As we predicted in our year-end 2024 market update, Lloyd’s legacy activity picked up notably in Q1 2025, with one loss portfolio transfer (LPT) and three reinsurance-to-close (RITC) transactions, which were the first public Lloyd’s RITCs since 2023.”
The firm also suggested that buyers of Lloyd’s portfolios in 2025 have navigated newly implemented, pre-transaction review and approval protocols, effective from 1 January 2025.
“This framework introduces additional scrutiny at the diligence stage, designed to enhance transparency and more closely align legacy oversight with that of the live market. Early market feedback on these additional compliance and reporting requirements has been positive, with no reported delays to transaction timelines. It will be interesting to observe how these requirements may influence the bidding landscape for deals going forward,” PwC added.
Elsewhere in the report, PwC noted that legacy opportunities brought to market are increasingly including greener underwriting years, as sellers seek to transact those years, which are often the most capital-intensive.
The firm stated that from the sellers’ viewpoint, these years may hold accumulated profits within reserves established during a hard market. However, buyers may view these years as riskier due to greater pricing uncertainty stemming from limited data.
“Despite buyers, sellers and intermediaries becoming increasingly creative and dynamic in deal structuring, pricing mismatches remain a persistent hurdle,” PwC added.
“As deal drivers continue to evolve with the turbulent global economy, capital release appears to be playing a less central role in deal motivation than at the height of the hard reinsurance market. Many of the deals in the UK appear to be driven with legal finality in mind, adding to wider restructuring activity. However, as we begin to see signs of the market softening, we expect capital optimisation will resume as a key driver of legacy deal activity,” the firm’s report concluded.
PwC’s 2025 Global CEO Survey also found that 54% of insurance CEOs are reportedly seeing efficiency gains in their employees’ time from GenAI, while 27% of Insurance CEOs and 36% of banking and capital markets CEOs said they have witnessed revenue increases from GenAI.
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