In contrast, deal activity across North America and the Rest of the World was relatively subdued in Q1. That said, conversations with market participants suggest that pipelines remain healthy in these territories, with brokers broadly optimistic about a pickup in legacy deal flow during the course of 2025. Many reinsurers reported strong 2024 earnings, bolstered by stellar underwriting results and robust capital positions, which may have reduced short-term pressure to optimise capital through legacy solutions. Consequently, recent legacy transactions appear increasingly driven by strategic and restructuring considerations, rather than solely by capital relief.
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 – the first public Lloyd’s RITCs since 2023. Buyers of Lloyd’s portfolios in 2025 have also navigated newly implemented pre-transaction review 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.
Challenging Dynamics in Legacy Deals
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. From the sellers’ perspective, these years may contain profit built up in reserves set during a hard market. Conversely, from the buyers’ perspective, these years may introduce greater pricing uncertainty due to limited data. Despite buyers, sellers and intermediaries becoming increasingly creative and dynamic in deal structuring, pricing mismatches remain a persistent hurdle.
There has also been an uptick in diversified portfolios coming to market (for example the DARAG/Wefox Group transaction and the Enstar/Atrium transaction in Q1), necessitating more robust due diligence from acquirers. These portfolios are rarely mono-line and often include emerging risks that challenge traditional pricing methods.
As deal drivers continue to evolve with the turbulent global economy, capital release appears to be playing a less central role in deal motivation compared to 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. This in turn, is resulting in an uptick in Part VIIs.
| Acquirer Group | Target / Target Group | Predominant Territory | Type of deal | (Re)insurer/ Lloyds/ Captive/ Corporate | Predominant class of liabilities |
|---|---|---|---|---|---|
| Carrick Group Limited | Undisclosed | UK & Ireland | Undisclosed | Undisclosed | Undisclosed |
| DARAG Group | Wefox Group | Continental Europe | LPT | (Re)insurer | Motor Damage, Third Party Liability, Private Liability and Property |
| DARAG Group | Soteria Insurance Limited | UK & Ireland | LPT | (Re)insurer | Disease Asbestos Portfolio |
| Enstar (Syndicate 2008) | Atrium Syndicate 609 | UK & Ireland | LPT | (Re)insurer/Lloyd's | Marine Treaty Reinsurance, Property Treaty Reinsurance and US Contractors General Liability |
| Hampden Group | Telent Limited | UK & Ireland | Insurance solution | Corporate | Industrial Disease Liabilities |
| Marco Capital (Syndicate 1254) | Coverys Syndicate 1975 | UK & Ireland | RITC | Lloyd's | Medical Professional Liability |
| Quest Group | Pinnacle Insurance Plc | UK & Ireland | Part VII | (Re)insurer | Motor (including warranty and GAP) and Household business |
| RiverStone International | Undisclosed | UK & Ireland | RITC | Lloyd's | Undisclosed |
| RiverStone International | Pacific Valley Insurance Company | North America | LPT | (Re)insurer | Commercial Auto Liability |
| RiverStone International (Syndicate 3500) | Hampden Risk Partners (HRP) Syndicate 2689 | UK & Ireland | RITC | Lloyd's | Undisclosed |
| Swiss Re | Ageas | UK & Ireland | LPT | (Re)insurer | Commercial Lines |
GenAI in Legacy
AI is beginning to play a more visible role in the insurance space, particularly in streamlining due diligence and opportunity triage. PwC is testing products such as AI-driven data room summarisation and claims management and assessment tools to enhance claims management efficiency, empower claims handlers by reducing the manual review burden and drive more consistent claims outcomes. While adoption is still in its early-stage, particularly in the legacy market, these capabilities have the potential to sharpen bid decisions and improve efficiency - especially for complex, multi-line portfolios. The legacy market needs to act swiftly to ensure it keeps up with the live market. For further information or a demonstration of the tools PwC has developed, please get in touch.
Tariff Disruption
The US administration’s April 2025 tariff announcements have introduced macroeconomic headwinds, particularly for insurers with transatlantic exposure. Claims inflation is likely to emerge in key lines such as motor and property due to increased repair costs, while discretionary personal lines, such as travel, are facing demand pressures. Where challenges exist, so do opportunities and we are currently supporting a new, unique re-insurance proposition aimed at delivering significant regulatory capital relief to Corporate captives whose parents may be feeling the impact of these headwinds.
With London Market business exposed to the US, insurers are bracing for potential knock-on effects from disrupted supply chains, volatile investment returns, and dampened infrastructure investment. Pricing recalibration and supply chain diversification are emerging as key strategies for managing this volatility, and it will be interesting to see how this flows through to the legacy market. For further insight on the US tariff uncertainty for insurers, please see PwC UK’s recent article: Global Trade Redefined: Insurance.
We look forward to speaking with many of you at the IRLA Congress in May, where we will also be releasing the questions for our latest iteration of the Global Insurance Run-Off Survey 2025.
1 We have taken gross liabilities where disclosed, and where these are not we have used net liabilities as a proxy figure.
How we can support our clients
The non-life insurance run-off deals team has access to more than 200 specialists who can provide expert support throughout the deal lifecycle, including:
- Strategic options analysis and deal feasibility studies – utilising our global network and outreach and transactions service capabilities
- Transaction structuring advice – through our specialist market knowledge and wealth of experience, we know what acquirers want to see and how they interpret data, allowing us to pre-empt questions to provide a smooth transaction process
- Actuarial support – pre-deal and throughout the deal including pre deal analysis and pricing, reserving and capital optimisation and negotiation support throughout the deal
- Bidder identification and running of sales processes – we have detailed project management methodology to run tightly controlled and efficient disposal transactions
- Commercial, financial, regulatory, and tax due diligence – we bring unrivalled technical expertise to the transactions process and can leverage this every step of the way to add value to deals to the satisfaction of all stakeholders
- Financial & Tax structuring – we can integrate specialist services into our offering to support both the transaction and how it best fits into your business and operations
- Post-transaction support – supporting migration and separation post deal, we also offer managed service and outsourcing options to our clients
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