Further exit activity expected in European run-off sector: PwC

The European non-life insurance run-off sector is set for further restructuring and exit activity over the next three years.

This is according to PwC’s report, Unlocking value in run-off, which was released during Monte Carlo Rendez-Vous.

Within the report, PwC noted that over three quarters of respondents to its 10th annual survey of discontinued insurance business in Europe expect to engage in exit or restructuring activity by 2019.

The report predicted that sales of legacy liabilities to specialist run-off acquirers and group restructurings through business transfers will be the key tools to unlocking value for owners of run-off business.

According to PwC, the past twelve months have been extremely busy in the market and this is only expected to continue.

Over 80 percent of respondents also predicted that Europe will see more than ten disposals of legacy business portfolios over the next two years, with 20 percent predicting more than thirty such disposals.

More than two thirds of respondents estimated the most commonly disposed portfolio of liabilities will be between €11 million ($12.4 million) and €100 million.

Andrew Ward, director in PwC’s solutions for discontinued insurance business team, said: “Europe’s run-off market has had an exceptionally busy year and the transaction environment continues to thrive.

“Board level engagement on legacy business is still a challenge for Continental European insurers in particular, but the volume of deals we have seen in the UK and to some extent on the Continent shows that legacy is in the spotlight for many re/insurers.”