The legacy and retrospective reinsurance market is entering a new phase of maturity, driven by growing demand for capital optimisation, operational efficiency and increasingly sophisticated transaction structures.
That was the central message from this year’s IRLA Congress & Business Seminar, where industry leaders described a sector that is no longer simply responding to distressed or discontinued business, but increasingly acting as a strategic partner to re/insurers navigating reserve volatility, soft market conditions and long-term capital planning.
Kevin Gill, Chairman of IRLA, opened the session by outlining four themes shaping the market: continued evolution, innovation in transaction structures, sustained demand for core retrospective solutions, and a growing focus on operational efficiency.
Executives including Rebecca Wilkinson, Director at PwC UK; Jamie Saunders, Chief Underwriting Officer at RiverStone International; Dan Sanford, Managing Director, M&A at Enstar Group; Simon Hawkins, Group COO at Compre Group; James Dickerson, Head of Retrospective Reinsurance & Legacy Solutions at Lockton Re.
Steve Ryland, Managing Director ARCAS London & Global Head of Retrospective Solutions at Acrisure Re; Tom Booth, CEO of DARAG Group; Hannah Farrer Fisher, Director at Quest Group; and Jonathan Drake, Partner at DWF, shared perspectives on how the market is adapting to new demands from insurers and reinsurers globally.
A key focus throughout the discussion was the scale of the opportunity still available to the sector. Wilkinson noted that current estimates place the global runoff market at more than USD $1.1 trillion, while stressing that the market remains relatively young compared with the broader insurance sector.
She pointed to strong transaction activity through late 2025 and into early 2026, including increasing diversification across jurisdictions such as Australia, Canada and continental Europe. Despite consolidation among providers, she suggested the market continues to demonstrate resilience through operational discipline and stronger underlying business models.
Saunders said the rationale behind legacy transactions has evolved significantly in recent years. While the sector was once primarily associated with problematic or non-performing books, insurers are now increasingly using retrospective structures as tools for capital optimisation, earnings protection and strategic repositioning.
He also highlighted the growing prevalence of more complex and multi-jurisdictional transactions, alongside longer-term partnerships and follow-on business arrangements that are creating greater continuity between cedants and legacy providers.
Several participants noted that the market is becoming increasingly aligned with the live insurance sector, both operationally and commercially. Greater use of rated balance sheets, more collaborative claims arrangements and renewable structures are all contributing to a closer relationship between live underwriting and retrospective risk solutions.
Sanford described how innovation is broadening the market beyond traditional runoff transactions. Newer structures such as forward exit options and rolling capital solutions are allowing firms to respond more flexibly to insurers’ changing capital and reserve management requirements.
He also emphasised the importance of maintaining a solutions-focused mindset, noting that legacy providers can no longer rely solely on standard transaction structures if they want to continue expanding the market.
Dickerson said retrospective and legacy solutions are becoming increasingly important in supporting insurers through soft market conditions, particularly around M&A activity, reserve accumulation and long-tail volatility.
He highlighted how retrospective reinsurance is now regularly being used both before and after acquisitions to streamline portfolios, reduce operational distraction and support strategic growth initiatives.
Reserve volatility, particularly within US casualty business, remained a major theme throughout the discussion. Ryland noted that long-tail casualty deterioration and weakening workers’ compensation buffers in the US are continuing to drive demand for retrospective solutions.
He also pointed to increasing scrutiny from rating agencies, regulators and investors around reserve quality and capital planning, helping push retrospective structures further into the mainstream.
Booth offered a more regional perspective on the European runoff market, describing a sector that has become increasingly bifurcated between large-scale legacy consolidators and firms focused on smaller and medium-sized opportunities.
He said activity across parts of continental Europe continues to be driven primarily by discontinued business lines, failed business models and insurers seeking operational relief rather than pure capital optimisation.
Many smaller European transactions still resemble the traditional runoff market seen a decade ago, with firms disposing of non-core or underperforming books rather than pursuing broader balance sheet restructuring strategies.
At the same time, he noted that fewer active participants in that segment of the market has created opportunities for specialist providers with the expertise and operational infrastructure to manage niche portfolios and regional exposures.
Booth pointed to DARAG’s recent experience handling specialist business in Scandinavia as an example of how legacy firms are increasingly required to balance growth opportunities against concentration risk and operational complexity.
He also suggested that structured protection mechanisms and more sophisticated reinsurance arrangements are becoming increasingly important in allowing firms to manage volatility while continuing to participate in specialised runoff opportunities.
Hawkins said the overall market opportunity remains substantial, but argued that future growth will depend on the industry’s ability to adapt operationally as well as financially.
He highlighted the operational demands involved in executing legacy transactions and suggested that reducing complexity and improving efficiency will be critical to unlocking further growth across the sector.
Rather than simply increasing the volume of traditional runoff deals, Hawkins suggested the market’s next stage of development will come from expanding the breadth of solutions available and tailoring approaches more closely to insurers’ strategic objectives.
From a legal and regulatory perspective, Drake reflected on how much the market has changed over the past two decades. He noted that despite the increasing size and complexity of transactions, the legacy sector has remained comparatively collaborative compared with previous runoff cycles that were often dominated by litigation and arbitration.
He also pointed to growing regulatory engagement with legacy business, including developments in Europe around recovery and resolution planning and increasing focus in the UK on solvent exit planning frameworks.
Technology and operational efficiency were also recurring themes throughout the seminar, particularly around data infrastructure, AI and claims analytics.
Participants discussed how firms are investing heavily in data management and predictive technologies to improve claims insight, accelerate processes and support more efficient portfolio analysis. AI-enabled tools and automation are increasingly being viewed as central to scaling operations and improving transaction execution across the market.
Farrer Fisher said the sector remains in a strong position from a talent perspective, supported by expertise across actuarial, legal, investment, operational and risk disciplines.
She added that talent development, succession planning and broader access to technology-driven skillsets will remain important priorities as the industry becomes increasingly data-led and operationally sophisticated.
Collectively, the discussion reinforced the view that the legacy market is no longer operating at the margins of the re/insurance sector. Instead, it is becoming a more established and strategically significant component of insurers’ long-term capital, reserve and operational planning.
As pressure around reserve adequacy, capital efficiency and regulatory scrutiny continues to increase, participants suggested the role of retrospective and legacy solutions is likely to become even more embedded within the wider re/insurance market.
