With live M&A activity in the re/insurance sector expected to rise this year, PwC anticipates opportunities in the run-off market through the carve-out of non-core portfolios, both pre- and post-transaction.
In a new report, PwC forecasted that 2026’s M&A activity will be shaped by a challenging rates environment, alongside persistent pressure on growth and earnings across the re/insurance market.
The firm recorded 42 publicly announced non-life run-off insurance transactions in 2025, up from 33 in 2024 and 31 in 2023. According to PwC, this increase was driven by an especially active Q4 2025, during which 14 transactions were announced.
“Despite this increase in deal numbers, estimated liabilities transferred were $5.4 billion, below the $6 billion to $8 billion range that has characterised the market in recent years,” the firm noted.
Rather than signalling a slowdown in overall market activity, this reflects a shift in the transaction mix, with a greater proportion of smaller deals being disclosed.
PwC added, “Approximately 70% of all publicly announced transactions had disclosed deal values. Around 40% of these transactions were sub-$50 million liability deals, underlining the levels of activity seen at the smaller end of the market.
“Capital relief was seldom cited as a key driver for these smaller transactions, with seller rationale more often noting operational simplification as a core motivation in disposing of non-core lines and portfolios.
“There was also significant activity in the $50 million to $250 million rang,e with a further half of fully disclosed transactions sitting within this price bracket.”
PwC noted that 2025 saw no publicly disclosed transactions in this bracket; however, discussions with market participants suggest deals of this size are expected to emerge in Q1 2026.
Overall run-off liabilities transferred during 2025 were bolstered by two significant transactions, each exceeding $1 billion.
North America remained a primary hub for legacy market activity, with 18 deals and $3.6 billion of disclosed liabilities. Engagement from re/insurers and corporates is expected to continue.
Meanwhile, activity in Europe increased substantially compared with the prior year, with seven deals in 2025 versus two in 2024.
“We expect momentum in Europe to continue into 2026, supported by increasing familiarity with legacy solutions across the region with market education initiatives, including events such as the IRLA Munich conference in October 2025,” PwC said.
Looking ahead, the firm concluded, “With a more challenging rates environment for the re/insurance market than in recent times, but continued pressure on growth and earnings, we expect to see increased live market M&A activity.
“The run-off acquirer landscape itself has looked more settled recently, but we continue to see interest from new entrants supported by fresh capital, which is expected to bring some further competition, primarily on the smaller and mid-sized deals.
“We also anticipate continued innovation in respect of transaction structuring by run-off market participants, including further use of prospective and hybrid underwriting structures.
“It will be interesting to see how traditional legacy players seek to compete or collaborate with other structured solutions providers in this space.”
In related news, last year, we hosted a roundtable discussion in partnership with global reinsurer Swiss Re, during which experts from across the market discussed trends, opportunities and challenges for the run-off world.
Held on May 12th, 2025, it was the first Reinsurance News Legacy Roundtable and featured 11 run-off market experts with broad experience on the seller and buyer side, as well as broking, legal, and advisory, all focused on further advancing the legacy marketplace.
