Legacy and runoff: allowing insurers to refocus.

The efficient management of run-off portfolios enables insurers to put all their focus on live business.

The efficient management of run-off portfolios enables insurers to put all their focus on live business. Pro’s Group Head of Claims Richard Lawson shines the light on this vibrant and valuable sector.

Sometimes the run-off / legacy insurance sector seems to make headlines for all the wrong reasons: when an insurer goes into administration, or stops writing a line of business, the headlines often include words like “failure”, “market exit” and “closure”.

 

Fair enough, but we feel our corner is a glamorous corner of the re/insurance market, and we absolutely reject any notion that legacy is bad news.

 

In fact, taking a proactive approach to the management of legacy and run-off liabilities by combining deep expertise in legacy claims management with specialist claims technology can free up millions in reserves and help insureds receive claims payments more efficiently.

 

The real headline is that the estimated value of non-life runoff liabilities in 2019 US$800 billion, according to the 2019 PWC runoff survey – and this figure looks set to grow further in 2020. A proactive approach to the management of these liabilities can significantly improve an insurer’s capital position and bottom line.

 

Pro has over 35 years of expertise managing complex legacy portfolios for some of the world’s largest insurers, and our team is trusted around the world with the reputation of leading brands as we efficiently manage large historic claims.

 

With current legacy liabilities under management of over £7 billion, Pro is the only full service legacy provider – allowing you to put your focus back on live business. Get in touch to find out more.

 

 

BOX STORY

 

The terms Legacy and runoff are often used interchangeably, but do describe different aspects of the orderly closure and effective capital management of a book of insurance business.

 

Legacy: refers to older long-tail portfolios, often with 30-40 year claims horizons. Typically managed by carriers who continue to write the same business today.

 

Runoff: refers to discontinued business – i.e. a closed book of insurance business with no live policies sold. This could be because the business in question has gone into administration, lost a client, or otherwise ceased trading.

 

Legacy liabilities are transferred or acquired in run-off transactions, allowing their original holders or underwriters to achieve finality on those books of business.

Richard.lawson@pro-global.com