PwC recently released its 2025 Global Insurance Run-Off Survey. The annual publication examines deals in the run-off sector in the prior year and presents survey data and responses from industry professionals on what they are seeing and expecting in the run-off insurance market. While the publication covers the globe, it applies heavy emphasis to the North American legacy insurance run-off market and deal activity. After a drop in legacy deal volume in 2023, PwC reports a 50% increase in such activity in 2024 in North America but relatively few deals in 2025 so far.

More interesting to me are the discussions on mature and emerging latent injury risks in the U.S. run-off sector and on the state of medical evidence, impacted coverage periods, and coverage triggers for each. Latent mass torts are extending the “tail” of the run-off liabilities, making run-off transactions even more attractive to some insurers. PwC snapshots these issues for two emerging risks in particular: per- and polyfluoroalkyl substances (PFAS) and head injuries.

PFAS Uncertainties

Respondents indicate that PFAS risks will require new actuarial and reserving techniques that recognize the unique challenges of PFAS liabilities. Regulations are tightening (the EPA recently decided to keep the CERCLA designation for perfluorooctanoic acid, PFOA, and perfluorooctanesulfonic acid, PFOS) and PFAS-containing products are used in many industries. Nevertheless, there is still strong interest in run-off deals even if they include PFAS. Per PwC, 55% said they would consider amending the structure of such deals to incorporate exclusions or sub-limits for PFAS, and another 34% suggest they would increase the risk premium in their bids for such business. Only 3% of respondents said they would no longer consider these portfolios.

Head Injuries Emerging

Interestingly, PwC also chose to highlight head injury litigation in its report, noting claims against the NFL in the U.S. and rugby and football (soccer) leagues in the U.K. and Europe. The focus seems to be on sports’ governing bodies, and the claims may impact public liability policies, among others. Many From a personal perspective, I know many parents who are also very concerned about the possibility of head injuries in other sports, such as lacrosse and wrestling.) PwC also speculates that frequency/severity models will be used to estimate exposures and the costs of claims.

Mechanisms for Run-Off Deals

The types of transactions used in this market continue to evolve over time. Loss portfolio transfers (LPTs) continue to be highly utilized in the space, but they do not necessarily provide finality. Insurance Business Transfers (IBTs), specifically those subject to Part VII of the 2000 Financial Services and Markets Act (FSMA), increased in the U.K. in 2024 and seemed to have rebounded after a lull in activity in recent years. However, U.S. policyholders still struggle to get sufficient and timely information on such transfers,  and  IBTs are still in the nascent stages in the U.S. given the challenges of more than 50 regulatory regimes to navigate. That said, Oklahoma has successfully enacted law that may clear a path for IBTs in the U.S., and Delaware is reportedly considering similar action.

Technological Optimism

As expected, PwC’s respondents are optimistic that recent advances in technology, particularly in generative AI, will help reserving models improve more quickly, make the deal process more efficient, and assist with quickly integrating data and processes post-close.

Importance of Run-Off Market

Perhaps the most consistent theme found in PwC’s report is the significant role that run-off deals and consolidators play in the insurance sector. Whether it be to remove the distractions of non-core businesses or exit geographic markets, run-off deals help active insurers manage their risks better.

KCIC Perspective

KCIC monitors this sector carefully because opportunistic or poorly managed run-off transactions can be disastrous for our clients. The lack of transparency surrounding some of these transactions can cause real issues years later when policyholders try to identify and secure coverage after latent claims arise; some may just give up if they can’t follow the trail. The efficiencies for active insurers are real and can result in benefits for all their policyholders, but businesses need to bring a skeptical eye to evaluating run-off insurance transactions and participate in the regulatory process when they are able.