Transferring legacy books of business

Legacy business in insurance companies can create a drag on performance and soak up capital. With the ever-greater focus on capital, risk management and resources, it is no surprise that the market for the sale and management of run-off is as lively as ever. In run-off, the owner of the book of business is likely to be concerned with the reputational risk associated with the treatment of its legacy business, not only with insureds and brokers but, importantly, also regulators.

This article examines the primary ways in which (re)insurers deal with their run-off—internally (or externally) managed run-off, reinsurance and sale—and reviews potential, upcoming changes in the run-off market and regulatory landscape.