Market Overview

The RunOff Landscape

With margins under pressure and the cost of capital rising, insurance and reinsurance companies can no longer afford to allow so much capital and operational resource to be tied up in discontinued business.

With margins under pressure and the cost of capital rising, insurance and reinsurance companies can no longer afford to allow so much capital and operational resource to be tied up in discontinued business.

The move to Solvency II in the EU and comparable risk-based regulatory regimes in many other parts of the world is going to heighten the focus on run off by putting further pressure on capital and increasing the spotlight on areas of capital inefficiency. While some businesses may have been reluctant to seek solutions because of the perceived complexities, they are now going to come under intense pressure to act from analysts, investors and faster moving competitors.

The move to Solvency II in the EU and comparable risk-based regulatory regimes in many other parts of the world is going to heighten the focus on run off by putting further pressure on capital and increasing the spotlight on areas of capital inefficiency. While some businesses may have been reluctant to seek solutions because of the perceived complexities, they are now going to come under intense pressure to act from analysts, investors and faster moving competitors.

RunOff Priorities

Successful run off is a careful balance between the interests and perspectives of policyholders, insurers and regulators.

Distressed Asset Portfolios

As active partners with large institutional investors, RunOff Re.Solve identifies, carries out due diligence, acquires and manages distressed assets affecting insureds, insurers and reinsurers, captive owners and participants in securitized transactions and their counterparties throughout the world.

As active partners with large institutional investors, RunOff Re.Solve identifies, carries out due diligence, acquires and manages distressed assets affecting insureds, insurers and reinsurers, captive owners and participants in securitized transactions and their counterparties throughout the world.

Non-traditional sources of distressed assets include sidecar investors who want to cash out of their investment for a known loss (even though the loss has occurred there may be a dispute over the reserves needed to meet the loss payments). A corporate insured or a captive business may also have pledged collateral to secure an insurance or reinsurance obligation.

There is a growing interest in acquiring, packaging up and securitizing these assets, enabling the holder to release funds and rationalize their balance sheets. With the securitized instruments offering high yields and non-correlation with the financial markets, they are growing in popularity between both mainstream and alternative investors.

The due diligence, acquisition, management and monetization of legacy liabilities, and the ultimate release of trapped capital, are complex and specialized areas in which RunOff Re.Solve has a consistent record of success.

To find out more about RunOff Re.Solve’s distressed insurance asset acquisitions, click here.

Non-traditional sources of distressed assets include sidecar investors who want to cash out of their investment for a known loss (even though the loss has occurred there may be a dispute over the reserves needed to meet the loss payments). A corporate insured or a captive business may also have pledged collateral to secure an insurance or reinsurance obligation.

There is a growing interest in acquiring, packaging up and securitizing these assets, enabling the holder to release funds and rationalize their balance sheets. With the securitized instruments offering high yields and non-correlation with the financial markets, they are growing in popularity between both mainstream and alternative investors.

The due diligence, acquisition, management and monetization of legacy liabilities, and the ultimate release of trapped capital, are complex and specialized areas in which RunOff Re.Solve has a consistent record of success.

To find out more about RunOff Re.Solve’s distressed insurance asset acquisitions, click here.

Key Business Considerations

The timing, quality of structuring and efficient management of runoff resolution are all critical in determining the amount of value that can be released and realized.

The timing, quality of structuring and efficient management of runoff resolution are all critical in determining the amount of value that can be released and realized.

The key considerations come down to five main questions:

  • “How do I maximize and extract the value associated with the discontinued business?”
  • “How do I reduce my risk of future loss?”
  • “How do I bring this run off to a close in the least amount of time, with the least amount of management distraction and at the most reasonable cost?”
  • “How do I preserve – and even enhance – my business reputation in the process?”
  • “How can I find third party capital to monetize my exposure to distressed insurance/reinsurance assets?”

RunOff Re.Solve offers the ability to bring all these priorities together in a way that maximizes value for the insurer and reinsurer while being equitable and agreeable to policyholders, regulators and other stakeholders.

See our perspectives on the latest market developments on Twitter and LinkedIn.

The key considerations come down to five main questions:

  • “How do I maximize and extract the value associated with the discontinued business?”
  • “How do I reduce my risk of future loss?”
  • “How do I bring this run off to a close in the least amount of time, with the least amount of management distraction and at the most reasonable cost?”
  • “How do I preserve – and even enhance – my business reputation in the process?”
  • “How can I find third party capital to monetize my exposure to distressed insurance/reinsurance assets?”

RunOff Re.Solve offers the ability to bring all these priorities together in a way that maximizes value for the insurer and reinsurer while being equitable and agreeable to policyholders, regulators and other stakeholders.

See our perspectives on the latest market developments on Twitter and LinkedIn.