Run-off deal volumes halve in H1 2026, but PwC sees strong pipeline ahead

Why Run-off Deal Activity Slowed in the First Half of 2026

PwC's half-year review of the non-life run-off market shows 13 disclosed transactions in the first half of 2026, down from 23 in the same period of 2025, with an estimated $780 million of gross liabilities changing hands against $1.537 billion a year earlier. The slowdown was most pronounced in the second quarter, when just two deals were made public, carrying combined gross liabilities of roughly $50 million, compared with 11 disclosed deals involving five different acquirers in the first quarter.

The two publicly confirmed Q2 transactions were both captive-related. RiverStone Group completed the purchase of an undisclosed North American captive made up largely of workers' compensation exposures, while Swiss Re carried out a novation of a captive book in Continental Europe, adding to the four deals it had already announced in the first quarter.

PwC cautions against reading the headline decline as a cooling of the market. Public disclosures understate the true level of activity because many deals are private or still in progress, and longer timelines reflect growing complexity rather than fading appetite. The tally also excludes the roughly $4.8 billion of gross technical provisions expected to transfer to Enstar once its acquisition of AF Group completes, a transaction that would dwarf the disclosed figures.

Regulatory change adds another variable. The Prudential Regulation Authority and the Financial Conduct Authority are consulting on a new UK regime for captive insurers, a framework PwC expects to generate fresh deal flow in the UK and to have knock-on effects on captive arrangements based in other jurisdictions. PwC expects notable closes in the second half of 2026.

What the H1 Numbers Don't Show: PwC's Read on the Legacy Market

Why the H1 Headline Numbers Flatter the Slowdown

PwC's own framing matters here. The 13 disclosed deals and $780 million of gross liabilities are the visible portion of a market where much of the activity is private or still in negotiation. The clearest evidence is the scale of what is missing from the count: around $4.8 billion of gross technical provisions are expected to transfer to Enstar once its acquisition of AF Group completes, based on AF Group's most recent public filings. One pending transaction is roughly six times the value of all disclosed H1 deals combined.

The buyer list also shows continuity rather than retreat. Six acquirers were named in H1 2026 disclosures — Compre Group, Fara Recovery Affiliate, Quest Group, Riverstone Group, RiverStone International and Swiss Re — and Swiss Re alone has now been linked to five deals across the two quarters.

The UK Captive Consultation Could Redirect Deal Flow

The PRA and FCA are consulting on a new UK regime for captive insurers, and PwC expects that framework to act as a catalyst. The legacy market has long served as an exit route for captives and their parent companies, and a workable UK regime could bring activity onshore while pulling business away from other captive domiciles. The regulatory outcome is the single most concrete near-term catalyst in PwC's review — and the hardest to predict.

The Three Drivers PwC Sees Sustaining the Pipeline

PwC points to three forces that should keep supply coming: Lloyd's syndicates taking action on underperforming portfolios, continued uncertainty around casualty reserves and long-tail exposures, and the growing use of flexible structures such as forward flows and renewable covers. These sit against a softer underwriting cycle — particularly in property lines — and tightening reinsurance returns, a combination that typically pushes underperformers toward exit. Geographically, North America and Continental Europe led on deal count, while the rest of the world and North America led on disclosed value, with the UK & Ireland recording two deals with undisclosed liabilities and no further activity in Q2.

Where AI Fits Into the Legacy Market's Expansion

PwC's review also flags accelerating technology adoption across the sector. The firm says it is working with insurers and legacy market participants to embed AI into core processes and decision-making at scale, and expects providers able to model future reserve uncertainty to expand the market. That suggests the next competitive battleground in run-off is less about balance sheet capacity and more about who can price long-tail risk with better data.

What Run-off Buyers, Captives and Lloyd's Syndicates Should Watch Next

• Legacy acquirers: treat H1 disclosed volumes as an undercount. PwC expects notable closings in H2 2026, and the pending transfer of roughly $4.8 billion in gross technical provisions to Enstar shows the scale of deals that never appear in the disclosed tally.
• Captive insurers and their parents: the PRA/FCA consultation on a new UK captive regime is the near-term regulatory event to track — PwC expects it to generate UK deal flow and to affect captive arrangements domiciled elsewhere.
• Lloyd's syndicates: PwC identifies action on underperforming portfolios as a principal source of run-off supply, so syndicates with legacy exposures face an active exit market in the next two quarters.
• Run-off providers exposed to casualty reserve uncertainty: forward-flow and renewable-cover structures are where PwC says deal flow is increasingly being arranged; expect more flexible capital solutions rather than traditional one-off transfers.
• Legacy market operators: AI adoption is moving into core underwriting and decision-making processes. PwC expects technology-equipped providers that can quantify future reserve uncertainty to expand the market at the expense of slower adopters.