AIRROC and EY Release
(Re)Insurance Runoff Survey Report

November 14, 2016

AIRROC and Ernst & Young LLP have published the results of their jointly produced (re)insurance runoff survey. The first of its kind in the US, the results highlight the ongoing challenges faced by insurers and reinsurers that are strategically managing their legacy business.


With the trend of legacy players becoming more and more intertwined with the live markets being able to illustrate the size and depth of the U.S runoff market is increasingly important. “While AIRROC constituents know the importance of legacy, many of us face challenges with illustrating to our companies and colleagues how we impact the live insurance market,” said Carolyn Fahey, Executive Director of AIRROC. “Every company has legacy – but the definitions can be as varied as the business plans of the companies themselves.”

Based on the survey responses, the main themes that emerged are:

  • Finality is at the top of the agenda for managers of runoff business 
  • Restructuring is becoming more significant in the US runoff market 
  • Commutation remains an important part of the runoff toolkit 
  • Asbestos claims continue to plague the industry 

The full report can be accessed on the AIRROC website.

The survey questions were developed by a working group of members of the AIRROC Board of Directors and member companies. Some questions focused on the size of a company’s runoff, lines of business, and the transactions that are used to strategically manage runoff books. Others sought opinions about the challenges, strengths, and future of the business. “EY was pleased to work with AIRROC on this project,” said Luann Petrellis, part of the Insurance Advisory team at Ernst & Young LLP. “We think that it provides us with a very interesting snapshot of the runoff market.” The survey responses highlighted the importance for finality for companies -- the Rhode Island Insurance Business Transfer is a new option for the industry similar to a Part VII transfer in the United Kingdom. Petrellis worked closely with the Rhode Island Department of Insurance on the recently released Regulation 68. “Among other things, the survey response illustrates the keen interest in the regulation,” she said.

AIRROC’s vision is to be the most valued (re)insurance industry educator and network provider for issue resolution and creation of optimal exit strategies. AIRROC’s mission is to promote and represent the interests of entities with legacy business by improving industry standards and enhancing knowledge and communications within and outside of the (re)insurance industry.

Carolyn W. Fahey, Executive Director, AIRROC: 703-730-2808, [email protected]
Marcus Liem, EY: 212-773-9774 , [email protected]