Legacy solutions are entering client conversations earlier, according to Kevin Gill (pictured), chairman of the Insurance & Reinsurance Legacy Association (IRLA) and a partner in EY’s financial services strategy and transactions team in London. After more than three decades buying, selling and structuring run-off business, he credits the change to investment by broking houses.
“If you look at the expansion of the legacy market, over say the past 10 years, that's largely been driven by the introduction of dedicated teams in the big broking houses to focus on legacy and retrospective solutions,” Gill said.
Historically, Gill said, many legacy transactions were brought to market by restructuring teams at accounting firms, including his own sector. Broking houses saw the opportunity and invested in teams that brought capital advisory work together with retrospective solutions.
“Now they are really the engine room of driving legacy transactions to the marketplace, bringing the interface between the cedent and the legacy market, which is all positive for the marketplace,” he said.
As those teams reach across the wider broking business, legacy is more likely to come up during an existing client discussion. Gallagher Re appointed a dedicated head of legacy in 2021 and added a UK head in 2025. Howden’s reinsurance arm brought its legacy and investment banking divisions under common management in 2023, while Lockton Re expanded its Capital Advisory practice in 2025 to include dedicated retrospective and legacy expertise.
A large accumulation of reserves on an insurer’s balance sheet is one reason to consider a legacy transaction, Gill said.
“Usually, if there's a big accumulation of reserves on the balance sheet, there's a capital optimisation opportunity here to shift those reserves on somebody else and free up the capital,” he said.
A change in underwriting strategy can create another opening. An insurer reducing its exposure or changing its appetite in one area may want to transfer the liabilities left behind, releasing capital and reducing volatility.
M&A presents an opportunity that brokers have often had little chance to explore. An insurer’s corporate development team will typically run a deal with an M&A adviser, while confidentiality can leave brokers unaware of it until late in the process. Gill said he is seeing more clients bring a broker in alongside the adviser, sometimes specifically to examine retrospective options.
An acquirer might want most of an insurer’s book but not all of it. Gill said it could ask a broker or the legacy market to find a solution for the unwanted portion, allowing it to buy the whole book and then transfer that portion.
Gill said the skills involved in legacy work are broadly similar to those used in the live market, although the data demands are greater and preparing a data room works differently. The markets are moving closer too, as legacy providers take on prospective risk and even new claimants.
“You're seeing the legacy market shift towards the live market anyway, so they're almost both coming together in that regard,” he said.
For live insurers, legacy is one of several ways to manage capital through an underwriting cycle, alongside tools such as insurance-linked securities (ILS). CFOs may know the option exists without knowing when it would be useful.
“Whether it's ILS structures or anything else, legacy is a capital solution to the live marketplace, and the CFO knows that too,” Gill said. “Now, the CFO may not necessarily know exactly where you bring it in, but actually they're aware it exists, and they can talk to brokers or talk to their advisers and say, where can I bring this into play?”
That gives broking teams a role before a portfolio has become an obvious run-off candidate: identifying where capital is tied up, what an acquirer wants to keep and whether the legacy market can take the rest.
