PwC: European re/insurer restructuring to rise
Over 60% of (re)insurers believe Solvency II will increase focus on underperforming lines of business, according PricewaterhouseCoopers’ (PwC) fifth annual survey, “Unlocking value in run-off”.
A third of respondents said they are expecting a significant level of restructuring activity in the next three years, with medical malpractice, credit and surety and employers’ liability lines of business the most likely to be exited.
However, 43% of firm’s questioned said Solvency II may result in the acquisition of certain lines of business, with long-tail liability lines seen as the most likely target area.
The research also reveals that over 90% of respondents have a strategic plan in place for dealing with their run-off business and more than 60% cite releasing capital as the key objective.
Other key findings from the survey include:
The size of the non-life European run-off market is now in the region of €218 billion.
Run-off is handled in a variety of ways, 44% manage it in a separate business unit but 15% handle run-off alongside ongoing business.
Respondents identified appropriately skilled resources as a constraint to being able to deal with run-off effectively within their organisations.
Seventy two per cent of respondents have been involved in some form of restructuring activity to date and half of the respondents believe there will be more than 10 run-off disposal transactions in the next two years, with the proportion up from one third a year ago.
Respondents believe that most activity will take place in Germany, the UK and Switzerland.
PwC’s discontinued insurance business team partner, Dan Schwarzmann, comments: “We anticipate that there will be a significant volume of transactional activity linked to Solvency II with new niche players emerging, but this will probably not start materialising for another 12 months or so.”
Category: Business Insurance News, Employment News, Insurance News
Visited 1409 times, 2 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.