The previous year turned out to be a busy period for the European insurance sector. Gearing up for Solvency II, which finally came into effect on January 1, 2016, increasing competitive pressure and a growing tide of M&A activities are three of the many challenges that have kept the industry on its toes. Solvency II, in particular, has put the topic of legacy books on the front burner of strategic decision-making for insurers across Europe, now that discontinued business has to be backed by equity capital, too. The run-off industry has seen tremendous growth since 2009, when Darag started as the first continental European insurance and reinsurance run-off specialist. Best practices for dealing with legacy books are now emerging while most mid-sized and smaller companies are still only at the beginning of developing their run-off strategy. What do we predict for this year? We see six trends. 1. The run on run-off continues In 2016, the market is bound to reach a new peak. This year, we expect the total volume of run-off deals to reach an all-time high of €4 billion. Driven by Solvency II, the volume of run-off transactions has already grown by a factor of eight, to a total of...
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