Specialized segment where dedicated acquirers buy run-off claims portfolios to free up capital and management attention for the seller.
The legacy, or run-off, market brings together specialized acquirers who buy from insurers or reinsurers portfolios of claims still being settled, often old, complex, or long-tailed, such as asbestos or historic environmental pollution. The transaction, called a loss portfolio transfer, lets the seller remove from its balance sheet a technical reserve whose management consumes capital and management attention without creating further commercial value, in exchange for a price that reflects the discount the acquirer demands for carrying the residual uncertainty. Dedicated players such as RiverStone, Catalina Holdings, or the Compre group, which grew out of Randall & Quilter, have built their entire business around this activity, buying dozens of portfolios a year across Europe and the United States. The segment gained scale under Solvency II in Europe, since the directive raised the capital cost of older reserves and pushed more insurers to dispose of them rather than manage them in-house to full extinction, a horizon that can exceed several decades for some bodily injury or environmental claims.
A reinsurer still carries reserves tied to asbestos claims underwritten in the 1970s. Rather than manage them for further decades, it sells them via a loss portfolio transfer to a legacy consolidator such as Compre, at a discounted price.
transfert de portefeuille, loss portfolio transfer, LPT, consolidateur legacy