Global non-life insurance run-off reserves have climbed to a record $1.129 trillion, according to PwC’s latest survey, demonstrating the sector’s growing role in international insurance.

The 16th Global Insurance Run-Off Survey, launched at the Reinsurance Rendez-Vous de Septembre in Monte Carlo last week, shows reserves rising 11 per cent since the last survey. PwC attributed the increase to new business flowing into run-off and an uplift in current reserves.

Survey respondents described the legacy sector as “stable”, “evolving” and “dynamic”, with 87 per cent expecting new capital inflows over the next three years. Capital providers are seeking experienced management teams and strong pipelines before backing new platforms, but deal pricing remains targeted for mid-teen returns.

Dan Schwarzmann, partner at PwC, said: “The Bermuda insurance market continues to thrive, not least because of its reputation of driving innovation for the benefit of policyholders and other stakeholders through high-quality and thoughtful regulation. As global run-off reserves increase, the Bermuda market will continue to play its part in legacy sector deals and delivering value.”

PwC tracked 25 publicly announced non-life run-off transactions since January, covering $1.13 billion in gross reserves. While deal numbers are on pace with last year, average sizes have been smaller, concentrated in the $50 million to $1 billion range. Nearly half of respondents forecast that larger transactions may return over the next 18 months, particularly in North America and other international markets, while activity in Britain and Ireland is expected to level off.

Among emerging risks, perfluoroalkyl and polyfluoroalkyl substances liabilities are increasingly in focus. The synthetic chemicals, linked to environmental and health concerns, are beginning to generate claims across multiple lines.

PwC noted that 55 per cent of respondents expect consolidators to adapt deal structures through exclusions or sublimits, while more than a third foresee higher risk premiums.

Rebecca Wilkinson, corporate liability restructuring director at PwC UK, added: “While some well-established players have the capacity to execute very large deals, megadeals will continue to be significantly outnumbered by transactions at the lower range. PFAS exposures are growing in prominence, but the market is adapting to manage these risks.”