Bermudian-based run-off specialists such as Enstar are playing a central role in a global non-life legacy insurance market now estimated at about $1.1 trillion, according to a new report from AM Best.

The ratings agency said the sector remained active and healthy but was becoming increasingly concentrated among a small group of specialist firms, many of which had a strong Bermuda presence.

In its Best’s Special Report: Non-Life Run-off – An Evolving Reinsurance Landscape, AM Best said run-off specialists had shifted from niche operators to “key strategic partners helping insurers optimise capital, simplify operations and refocus on core business”.

Run-off refers to the transfer or management of discontinued or non-core insurance books, often involving longtail liabilities that can take decades to resolve. While historically associated with distressed insurers, AM Best said the rationale had broadened.

“A common misconception is that run-off specialists primarily take on problematic or high-risk portfolios,” the report said. “Increasingly, run-off deals are pursued proactively to optimise capital usage, support enterprise risk management objectives or unlock value through reinsurance structures”.

AM Best pointed to Enstar — which was acquired by Sixth Street last year for $5.1 billion — as a dominant force, particularly in North America, noting that the company had accounted for about 20 per cent of all North American non-life run-off transactions since 2016. The report added that Enstar and Riverstone International had positioned themselves as “the go-to markets for larger transactions involving $1 billion or more in total liabilities”.

Overall, AM Best said the global non-life run-off market “continues to enjoy healthy transaction volumes but its composition is becoming increasingly consolidated around a small group of specialist acquirers”.

According to PwC data cited in the report, firms including Enstar, Riverstone International, Compre, Premia, Marco and DARAG accounted for more than half of all global non-life run-off transactions in 2023 and 2024, with concentration expected to deepen in 2025.

Beyond capital relief, AM Best said run-off specialists provided operational benefits by absorbing legacy claims management and litigation exposure. At an industry level, the report described run-off firms as “a stabilising force for the broader insurance ecosystem”, that allow insurers to stay agile through market cycles.