With real-time M&A activity in the re/insurance industry expected to increase this year, PwC expects opportunities to emerge in win-win markets through the divestment of non-core portfolios both pre- and post-deal.
PwC predicts in a new report that M&A activity in 2026 will be impacted by a challenging interest rate environment and continued pressure on growth and earnings across the reinsurance market.
The company has 42 publicly announced non-life runoff insurance deals in 2025, up from 33 in 2024 and 31 in 2023. PwC said the growth was driven by a particularly active fourth quarter of 2025, which saw 14 deals announced.
“Despite the increase in the number of transactions, liabilities transferred are expected to be $5.4 billion, below the $6 billion to $8 billion range that has characterized the market in recent years,” the company noted.
This does not mean a slowdown in overall market activity, but rather reflects a change in deal structure, with more smaller deals being disclosed.
PwC added: “About 70% of all publicly announced deals disclosed deal value. About 40% of these transactions were debt transactions of less than $50 million, underscoring the level of activity at the smaller end of the market.
“Capital relief is rarely cited as a key driver for these smaller deals, with the sell-side justification more often citing operational simplification as a core motivation for disposing of non-core product lines and portfolios.
“There is also significant activity in the $50 million to $250 million range, with half of fully disclosed deals falling within this price range.”
PwC noted that there were no publicly disclosed transactions in this category in 2025; however, discussions with market participants indicate that transactions of this size are expected to occur in the first quarter of 2026.
The total runoff liability transferred in 2025 is supported by two major transactions, each exceeding $1 billion.
North America remained the main center of traditional market activity, with 18 transactions and $3.6 billion in disclosed liabilities. Participation from reinsurance/insurance companies and corporates is expected to continue.
Meanwhile, deal activity in Europe increased significantly compared to the previous year, with seven deals in 2025 compared to two in 2024.
PwC said: “We expect momentum in Europe to continue into 2026, driven by increased familiarity with legacy solutions across the region through market education initiatives, including events such as the IRLA Munich conference in October 2025.”
Looking ahead, the company concluded: “As the rate environment in the reinsurance market remains more challenging than in the recent past, but growth and profitability remain under pressure, we expect M&A activity in the live market to increase.
“The end-acquirer landscape itself has looked more stable of late, but we continue to see interest from new entrants backed by fresh capital, which is expected to bring some further competition, mainly on small and mid-sized deals.
“We also expect runoff market participants to continue to innovate in deal structuring, including further use of forward-looking and hybrid underwriting structures.
“It will be interesting to see how the traditional legacy players look to compete or collaborate with other structured solution providers in this space.”
In related news, last year we hosted a roundtable discussion in partnership with global reinsurer Swiss Re, where experts from across the market discussed the trends, opportunities and challenges shaping the world.
This first Reinsurance News Legacy Roundtable took place on 12 May 2025 and featured 11 select market experts with extensive experience on the sell-side and buy-side, as well as brokerage, legal and advisory, all dedicated to furthering the legacy market.