Run-Off: The New Specialty Insurer-A Diamond in the Rough or Tip of the Iceberg?


Michael Warner
Conning, Inc.

Conning—Property-Casualty Run-Off Companies Are the New “Specialty Insurers”

(Hartford, CT) October 19, 2015—The property-casualty run-off market developed to meet insurers’ need to divest noncore operations, and has become an important extension of the insurance markets in recent years, according to a new study by Conning.

“The property-casualty insurance run-off markets have evolved rapidly in recent years from single-purpose acquisition vehicles with minimal capital to balance sheets that boast multi-billion-dollar run-off reserves,” said Gerard Vecchio, Director, Insurance Research at Conning, Inc. “Today’s complex run-off business models may incorporate various components, including completion of highly leveraged acquisitions, aggressive claims handling, forced commutations, and separating acquisitions into liquidation-only businesses versus profitable renewal books. In effect, the run-off specialist has become another form of specialty property-casualty insurer focused on specific long-tailed lines of business with an expertise in claims management.”

The Conning study, “Run-Off: The New Specialty Insurer—A Diamond in the Rough or Tip of the Iceberg?” examines the evolution of the property-casualty run-off market including factors that are driving the maturation of the market, and analyzes seller considerations in the divestiture of noncore operations. Conning concludes this study with a discussion of factors that could lead to further consolidation in the run-off industry.

“From the buyer’s perspective, the ability to generate an adequate return from the purchase drives most transactions, while from the seller’s perspective price is also paramount but many other considerations go into an analysis of whether to divest or retain a business in run-off,” said Steve Webersen, Head of Insurance Research at Conning, Inc. “These factors include the level of management distraction in operating noncore businesses, the ability to free growth capital, and the potential to remove future liabilities, to name a few.  Looking forward, the nonlife insurance run-off markets are poised to transition once again as Solvency II accelerates consolidation among property casualty insurers, and the adoption of a ‘live’ business renewal model by some run-off specialists create an even more active M&A market for discontinued operations.”

“Run-Off: The New Specialty Insurer—A Diamond in the Rough or Tip of the Iceberg?”
is available for purchase from Conning by calling (888) 707-1177 or by visiting the company’s web site at

About Conning®

Conning ( is a leading investment management company for the global insurance industry, with $92 billion in assets under management as of June 30, 2015, through Conning, Inc., Conning Asset Management Limited, Cathay Conning Asset Management Limited, Goodwin Capital Advisers, Inc., and Conning Investment Products, Inc. that are all direct or indirect subsidiaries of Conning Holdings Limited (“Conning”) which is 100% owned by Cathay Life Insurance Co., Ltd., a Taiwanese company.  The company's unique combination of asset management, risk and capital management solutions and insurance research helps clients achieve their financial goals through customized business and investment strategies. Founded in 1912, Conning provides clients with innovative solutions, leveraging its global capabilities, investment experience, proprietary research and risk management technology. Headquartered in Hartford, Connecticut, Conning also delivers its services globally through its offices in New York, London, Cologne, Hong Kong, and Tokyo.