The report highlights the growing scale and capability of the specialist Reinsurance-to-Close (RITC) market at Lloyd’s, in which five dedicated RITC syndicates – RiverStone, Enstar, Premia, Compre and Marco – have collectively assumed almost $15 billion of reserves since 2010, bringing additional capacity, enhanced claims expertise and increasingly data-driven reserving and portfolio management capabilities.
For cedants, this deepening market capability can translate into reduced volatility, more efficient operations and the ability to unlock value for well-reserved portfolios through competitive deal dynamics and specialist run-off execution.
While legacy deal activity eased in 2024 and 2025 following strong broader market performance and relatively benign catastrophe activity, Aon expects activity to accelerate as market conditions shift and capital allocation becomes more disciplined. In such environments, carriers typically take a more granular view of underperforming segments, while longtail uncertainty remains a key consideration across classes such as U.S. casualty and aviation.
The report also identifies strong indicators of sustained demand; more than three quarters of Lloyd’s syndicates have not yet completed a legacy transaction, signaling significant untapped potential, while repeat sellers account for around two thirds of reserves transacted since 2015, demonstrating that many insurers are using legacy as a recurring strategic lever. In many cases, cedants rebuild material reserve bases within two to three years, supporting repeatable capital recycling and providing a disciplined way to manage back-year risk through the cycle.
Rob Margetts, legacy reinsurance broker at Aon, said: “The Lloyd’s legacy market has evolved from a specialist rectification solution into a mainstream tool for managing balance sheets, capital and earnings. As insurers operate in a more competitive environment and prepare for a potential softening of rates across multiple classes, Aon expects legacy transactions to play an increasingly important role in helping managing agents and capital providers protect performance, recycle capital and maintain underwriting appetite. We provide a range of legacy solutions to our clients as part of a broader toolkit for strategic capital management.”
The Aon report highlights how legacy solutions can help insurers release capital tied up in prior-year reserve risk, protect current-year performance and support underwriting capacity – especially when raising fresh capital may become more challenging as the cycle softens. Further benefits include:
Improve earnings stability by reducing exposure to back-year reserve volatility.Release trapped capital and redeploy it toward growth, underwriting strategy and resilience.Enhance operational efficiency by transitioning legacy blocks away from legacy systems and resource constraints.Support M&A and restructuring by ring-fencing historic risks that are not central to the strategic thesis.
Cedant confidence in the legacy market has been reinforced by Lloyd’s ongoing focus on oversight and discipline. From 1 January 2025, Lloyd’s introduced a Legacy Oversight Framework, including early engagement via a Legacy Review Panel and formal approval through the Capital and Planning Group. The framework focuses on risk transfer, capital adequacy, operational capability and concentration risk, alongside enhanced scrutiny for larger transactions and tighter controls around profit release until integration is complete, helping to reduce execution risk and support market stability.
Looking ahead, Aon expects structural growth drivers – including sustained carrier M&A activity, an increasing number of new entrants and alternative capital and continued product innovation such as forward exit options – to support a more mature and competitive legacy landscape.
Mike Cane, head of capital advisory UK for Aon, added: “With specialist capacity, governance and execution capabilities continuing to strengthen, insurers that use legacy proactively are well positioned to optimise capital, reduce volatility and maintain strategic flexibility as the cycle evolves.”
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