The introduction of Solvency II, changes to local market regulations and the expansion of activity from the mature legacy market in London into mainland Europe will drive increased run-off activity – particularly in Germany in 2015.

Undoubtedly, there are both opportunities available in the European legacy market, and the barriers to getting deals done. For example, one of the main barriers to completing a transaction is regulatory issues, while cultural resistance is also an issue as European insurers have historically felt that run-off was something they needed to manage internally.

However, more transactions are expected in the coming year, and the countries most likely to see this deal flow are German-speaking markets, where over 40 per cent of re/insurance companies contain run-off portfolios, mainly related to third-party liability and credit insurance, making a total non-life run-off market worth €103.5 billion.