Market News > ARC Congress 2008 Press Release
Legacy management sector considers ‘non traditional’ prospects for growth ARC reports strong 2007 and flags potential developments for 2008
ARC, the UK trade body for legacy management professionals which is currently celebrating its tenth anniversary, today gave its annual sector overview at the 2008 ARC Congress.
Sector highlights:
- The first signs of a downwards turn in UK run-off liabilities - total liabilities of the UK non-life run-off market, including business written at Lloyd’s, declined from £38.2bn at the end of 2005 to £32.7bn at the end of 2006.
- Significant increase in the use of the UK’s Part VII Transfer mechanism.
- First cross-border reinsurance business transfer under new European Reinsurance Directive legislation is completed between Germany & UK.
- Greater clarity on how business transfers can be used following the English Court sanction of a transfer of insurance and reinsurance business from the UK branch of Sompo Japan Insurance to Berkshire Hathaway subsidiary, Transfercom.
- Greater clarity on schemes of arrangement following the Sanction of the WFUM Pools Scheme.
- Growing awareness in Continental Europe of imperative to actively tackle run-off liabilities.
- Greater focus on broker legacy issues following two major outsourcing deals.
- Continued focus on impact of prior-year liabilities on the capital of ‘live’ underwriting operations.
ARC highlights:
- Continuing involvement in government and regulatory reviews. Key 2007/8 projects include:
- - FSA thematic review of claims handling of discontinued business
- - HM Treasury consultation on Part VII Transfer mechanism.
- ARC Academy success further underpinned by Chartered Insurance Institute CPD accreditation.
- Second annual ARC Awards underline sector focus on innovation and excellence.
ARC chairman, Philip Grant, said: “The topics being covered by this year’s Congress seminar – which range from legacy sector lessons for live underwriting operations and the market for non distressed run-off business through to Solvency II and the emerging markets overseas - reflect both current and future opportunities for the sector.
“It is very encouraging to see how the expertise and techniques which have been developed in London are now making a real impact on the scale of run-off liabilities in the UK. The legacy management sector has developed as a centre of excellence for a wide range of skills including credit control and claims management as well as commutations negotiations and other closure tools. The FSA seems genuinely keen to understand the dynamics of claims handling practice in the legacy sector and ARC, which is eagerly looking forward to the review’s outcome, will facilitate the process in any way it can.
“The challenge now is to see how those skills can be applied in other areas – whether by using such techniques to release capital supporting the prior year liabilities of live underwriting operations, by helping the broker sector tackle its own legacy business or by supporting the current focus on reorganising and closing off run-off portfolios among key players in Continental Europe.”
Director of Education & Training for ARC, Bill Bower, added: “It is also extremely gratifying to see how the ARC Academy continues to go from strength to strength. Our courses, which provide one of the key training resources for the sector, are now attracting attendees both from Continental Europe and from all levels within the sector. Being able to offer CII CPD points to those taking part is another important step in underpinning the professional development of the sector.
“Separately, both the quality and quantity of entries for ARC’s 2007 Awards were a real testament to the energy, innovation and professionalism of the sector.”
