Runoff Transactions: A Reinsurance and Captive Insurance Growth Area


Captive Use Trends & Innovations | Steven McElhiney | President & CEO | EWI Re, Inc.


Runoff and related transactions present an enormous opportunity in the property and casualty industry, says Steve McElhiney, president and CEO of EWI Reinsurance. The common tools used for runoff transactions include commutations, loss portfolio transfers, and assumption agreement (novation), which can be employed to release and re-deploy risk-bearing capital in support of new business strategies, while freeing up organizational resources, in return for an agreed-upon premium. Historically, these runoff tools have been used in North America, London, and Europe. More recently, acquisitive Asian companies are taking on some excellent liabilities but may want to discharge some of them. There are also many captive insurance companies around the world that are subject to using runoff solutions, and many great opportunities for growth in runoff transactions exist.