Aon Report Examines Growth and Outlook for Lloyd's Legacy Market

Aon's Lloyd's Legacy Report—April 2026 examines the evolution, current structure, and future outlook of the Lloyd's legacy market, highlighting how legacy transactions have become an increasingly important component of capital and risk management strategies within the market. The report outlines how legacy solutions are now used not only to address underperforming businesses but also as a proactive tool for balance sheet optimization and earnings stability, per the report. 

The report traces the origins of the modern legacy market to the restructuring of Lloyd's in the 1990s, particularly the creation of Equitas to reinsure pre-1993 liabilities, which established a foundation for today's runoff and legacy structures. Over time, external legacy providers and reinsurance-to-close (RITC) mechanisms evolved into a more formalized market, with Aon noting that activity accelerated significantly following the 2017–2020 "Decile 10" initiative. 

Aon identifies the legacy market as having shifted from a reactive solution to a core strategic tool, with cedants engaging in transactions to reduce earnings volatility, optimize capital, improve operational efficiency, and support restructuring or mergers and acquisitions (M&A) activity. These drivers reflect a broader trend toward integrating legacy solutions into ongoing business strategy rather than using them solely in distressed situations, Aon said. 

The report highlights the growing scale of the Lloyd's legacy market, noting that five specialist RITC syndicates—RiverStone, Enstar, Premia, Compre, and Marco—have collectively assumed nearly $15 billion of reserves since 2010. According to Aon, RiverStone and Enstar account for the majority of reserves transacted, while increased competition from newer entrants has expanded market capacity and capability. 

Deal activity has evolved in both size and structure, with Aon observing a trend toward larger transactions alongside a continued volume of smaller deals. The report indicates that while approximately 25 percent of transactions involve portfolios under $100 million, a growing share exceeds $400 million, reflecting increasing confidence in the market's ability to absorb larger and more complex exposures, per the report. 

In terms of portfolio composition, legacy transactions are frequently multi-line and heavily weighted toward long-tail risks such as casualty, particularly US casualty, where reserve uncertainty remains a key concern. Aon notes that this trend is driven by adverse development in prior underwriting years and ongoing scrutiny of reserve adequacy. 

The report also identifies significant untapped potential, with more than three-quarters of Lloyd's syndicates yet to complete a legacy transaction. At the same time, repeat participants account for a substantial portion of transacted reserves, indicating that many organizations are using legacy solutions as a recurring strategic tool, per Aon. 

While legacy deal activity slowed in 2024 and 2025, Aon attributes this to strong market performance and relatively benign catastrophe experience. However, the report outlines several factors expected to drive renewed growth, including a softening underwriting cycle, increased M&A activity, and continued pressure on long-tail reserve performance. 

Aon further highlights that evolving portfolio strategies, such as combining US and international long-tail exposures, may improve deal execution by balancing risk and aligning reserve expectations between cedants and reinsurers. This approach is expected to support more competitive pricing and facilitate transaction completion, per the report. 

Regulatory developments are also shaping the market, with Lloyd's introducing a legacy oversight framework, effective January 1, 2025, requiring pre-transaction review and approval for legacy deals. According to Aon, the framework focuses on risk transfer, capital adequacy, and operational capability, while imposing additional scrutiny on larger transactions. 

Looking ahead, Aon expects structural drivers such as sustained M&A activity, new market entrants, and continued product innovation—including forward exit options and more granular transaction structures—to support further development of the legacy market. The report concludes that legacy solutions are likely to remain a central component of Lloyd's market dynamics, supporting capital recycling and long-term stability.