According to PwC, the legacy insurance and reinsurance market continues to evolve, as highlighted by insurance-linked securities (ILS) transactions announced by legacy and run-off reinsurance specialist Enstar in the second half of 2024, while the firm also suggests that the convergence of traditional legacy and ILS “could be a source of future deal flow in 2025.”In a new commentary, PwC emphasised the importance of maintaining focus on the benefits of the legacy insurance market, stating that it helps the broader insurance market industry recognise its wide range of solutions, including capital relief, enhanced pricing opportunities, and volatility protection.Going back to Enstar, the run-off reinsurance specialist completed two property ILS transactions during the fourth quarter of 2024.In early November, , with its Cavello Bay Reinsurance Limited (Cavello Bay) entity acquiring a Bermuda-domiciled Class 3B insurer and segregated accounts company.

Through this acquisition, finality was given to the investors that had been backing the Class 3B reinsurance entity, while the arrangement also provided continuity for the fronting reinsurance carrier as well, with Enstar’s Cavello Bay stepping in.when the firm provided a loss portfolio transfer (LPT) for prior-year ILS reserves, to enable trapped capital to be released and to provide those investors that provided the collateral with finality.However, while some advanced ILS solutions are emerging across the insurance legacy market, PwC stated that “appetite remains limited due to the current length of investment horizons and challenging risk-return profiles.” Therefore, this suggests that while there is progress in applying ILS to the legacy insurance sector, widespread adoption can still hindered by investment duration and the time required to see returns..

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