This survey is a review by KPMG LLP (UK) of UK life insurers and is based on an analysis of publicly available financial data including annual regulatory returns submitted to the Financial Services Authority (FSA). This information has not been verified or validated in any way by KPMG LLP (UK).

The survey is based on a study of life insurance companies representing over 80 percent of the total value of long-term UK liabilities. UK life business of companies from other European Union countries and Lloyd’s syndicates has not been included.

The size of the UK life runoff market has grown substantially in recent years, both in absolute terms and in relation to the size of the entire UK life market. This reflects the difficulties currently facing the life market, which has experienced an unprecedented level of challenge in recent years and still needs to deal with considerable planned regulatory and potential legislative changes. These changes have been triggered largely in response to a variety of market concerns and issues including mis-selling complaints, the lack of realistic reserving for guarantees and the lack of transparency, in particular, of with profits business.

Executive Summary :

• Total policyholder liabilities exceed £118 billion, which is four times the total value of technical provisions of non-life insurers in run off;
• Run-off makes up over 14 percent of liabilities of all UK life insurers;
• Some £5.9 billion of shareholder funds are locked into life run-off business.

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