"This is the second survey of the UK life run-off market which the Association of Run-off Companies (ARC) commissioned and are proud to be associated with.This industry sector is poorly understood and this survey which has been prepared by KPMG LLP (UK) is an important step forward in highlighting how sizeable and important this sector has quickly become."

David McGuigan, Chairman of ARC

There are now approximately 329 entities that are authorised to carry on life assurance business in the UK, including composite assurers who write both life and non-life business, and friendly societies. Of these, approximately 10 percent by number, account for over 75 percent of the total value of long term liabilities.

The survey is based on a study of over 130 UK life assurers and friendly societies, which included all those with long-term technical liabilities (hereafter referred to as "policyholder liabilities") in excess of £500 million. The entities surveyed represent over 97 percent of the total value of UK policyholder liabilities. UK life business of companies from other EU countries and from Lloyd’s syndicates has not been included in our survey.

Executive Summary :

• Total policyholder liabilities of UK life assurers in run-off exceed £124 billion, an increase of almost £16 billion since 2002;
• Life assurers in run-off account for approximately 14 percent of the policyholder liabilities of all UK life assurers;
• Some £8.5 billion of capital is tied-up in life run-off business, an increase of £3.0 billion on 2002;
• The number of life assurers in run-off has increased to 44 from 35 in 2002;
• The life run-off market continues to consolidate and the 44 companies in run-off are currently held within 16 corporate groups;
• The life run-off market expended approximately £1.0 billion in administration costs in 2003. This represents a reduction of some £215 million over 2002 and was achieved despite the increase in the number of entities and size of the policyholder liabilities under management.

You can access the survey by clicking here