"This is the third survey of the UK life run-off market that the Association of Run-Off Companies Ltd (ARC) has commissioned. Prepared by KPMG LLP (UK), the survey sheds valuable light on an often overlooked industry sector and highlights how sizeable and important it has become."

Philip Grant, ARC Director, September 2005

There are now approximately 330 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 technical liabilities.

The survey is based on a study of over 130 UK life assurers and friendly societies, which represent over 97 percent of the total value of UK long-term technical liabilities (hereinafter referred to as “policyholder liabilities”). UK life business of companies from other EU countries and from Lloyd’s syndicates has not been included in this survey.

Executive Summary :

• Total policyholder liabilities of UK life assurers in run-off3 are just over £135 billion, an increase of some £11 billion since 2003;
• Life assurers in run-off account for approximately 14 percent of the policyholder liabilities of all UK life assurers. This is the same as in 2003;
• Some £11.5 billion of capital is tied up in UK life run-off business, an increase of almost £3.0 billion on 2003;
• The number of UK life assurers that have gone into run-off has increased to 51 from 44 in 2003;
• The life run-off market continues to consolidate and the 51 companies in runoff are currently held within 18 corporate groups, with the two largest groups containing over £60 billion of policyholder liabilities in run-off;
• The life run-off market spent just under £1.1 billion in administration costs in 2004. This represents an increase of approximately 15 percent over 2003.

You can access the survey by clicking here