Phil Hernon, Chief Operating Officer of Carrick Holdings, told Reinsurance News at RVS 2025 that as emerging legacy exposures such as cyber, climate, and social inflation continue to grow, the market is demonstrating its ability to adapt, driven by proactive planning and ongoing education.
Discussing all things legacy, Hernon explored a wide range of topics, noting that global non-life run-off reserves surpassed the $1 trillion mark for the first time last year, and outlining the key factors driving this growth.
“At the forefront is the recognition by the live market of the benefits the legacy market can provide to it,” Hernon explained.
He noted increased restructuring of underwriting, the ongoing need to release capital, and more intermediaries seeking to create transactions, but stressed that recognition remains the main driver.
Touching on whether he sees demand for run-off solutions accelerating in certain lines of business, Hernon said, “My view is that the demand is predominantly because of capital reasons. I am not sure there is a common theme amongst which lines that are brought to market. It depends on the underwriting direction of the company seeking a legacy transaction. In response to your question, the answer is no.”
We also asked Hernon what types of legacy deals are currently seeing the most activity, and why.
He responded, “We are seeing more Loss Portfolio Transfer (LPTs). We have two Part VIIs going through the legal process that morphed from LPTs, as we did not buy the entity, or they were branch offices of an overseas insurer. There have been a few captive acquisitions; these are a result of a redomicile issue or mergers.”
Hernon went on to highlight how deal structuring at his firm has evolved to accommodate increasingly complex portfolios, noting, “More people – we have recently increased our M&A department by threefold. Technology is having a wider use, including AI.
“We are also in discussions to further enhance our AI ability. These changes will assist the development of more complex structures, particularly in dealing with green risk (new years), which we do not write. Innovation in deal structure is definitely on the increase.”
Closing the interview, Hernon reflected on the biggest opportunities for growth in the legacy space over the next 5–10 years, stating, “MGAs (i.e. when they begin to stop writing). ILS will continue to grow, within those markets that have been slower to accept the existence of legacy solutions and still see the market as bad news.”
Carrick Holdings is a specialist run-off and legacy solutions provider, focusing on the acquisition and management of discontinued insurance and reinsurance portfolios.
The firm helps insurers, reinsurers, and captives release capital and reduce operational burdens tied to non-core or discontinued lines of business.
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