Pro Global: Will the soft market reshape the legacy landscape in 2026?

In the live insurance market, capacity is plentiful, rates are under pressure, and competition is fierce - we will enter 2026 in softer market territory and the 1 Jan renewals will likely confirm this.

On the surface, that dynamic has little to do with legacy and run-off books, after all, those portfolios are already closed.

Yet as we look toward to 2026, the question worth asking is: will the soft market change the behaviour of carriers in ways that ripple through the legacy sector?

Capital choices in a softer cycle

In a soft market, discipline becomes the scarce commodity.

Carriers are forced to think carefully about where they commit capital, which lines to defend, and which to leave behind.

While the soft market doesn’t directly alter the value of existing run-off books, it does influence what comes to market next.

Some carriers will double down on their core underwriting strengths, freeing up capital by selling legacy portfolios that no longer align with their growth strategy.

Others may take the opposite approach, holding on to legacy exposures as a stabiliser, using them to diversify results when live underwriting margins narrow.

I think that divergence will define the year ahead. A softer environment won’t shrink the legacy sector, but it may make it more selective, as boards reassess which parts of their balance sheet are strategic, and which are simply slowing them down.

Regulatory rigour: Lloyd’s raises the bar

Overlaying those market forces is a new layer of regulatory scrutiny.

From 2025, all legacy transactions within the Lloyd’s market must be approved by the new Legacy Review Panel (LRP) under the Capital and Planning Group.

The LRP will review each deal’s capital impact, operational readiness and governance, testing not only whether the numbers work, but whether the counterparty does.

That’s a fundamental shift. Lloyd’s isn’t just tightening control; it’s signalling that legacy is now core business, not a sideshow. This oversight will likely raise quality across the board, favouring acquirers with strong governance, robust data and operational depth. For ceding syndicates, it will encourage earlier engagement, cleaner data, and sharper integration planning.

In the long term, this will make the market more resilient. But it also means that execution, not just ambition, will be the differentiator.

Tech takes the friction out of transition

Mirroring the trend we see in the live market, technology is now the engine of legacy success - albeit running slightly quieter and in a less headline-grabbing way, perhaps.

But the fact is, what used to be a friction-filled process of data migration, claims alignment and system reconciliation has become faster, cleaner and far more transparent.

In 2025, we’ve seen real progress along three key fronts: AI-assisted data triage and portfolio analytics have accelerated due diligence and improved pricing certainty; automated claims workflows and digital dashboards are reducing servicing costs and improving transparency; and secure, standardised data-rooms, including those now required under Lloyd’s templates, are smoothing regulatory reviews.

Technology doesn’t just make integration faster. When both buyer and seller can see clean data, model outcomes, and test scenarios in real time, confidence in execution rises.

For Pro Global, this is where the next wave of innovation will sit, not in creating new deal structures, but in perfecting the handover between live and run-off, and the efficient and compliant management of legacy portfolios.

The past 12 months offered steady, deliberate activity rather than fireworks. Most legacy transactions were smaller, targeted deals aimed at simplification and finality. But the story beneath the numbers was more important: cleaner data, earlier collaboration, and disciplined post-deal integration planning.

Ultimately, legacy transactions are a designed part of the capital lifecycle, and I think we will see the planning around that capital lifecycle only continue to mature as carriers assess their options under softer market conditions.

Human capital challenge

There’s another conversation that will shape dynamics in the legacy sector in 2026 and beyond: talent. A generation of professionals who built the modern legacy market in the 1990s is approaching retirement, taking decades of institutional knowledge with them.

At the same time, the live market, buoyed by digital transformation and product innovation is competing to attract the much needed next generation of talent. For legacy, that presents a challenge: how to make the field appealing to people who want to work at the cutting edge of finance, data and transformation.

The truth is, legacy sits at the crossroads of all three.

The modern run-off market requires data scientists, actuaries, claims specialists and capital strategists.

It’s fast-moving, technical, and increasingly central to how insurance capital functions.

The question for 2026 is whether we can articulate that clearly enough to bring in the next cohort before the experience gap widens.

And how insurers confront that talent gap will say a lot about how they confront the cycle as well.

In a soft market that rewards focus and punishes drift, legacy will be the mechanism that separates those managing the cycle from those reacting to it.

By Richard Emmett, head of insurance services, Pro Global