Enstar Announces Reinsurance Transaction With ProSight

Rhea-AI Summary

Enstar Group Limited (NASDAQ: ESGR) announced a reinsurance agreement involving a loss portfolio transfer from ProSight Global, Inc. The deal encompasses liabilities from ProSight's discontinued workers' compensation lines, with net loss reserves of approximately $500 million and an aggregate limit of $250 million provided by Enstar's subsidiary. The agreement is contingent on a broader strategic transaction by ProSight and is subject to regulatory approval and other conditions.

Positive

• Engagement in a significant reinsurance agreement with ProSight, indicating potential growth opportunities.
• Ceding of approximately $500 million in net loss reserves reflects Enstar's capacity to manage large-scale liabilities effectively.

Negative

• The transaction depends on regulatory approval and other closing conditions, introducing uncertainty regarding its completion.
• Broader strategic transaction by ProSight could lead to complexities that may affect Enstar's operational stability.

HAMILTON, Bermuda, Jan. 15, 2021 (GLOBE NEWSWIRE) -- Enstar Group Limited (NASDAQ: ESGR) announced today that one of its wholly owned subsidiaries has entered into an agreement with subsidiaries of ProSight Global, Inc. (“ProSight”) to provide reinsurance relating to 2019 and prior year business.

The reinsurance will comprise a ground up loss portfolio transfer of ProSight’s discontinued workers’ compensation and excess workers’ compensation lines of business and an adverse development cover on ProSight’s diversified mix of general liability classes of business. In the transaction, ProSight will cede net loss reserves of approximately $500 million and Enstar’s subsidiary will provide additional aggregate limit of $250 million.  

The transaction is subject to the closing of a broader strategic transaction announced by ProSight today and remains subject to regulatory approval and other closing conditions.

About Enstar

Enstar is a NASDAQ-listed leading global insurance group that offers innovative capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. A market leader in completing legacy acquisitions, Enstar has acquired over 100 companies and portfolios since its formation in 2001. For further information about Enstar, see www.enstargroup.com.

Cautionary Statement

This press release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements regarding the intent, belief or current expectations of Enstar and its management team. Investors are cautioned that any such forward-looking statements speak only as of the date they are made, are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. In particular, Enstar may not be able to complete the proposed transaction on the terms summarized above or other acceptable terms, or at all, due to a number of factors, including but not limited to the failure to obtain regulatory approvals or to satisfy other closing conditions. In addition, the evolving COVID-19 pandemic has caused significant economic and financial turmoil globally, as well as uncertainty and volatility in the financial markets. Due to the global uncertainty, we are unable to predict the longer-term effects of the pandemic on our business at this time. Important risk factors regarding Enstar can be found under the heading "Risk Factors" in Enstar’s Form 10-K for the year ended December 31, 2019 and in Enstar’s Form 10-Q for the three and nine months ended September 30, 2020 and are incorporated herein by reference. Furthermore, Enstar undertakes no obligation to update any written or oral forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained herein, to reflect any change in its expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements, except as required by law.

Contact:  Enstar Communications
Telephone:  +1 (441) 292-3645

FAQ

What is the recent transaction involving Enstar Group (ESGR)?

Enstar Group entered into a reinsurance agreement with ProSight Global to manage liabilities from discontinued workers' compensation lines.

How much in net loss reserves is being ceded in the ESGR ProSight deal?

ProSight will cede approximately $500 million in net loss reserves to Enstar.

What is the aggregate limit provided by Enstar in the ProSight reinsurance deal?

Enstar's subsidiary will provide an additional aggregate limit of $250 million.

Are there any conditions for the Enstar and ProSight agreement to close?

Yes, the agreement is subject to regulatory approval and other closing conditions.

What impact could the ProSight transaction have on Enstar's stock (ESGR)?

The dependency on regulatory approvals and the nature of ProSight's strategic transaction could introduce operational risks, impacting ESGR's stock performance.