Enstar Completes ADC Agreement With RSA

Rhea-AI Summary

Enstar Group Limited (NASDAQ: ESGR) has finalized an agreement with Royal & Sun Alliance Insurance Limited to provide £400 million in adverse development cover (ADC) for select business lines in the UK and Ireland. The agreement entails a £2.595 billion retention on losses occurring before December 31, 2020. Enstar will cover 50% of the ADC while RSA retains the other 50%. Regulatory approvals have been obtained, marking this as Enstar’s second significant deal with RSA, highlighting the importance of legacy solutions in facilitating mergers and acquisitions in the global insurance sector.

Positive

• Finalized agreement with RSA for £400 million in ADC coverage.
• Enstar retains 50% of the ADC, demonstrating confidence in risk management.
• Strengthens Enstar's portfolio in the global insurance market.

Negative

• None.

HAMILTON, Bermuda, Oct. 06, 2021 (GLOBE NEWSWIRE) -- Enstar Group Limited (NASDAQ: ESGR) announced today that one of its wholly owned subsidiaries has closed a previously announced agreement with Royal & Sun Alliance Insurance Limited (“RSA”), a wholly owned subsidiary of Toronto-based Intact Financial Corporation, to provide adverse development cover (“ADC”) for certain UK, Irish, and other business of RSA and its subsidiaries.

The ADC provides £400 million of aggregate coverage in excess of a £2.595 billion retention on losses occurring on or prior to December 31, 2020 within a diversified portfolio of commercial and personal insurance lines risks. Enstar and RSA co-participate on the cover, with Enstar providing 50% and RSA retaining the remaining 50%.

Completion of the transaction followed receipt of regulatory approval and satisfaction of various closing conditions.

Dominic Silvester, Enstar’s Chief Executive Officer, said: “This transaction, our second large deal with RSA, shows the role that well-designed, smoothly executed legacy solutions can play in facilitating M&A activity in the global insurance market.”

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.

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

FAQ

What is the recent agreement between Enstar Group and RSA about?

Enstar Group has closed a £400 million adverse development cover agreement with Royal & Sun Alliance Insurance Limited.

How much coverage does the ADC provide for RSA's business?

The adverse development cover provides £400 million in coverage.

What percentage of the ADC does Enstar provide?

Enstar provides 50% of the adverse development cover.

What is the retention amount concerning the ADC?

The retention amount is £2.595 billion on losses occurring prior to December 31, 2020.

How does this agreement impact Enstar's position in the insurance market?

This agreement solidifies Enstar's role in offering legacy solutions and enhances its portfolio in the global insurance market.