Enstar Completes Loss Portfolio Transfer With QBE

Rhea-AI Summary

Enstar Group (NASDAQ: ESGR) has completed a ground-up loss portfolio transfer transaction with QBE Insurance Group subsidiaries. The deal involves reinsuring a portfolio of US commercial liability and workers' compensation business from recently discontinued programs. Under the agreement, QBE ceded net reserves of approximately $376 million, while Enstar's subsidiary provided about $175 million of cover in excess of the ceded reserves. The transaction was finalized after receiving regulatory approvals and meeting closing conditions.

Positive

• Acquisition of $376 million in net reserves portfolio expands Enstar's business
• Strategic expansion in US commercial liability and workers' compensation segments

Negative

• Significant liability exposure of $175 million in excess cover

Insights

Insurance Industry Analyst

This loss portfolio transfer (LPT) transaction represents a significant strategic move for Enstar, demonstrating their continued strength in the legacy insurance market. The $376 million in net reserves ceded by QBE, combined with Enstar providing $175 million of excess cover, shows substantial scale. The deal's structure helps QBE offload risk from discontinued programs while providing Enstar with additional premium flow and investment opportunities. The transaction's completion indicates strong regulatory confidence in Enstar's ability to manage these legacy liabilities. This type of deal typically generates stable, long-term returns through both underwriting profits and investment income on the premium float, though it does require careful risk management given the long-tail nature of workers' compensation and liability claims.

HAMILTON, Bermuda, Oct. 31, 2024 (GLOBE NEWSWIRE) -- Enstar Group Limited (NASDAQ: ESGR) announced today that one of its wholly-owned subsidiaries has closed a previously announced ground-up loss portfolio transfer transaction with subsidiaries of QBE Insurance Group Limited (“QBE”) to reinsure a portfolio of US commercial liability and workers’ compensation business, largely underwritten on recently discontinued programs.

Under the reinsurance agreement, QBE ceded net reserves of approximately $376 million, and Enstar’s subsidiary provided approximately $175 million of cover in excess of the ceded reserves.

Completion of the transaction followed receipt of regulatory approvals and satisfaction of various 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 120 companies and portfolios since its formation in 2001. For further information about Enstar, see www.enstargroup.com.

Contact:

For Enstar:

For Investors: Matthew Kirk (investor.relations@enstargroup.com)

For Media: Jenna Kerr (communications@enstargroup.com)

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

FAQ

What is the value of the loss portfolio transfer between Enstar (ESGR) and QBE?

QBE ceded net reserves of $376 million, with Enstar providing approximately $175 million of cover in excess of the ceded reserves.

What type of insurance portfolio did Enstar (ESGR) acquire from QBE in October 2024?

Enstar acquired a portfolio of US commercial liability and workers' compensation business, primarily from recently discontinued programs.

Has Enstar (ESGR) received regulatory approval for the QBE loss portfolio transfer?

Yes, the transaction was completed following receipt of regulatory approvals and satisfaction of various closing conditions.