AXA XL, the property & casualty and specialty risk division of AXA, has entered into an adverse development cover (ADC) agreement with a wholly owned subsidiary of Enstar Group Limited.
The ADC agreement sees AXA XL secure coverage for 90% of potential adverse developments on its legacy long tail line reserves for accident years 2019 and prior.
The Enstar subsidiary will cover losses incurred on or prior to December 31st, 2019 on a diversified mix of global casualty and professional lines for a premium equal to the transfer of loss reserves of 90% of $1.550 billion ($1.395 billion).
The arrangement sees the subsidiary provide 90% protection, with AXA XL retaining 10%, on two layers, the first of which provides $1.550 billion of protection in excess of a $9.438 billion retention. The second layer provides an additional $1 billion in cover in excess above $11.363 billion.
The deal, which remains subject to customary closing conditions, including the receipt of regulatory approvals, is expected to close around the end of the first-quarter of 2021.
AXA, the parent of AXA XL, revealed the details of this ADC transaction with Enstar earlier this morning as part of its full-year 2020 financial results announcement.
Part of this arrangement sees an Enstar subsidiary enter into an adverse development cover on ProSight’s diversified mix of general liability classes of business.