Global insurer and reinsurer AXIS Capital Holdings Limited and global legacy re/insurance specialist Enstar Group Limited have entered into a 75% ground-up quota share loss portfolio transfer (LPT) reinsurance agreement, designed to cover a portfolio of the former’s reinsurance segment business.
This agreement sees AXIS retrocede to Enstar $2.3 billion of reinsurance segment reserves, covering predominantly casualty portfolios related to 2021 and prior underwriting years totalling $3.1 billion at September 30th.
Enstar’s wholly owned subsidiary, Cavello Bay Reinsurance Limited, will provide the LPT agreement, which is expected to close in the first half of 2025, subject to regulatory approvals and other customary conditions.
Bermuda-based AXIS expects to recognise an approximate $60 million benefit from the excess of reserves ceded over the next several years, according to the payment patterns of these reserves.
AXIS will also maintain claims control for the covered reserves subject to certain administrative rights of Enstar.
Vince Tizzio, President and Chief Executive Officer (CEO), AXIS, commented, “This transaction aligns our balance sheet with our previously stated underwriting strategy of leaning into our specialty insurance business.
“Furthermore, we continue to be focused on advancing the strategic priorities laid out at our Investor Day in May of driving organic growth, reinvesting in the business, and managing our capital for the benefit of shareholders. We are pleased to be partnering with Enstar in advancing our strategic priorities.”
Dominic Silvester, CEO, Enstar, added, “This transaction showcases Enstar’s market-leading position and, being the largest loss portfolio transfer announced in the industry so far this year, it is another example of our ability to deliver significant reinsurance solutions to our global clients. We look forward to building a lasting partnership with AXIS, a leading provider of specialty lines insurance and reinsurance.”
