Enhanzed Reinsurance Ltd. (Enhanzed Re) is a new joint-venture life and P&C reinsurer that is being launched by a partnership formed by Enstar, Allianz and investor Hillhouse Capital.
Bermuda-based insurance, reinsurance and run-off specialist Enstar Group has invested in newly established Bermuda-based Class 4 and Class E reinsurer Enhanzed Reinsurance Ltd. alongside global insurer and asset manager Allianz SE and specialist asset manager Hillhouse Capital Management Ltd.
Expected to operate across the risk spectrum, Enhanzed Re will underwrite and reinsure life, non-life run-off, and property and casualty insurance business, with the business initially sourced from joint-venture partners Allianz SE and Enstar.
The trio of JV partners have made equity investments amounting to $470 million in Enhanzed Re. At launch, Enstar will own 47.4% of the reinsurer, Allianz 24.9%, and an affiliate of investor Hillhouse Capital 27.7%.
Enstar will also operate as the insurance and reinsurance manager for Enhanzed Re, while Hillhouse Capital Management will act as primary investment manager and an affiliate of Allianz will provide investment management services as well.
Hillhouse is Enstar’s joint-venture partner in total-return reinsurance firm KaylaRe as well.
Enhanzed Re will target underwriting business from affiliates of both Allianz and Enstar initially, looking to maximize diversification by risk and geography across the book of business it creates.
Dominic Silvester, Enstar’s Chief Executive Officer, commented on the launch, “Enhanzed Re brings Enstar together with our established partners Allianz and Hillhouse to provide a vehicle that will reinsure a diversified book of life and P&C reserves sourced through a strong pipeline of opportunities provided by Enhanzed Re’s operating sponsors.
“Enhanzed Re will benefit from world-class investment managers prudently managing capital while pursuing risk-adjusted returns. Through Enhanzed Re, Enstar gains exposure to attractive life and P&C business and in return can offer opportunities for Enhanzed Re to participate in our future significant legacy transactions. We look forward to working with our co-investors, Allianz and Hillhouse, in building this business.”
Enstar is also set to benefit from an efficient source of reinsurance and a capital partner for its run-off deals as well, while also generating management fees and a share of returns from Enhanzed Re, we assume.
Allianz will benefit from ceding business to an efficient reinsurance source, while also receiving performance fee income and managing some of the assets as well.
The goal with Enhanzed Re will likely be to generate a diversified (by geography and line) portfolio of insurance and reinsurance business that performs, but also outperforms on the asset side, then possibly position the reinsurer for an initial public offering (IPO) to bring additional capital from third-party investors into the business.