A wholly-owned subsidiary of Enstar Group Limited has signed an agreement with Royal & Sun Alliance Insurance Limited (RSA) to provide adverse development cover (ADC) for certain businesses of RSA and its subsidiaries, in exchange for premium.
The ADC will provide £400 million of aggregate cover in excess of a £2.595 billion retention on losses occurring on or prior to December 31st, 2020 on a mix of commercial and personal insurance lines.
The protection is for certain UK, Irish, and other business of RSA, which is wholly-owned by Intact Financial Corporation, and its subsidiaries.
Under the terms of the agreement, Enstar and RSA will co-participate on the cover, with Enstar providing 50% and RSA retaining 50%.
Dominic Silvester, Enstar’s Chief Executive Officer (CEO), commented: “Enstar is pleased to continue our partnership with RSA by delivering a bespoke run-off solution, which draws on our expertise and proven ability to execute complex transactions. The 50% co-participation structure provides strong alignment of interests whilst supporting Intact’s strategic objectives and reaffirms Enstar’s position as the partner of choice in the legacy market.”
The deal is expected to close in the third quarter of 2021, and remains subject to regulatory approval and satisfaction of various closing conditions.