Legacy specialist Enstar Group has reported consolidated net earnings of $183.2 million for the opening quarter of 2021, compared to a consolidated net loss of $516.8 million in the prior year quarter.
Key drivers of this rather substantial earnings increase include a reduction in net incurred losses and loss adjustment expenses of $55.5 million, which comprised favorable development on prior periods of $109.6 million.
This itself was partially offset by current period losses of $54.1 million related to the StarStone International business that was placed into run-off in June 2020, for which there is current period earned premium.
The favourable development on prior periods was driven by a decrease of $75.5 million in the fair value of insurance contracts for which Enstar have elected the fair value option.
The decrease in the fair value was driven by an increase in corporate bond yields; and Earnings from equity method investments of $118.0 million.
Non-GAAP operating income for the quarter was $283.7 million, compared to non-GAAP operating loss of $337.8 million in 2020.
