Enstar Group Limited recently announced the launch of KaylaRe Ltd., a total return strategy, Bermuda-based, Class 4 reinsurance firm with a global specialty focus and capitalised to the tune of $620 million.
Enstar has launched KaylaRe with the assistance of $25 billion Chinese investment management group Hillhouse Capital Management, Ltd, with Enstar providing $300 million of the start-up capital, Hillhouse $270 million. The remaining $50 million has been provided by financial market focused private equity investor Stone Point Capital LLC.
Enstar will act as reinsurance manager for KaylaRe, while Hillhouse Capital Management will act as primary investment manager, alongside other managers KaylaRe may engage with to invest a portion of the reinsurers assets.
KaylaRe targets the deliver of “superior risk-adjusted returns over market cycles through a diversified asset allocation and selective underwriting,” the company said.
To get the business up and running and capital deployed, while bringing in the all important premium float a total return strategy needs, KaylaRe has entered into a 35% quota share reinsurance agreement with Enstar insurer subsidiary StarStone, as well as loss portfolio transfer agreements with Enstar for legacy business. KaylaRe will also underwrite third-party premiums in the future, so will be market-facing as well, and will participate in future Enstar legacy transactions where appropriate.
The launch of KaylaRe has triggered a number of executive changes at Enstar, not least the fact that Nick Packer one of the companies co-founders will be CEO of the newly formed total return reinsurance company.
Dominic Silvester, Enstar’s Chief Executive Officer, explained; “KaylaRe brings Enstar together with partners Hillhouse and Stone Point to create a unique global reinsurer. KaylaRe has great performance potential, and a dynamic and proven leader in Nick Packer, who has been a core contributor to Enstar’s growth and success. He has shown tremendous commitment to our investment in KaylaRe, and, while he will be greatly missed at Enstar, I look forward to working closely with him in his new role.”
Nick Packer added; “KaylaRe is a differentiated total return reinsurer, and it is an honour to lead this company from its inception. Through Enstar, we have long-term access to a high-quality, diversified portfolio of low volatility specialty insurance risks and supporting infrastructure. Further, the additional investment and support of Hillhouse and Stone Point provide KaylaRe with the capability to create substantial incremental value for shareholders through market cycles.”
Other management changes announced by Enstar include:
Paul O’Shea, who has been named President of Enstar and Executive Chairman of StarStone. Orla Gregory, appointed to Chief Operating Officer of Enstar. Paul Brockman and David Atkins both taking on broader responsibility for Enstar’s core insurance and legacy activity, including oversight of claims, commutations, and ceded reinsurance. Demian Smith being promoted to Group Chief Executive Officer of StarStone and David Message being named as Chief Underwriting Officer of StarStone.
Silvester said on the executive changes; “I am pleased to announce these appointments today, which signal the robust capabilities, diverse industry experience and collective strength of Enstar’s leadership team. I look forward to working with this talented group as we lead Enstar toward further growth and success.”
Source: Globe Newswire.