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Enstar posts $516.8mn Q1 loss as COVID-19 dents investment portfolio

8th May 2020 - Author: Luke Gallin

Enstar Group Limited recently announced a net loss of almost $517 million for the opening quarter of 2020, driven by $612.6 million of unrealised investment losses owing to COVID-19 related financial market turmoil.

enstarEnstar’s sizeable Q1 2020 net loss compares with net earnings of $358.8 million reported in the first-quarter of 2019.

Interestingly, the legacy acquirer notes that although it recognised a significant amount of unrealised investment losses in the three-month period, from April 1st to April 30th, $432.2 million of this total actually reversed as unrealised gains.

In its results announcement, the company highlights ongoing uncertainty and volatility in financial markets as a result of the current crisis, and warns that while its seen unrealised gains in its investment portfolio through the month of April, there’s no assurances that this will not be offset by investment losses going forward.

Additionally, Enstar notes that the COVID-19 pandemic has impacted its insurance business. During the first-quarter of the year, Enstar’s non-life run-off segment recorded no net incurred losses and loss adjustment expenses related to the coronavirus.

However, its StarStone segment recorded COVID-19 related underwriting losses of $22.2 million, and its Atrium unit recorded underwriting losses of $5.1 million in Q1 2020, as a result of the pandemic.

For Q1 2020, the company has reported a non-GAAP operating loss of $336.2 million, compared to non-GAAP operating income of $199.7 million a year earlier.

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