Global insurance group Enstar has reported net earnings of $126 million for the second quarter of 2024, a substantial increase from $21 million in Q2 2023.
The company’s return on equity (ROE) improved to 2.5% this quarter, compared to 0.5% from the previous year, while adjusted ROE was 2.9% for the quarter compared to last year’s 2.1%.
Enstar attributed this improved ROE performance to “an increase in the gain from fair value changes in trading securities, funds held and other investments and favourable prior period loss development. Second quarter 2024 Adjusted ROE* excludes $35 million of net realised losses on our fixed maturities and fair value changes in trading securities and funds held.”
Run-off liability earnings (RLE) surged to $62 million this quarter, compared to $10 million in the same period last year.
This increase was driven by favourable loss developments in the construction defect sector, following active claims management, and improvements in the professional indemnity and directors and officers lines of business.
Enstar also achieved a Q2 annualised total investment return (TIR) of 5.2% and an annualised adjusted TIR of 5.6%, compared to 3.0% and 5.1%, respectively, in Q2 2023.
In the second quarter, Enstar completed several significant transactions: a $400 million loss portfolio transfer with SiriusPoint, a $350 million agreement for reinsurance in the ILS market (as covered by our ILS-focused sister site, Artemis), a $200 million adverse development cover agreement with Insurance Australia Group, and a $297 million transaction to reinsure legacy business with Accredited.
Additionally, Enstar announced yesterday that it will be acquired by a consortium led by Sixth Street for $5.1 billion.
The company also revealed that its President, Orla Gregory, will step down at the end of 2024 after 21 years with Enstar.
Silvester praised Orla Gregory, saying, “Orla has spent her career in dedicated service to Enstar. She is a dynamic executive who has contributed massively to the strong leadership, culture, and brand built at Enstar. We are appreciative that she will be involved in transitioning us into our next chapter. We will miss Orla tremendously.”
Gregory commented, “I am very proud of the achievements by so many during my time at Enstar. With great leadership in place, and significant opportunities in the legacy space, I have no doubt that Enstar will continue to excel. Today’s transaction is an exciting evolution, and I look forward to working with the team in preparation for closing. I thank Dominic for the great opportunities I’ve had and all of my colleagues for their dedication and support.”
