Enstar Group has reported a net loss of $444 million in the third quarter of 2022, compared to a net loss of $196 million in the third quarter of 2021.
This contrasted with the firm saying that its net loss for the year currently stands at $1.2 billion, compared to net earnings of $365 million from the same period last year.
The company also reported a return on equity (ROE) of 10.6% and Adjusted ROE of 2.9% for the quarter compared to 2.9% and 2.8%, respectively, in the third quarter 2021.
The firm noted that ROE was impacted by $395 million of net unrealized losses arising primarily from interest rate increases on fixed maturity portfolios that are classified as trading, combined with $151 million of net unrealized losses in the company’s non-core portfolios.
Among Enstar’s operational highlights were the reinsurance agreement it entered into with specialty insurance underwriter, Argo Group International Holdings, for ground up reserves of $746 million, and its completed agreement with Probitas Managing Agency Limited to cover 2018 and prior year of account exposures of Syndicate 1492.
Dominic Silvester, Enstar CEO, commented: “The significant rise in interest rates to combat high inflation continues to drive unrealized bond losses in our investment portfolio. However, we expect our bond portfolio to recover these unrealized losses over time as these bonds will amortize back to par or full principal value as they reach maturity.
“Operationally, we are pleased with the accretive transactions signed with Argo and Probitas, as well as our robust pipeline of opportunities. These transactions further demonstrate Enstar’s ability to provide capital relief solutions to partners of varying size and jurisdictions.
“Our balance sheet remains strong, and we have the capacity to meet market demand. We will continue to provide tailored solutions to our clients, drive positive claims outcomes and invest for the long term. We are confident that this focus will provide exceptional returns for our stakeholders.”