Enstar has reported a significant improvement in its Q3 2023 results, seeing net earnings of $38 million, up from a net loss of $432 million in the same period last year.
This figure brings net earnings attributable to Enstar ordinary shareholders of $483 million for the first 9M of 2023, compared to a net loss of $1.1 billion for the 9M ended September 30, 2022.
Enstar’s Q3 Return on equity (ROE) was 0.9%, while Adjusted ROE was 2.5%, compared to (9.4)% and (2.5)%, respectively, in the third quarter of 2022.
The firm explained that ROE performance was driven by investment returns of $146 million. The Adjusted ROE excludes $80 million of net realised and unrealised losses on Enstar’s fixed maturities.
ROE for the first 9M of the year was 10.8%, with an Adjusted ROE of 10.8%, compared to (19.5)% and (5.2)%, respectively, for the 9M ended September 30, 2022.
Enstar noted that the 9M ROE performance was driven by investment returns of $660 million and a year-to-date net gain recognised on the completion of the novation of the Enhanzed Re reinsurance of a closed block of life annuity policies of $195 million.
Meanwhile, the firm disclosed an annualised total investment return (TIR) of 1.8% and Annualized Adjusted TIR of 4.5%, compared to (13.1)% and (1.3)%, respectively, for the same period last year.
Enstar said that recognised investment results benefited from net realised and unrealised gains on its other investments, including equities, of $86 million and net investment income of $143 million, partially offset by net realised and unrealised losses on its fixed maturities, including other comprehensive income (OCI) of $143 million.
The firm also signed an agreement with AIG in Q3 to provide protection to AIG on its retained exposure to adverse development on Validus Re carried loss reserves, up to a limit of $400 million.
As per Enstar, the agreement became effective as of November 1, 2023, corresponding to the closing of AIG’s sale of Validus Re to RenaissanceRe.
Dominic Silvester, Enstar CEO, commented, “We maintained strong operational momentum in the third quarter with our agreement with AIG and ongoing execution of our strategic priorities, while delivering year-to-date growth in book value per share.
“As we look to the end of 2023, we will rely on our core strengths of scale, claims management experience and our strong balance sheet to continue providing long-term value.”
