A wholly owned U.S. subsidiary of legacy acquirer Enstar Group Limited has entered into a novation agreement with affiliates of ridesharing company Lyft, Inc. and certain underwriting companies of Zurich North America, a division of global insurer Zurich.
Under the terms of the novation agreement, Enstar will reinsure legacy automobile business underwritten by Zurich between October 1st, 2015 and September 30th, 2018 and reinsured by Pacific Valley Insurance Company, a wholly owned subsidiary of Lyft.
Enstar is set to reinsure the portfolio of legacy automobile business for a consideration of $465 million, and, under a separate arrangement, Pacific Valley Insurance Company will provide retrocession reinsurance protection to Enstar in excess of a $816 million limit.
The deal is effective March 31st, 2020 and is expected to be finalised in early April, subject to a number of closing conditions.
Around this time last year, Reinsurance News reported that Lyft had established its own captive insurer in an effort to lower the cost of insurance protection from third-party carriers. The launch of Pacific Valley Insurance Company, which is based in Hawaii, enables Lyft to self-insure in response to rapidly growing exposures that are too costly to insure in the private market.