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Enstar’s net earnings rise by 89% on $1.6bn of realised & unrealised gains

1st March 2021 - Author: Luke Gallin

Legacy acquirer Enstar Group Limited has reported a rise in net earnings for 2020 to $1.7 billion from the $902.2 million reported a year earlier, driven by net realised and unrealised gains of $1.6 billion for the year.

enstarThe significant level of realised and unrealised gains includes $1.3 billion relating to other investments and equities and $306.3 million to fixed income securities.

Non-GAAP operating income also increased year-on-year, hitting $1.6 billion in 2020 against $558 million in the prior year.

Net premiums earned actually declined for Enstar last year, falling from $804 million in 2019 to around $572 million in 2020. However, fees and commission income increased by a fair amount to $42.5 million in 2020, while net investment income fell very slightly to $302.8 million, and other income more than doubled to $101 million.

Net incurred losses and loss adjustment expenses totalled roughly $416 million for Enstar in 2020, which is down by almost $200 million from the level recorded in 2019. Acquisition costs also fell year-on-year to $171 million, while general and administrative expenses increased from $413 million in 2019 to $501 million in 2020.

Across its operating companies, Enstar has reported an underwriting loss of $310.8 million for 2020, including a $121 million underwriting loss at StarStone; a $15.5 million underwriting gain at Atrium; an underwriting loss of $207.5 million in non-life run-off; and an other underwriting loss of $2.5 million.

At StarStone, the combined ratio improved slightly year-on-year but remains at a high 138.1%, comprised of an 83.8% loss ratio, a 28.5% acquisition expense ratio, and a 25.8% operating expense ratio.

At Enstar’s Atrium, a loss ratio of 49.7%, an acquisition expense ratio of 34% and an operating expense ratio of 7.5%, resulted in a combined ratio of 91.2%, which represents a slight deterioration from the 90.6% posted in 2019.

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