Life reinsurance and insurance holding company, Monument Re, has agreed the novation of a retrocession agreement from Enhanzed Re, a subsidiary of Enstar Group Limited, to Monument Re.
The retrocession agreement was originally written in 2020, and covers a block of annuity policies.
According to the announcement, there are no changes to any of the underlying terms as Monument Re will assume all rights, liabilities and obligations of the Retrocessionaire under the novation agreement.
The portfolio consists of both deferred annuities and whole of life policies.
Manfred Maske, Group CEO of Monument Re, stated that “We are very pleased to have reached agreement with Enhanzed Re. The novation of this portfolio is in line with our reinsurance strategy and risk appetite and fits squarely into our rapidly growing reinsurance portfolio.”
In August 2022, Enstar announced it was to shutter its Enhanzed Re joint venture. In a filing with the US Commission (SEC), the legacy specialist said it was transferring its share of the firm to Allianz.
The filing stated that Cavello Bay, a wholly-owned subsidiary of Enstar entered into a Master Agreement with Allianz and Enhanzed Re.
It added: “Pursuant to the Master Agreement, all of the insurance liabilities ceded to Enhanzed Re by affiliates of Enstar will be commuted or novated to Cavello Bay. All of the insurance liabilities ceded to Enhanzed Re by affiliates of Allianz will be commuted to Allianz or novated to Cavello Bay, except for one reinsurance transaction related to a block of annuity policies written by an affiliate of Allianz (the “Annuities Portfolio”).
The filing also noted that both Cavello Bay and Allianz would cooperate with Enhanzed Re to novate the Annuities Portfolio to a third-party on commercially reasonable terms.
According to the firm, in closing down its venture, Enstar was eliminating its catastrophe exposure.
The filing read: “Completion of the commutations and novations contemplated by the Master Agreement will eliminate Enstar’s direct exposure to catastrophe business and is expected to result in an approximate $62 million increase in Enstar’s book value, which represents an increase of approximately $3.57 in book value per share, exclusive of the potential impact of a future novation of the Annuities Portfolio.”
