The recently announced reinsurance-to-close transaction that Neon Underwriting has entered into with Enstar Group’s StarStone, provides a clean break for the insurer, giving finality on legacy Marketform business.
The arrangement, which we covered here, saw Enstar’s Syndicate 2008 enter into a reinsurance-to-close transaction to assume liabilities as at the 2015 underwriting year from Neon’s Syndicate 2468.
The company said that the arrangement, “Provides Neon with finality on its legacy Marketform business and leaves Neon better positioned to direct its energies and capital resources toward building a strong, profitable business and further establishing itself as a vibrant leading global specialty insurer.”
Ian Martin, Managing Director at Neon, explained, “This transaction provides an important conclusion for Neon, giving us a clean break from any uncertainty associated with our legacy portfolio and allowing us to continue focusing our energy on building an exciting future.
“Neon has undergone significant transformation over the last two years, creating a business with phenomenal talent and disciplined risk selection, supported by best-in-class systems to deliver profitable growth. This finality means we can continue to move forward and further develop the platform we have built.”
Jeff Consolino, Executive Vice President and Chief Financial Officer at American Financial Group and Chairman of Neon Capital Ltd, added, “We are very pleased that Neon has secured agreement to close the 2008 – 2015 years of account with StarStone, following a competitive process. The transaction represents another significant accomplishment for the Neon team, provides an attractive result for Syndicate 2468’s capital providers and eliminates the distraction of the legacy business as Neon executes on its business plan.”
Closing down and finalising legacy business liabilities is attractive to the cedent, Neon in this case as it free’s up resources and allows it to focus on the future. It’s also attractive to specialists like Enstar, which feel they can make a profit out of the transaction and legacy book of business over the longer-term.
