AXIS Capital Holdings Ltd. and Enstar Group Ltd. announced they have entered into a loss portfolio transfer (LPT) reinsurance agreement, which will retrocede $2.3 billion of AXIS’s reinsurance reserves.
Structured as a 75% ground-up quota share, the LPT reinsurance agreement predominantly encompasses casualty portfolios related to 2021 and prior underwriting years totaling $3.1 billion at Sept. 30.
AXIS expects to recognize an approximate $60 million benefit from the excess of reserves ceded over the consideration over the next several years, according to the payment patterns of these reserves.
AXIS will maintain claims control for the covered reserves, subject to certain administrative rights of Enstar.
The LPT reinsurance agreement will be provided by Enstar’s wholly owned subsidiary and S&P “A” financial strength rated reinsurance platform, Cavello Bay Reinsurance Ltd.
The closing of the transaction is subject to regulatory approvals and other customary conditions and is expected to occur during the first half of 2025.
“This transaction aligns our balance sheet with our previously stated underwriting strategy of leaning into our specialty insurance business,” said Vince Tizzio, president and CEO of AXIS, in a statement.
“Furthermore, we continue to be focused on advancing the strategic priorities laid out at our Investor Day in May of driving organic growth, reinvesting in the business, and managing our capital for the benefit of shareholders. We are pleased to be partnering with Enstar in advancing our strategic priorities,” Tizzio added.
“This transaction showcases Enstar’s market-leading position and, being the largest loss portfolio transfer announced in the industry so far this year, it is another example of our ability to deliver significant reinsurance solutions to our global clients,” commented Dominic Silvester, Enstar’s chief executive officer. “We look forward to building a lasting partnership with AXIS, a leading provider of specialty lines insurance and reinsurance.”
Source: AXIS and Enstar
Topics Excess Surplus Reinsurance
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