Legacy Specialist Enstar and Aspen Insurance Agree to $3.12B Loss Portfolio Transfer

Enstar Group Ltd. announced that one of its wholly owned subsidiaries has reached an agreement for a ground-up loss portfolio transfer (LPT) with Aspen Insurance Holdings Ltd. for its 2019 and prior business.

In the LPT transaction, Enstar’s subsidiary will reinsure losses incurred on or prior to Dec. 31, 2019 on Aspen’s diverse mix of property, liability and specialty lines across the U.S., UK and other jurisdictions.

Enstar will assume net loss reserves of $3.12 billion in the LPT transaction, which is subject to a limit of $3.57 billion. The existing adverse development cover (ADC) between the parties that closed in June 2020, under which Enstar assumed $770 million of loss reserves, will be absorbed into this LPT.

Completion of the transaction is subject to regulatory approvals and satisfaction of various other closing conditions, during which time the ADC will remain in place. Premium and reserves under the LPT will be adjusted at closing for claims paid on and after the Oct. 1, 2021 effective date.

Financial details of the transaction, which is expected to close in the first half of 2022, were not disclosed.

“The expansion of our reinsurance of Aspen’s legacy reserves is a great opportunity for us to play a larger role in managing a portfolio we know well,” commented Dominic Silvester, Enstar’s chief executive officer.

“This transaction, which reflects our strong partnership with Aspen, provides an attractive growth opportunity and reaffirms our position as the preferred partner for global insurers seeking the transfer of significant legacy business,” he added.

“Continuing to build capital strength, flexibility and efficiency is an important part of our strategy and we are therefore pleased to announce this loss portfolio transfer with Enstar, which is a natural evolution of our previous reinsurance agreement and builds upon our strong relationship,” said Mark Cloutier, Aspen’s executive chairman and group chief executive Officer.

“This transaction will positively impact our capital position and enable us to further deploy into the continued attractive market environment while significantly improving the protection of our balance sheet and future earnings from the potential impact of the recent soft market cycle,” Cloutier continued.

In addition, this transaction allows us to take forward our repositioned underwriting portfolio while continuing to focus on servicing the needs of our clients,” he said.

About Enstar

Enstar is a NASDAQ-listed global insurance group that offers capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. A market leader in legacy acquisitions, Enstar has acquired over 110 companies and portfolios since its formation in 2001.