Enstar, Aspen strike massive $3bn loss portfolio transfer deal

Enstar Group has secured a significant $3.12 billion loss portfolio transfer (LPT) deal with fellow Bermudian re/insurer  Aspen Insurance Holdings.

Under the deal, one of Enstar’s wholly owned subsidiaries will reinsure losses incurred on or prior to December 31, 2019 on Aspen’s diverse mix of property, liability and specialty lines across the US, 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.

The deal will enable Aspen to free up capital as it continues to reposition its underwriting portfolio for the future.

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 October 1, 2021 effective date. The transaction is expected to close in the first half of 2022.

Dominic Silvester (pictured), Enstar’s chief executive officer, said: “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. 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.”

Mark Cloutier, Aspen’s executive chairman and group chief executive officer, said: “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.

“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.

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

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