AXIS advances transition to specialty underwriter
AXIS Capital Holdings and Enstar Group have entered into a loss portfolio transfer reinsurance agreement covering a portfolio of reinsurance segment business. 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.
Under the LPT reinsurance agreement, which is structured as a 75% ground-up quota share, AXIS will retrocede to Enstar $2.3 billion of reinsurance segment reserves. This transaction is predominantly attributable to casualty portfolios related to 2021 and prior underwriting years totaling $3.1 billion at September 30th . 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 Limited.
“This transaction aligns our balance sheet with our previously stated underwriting strategy of leaning into our specialty insurance business. 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.” – Vince Tizzio, President and CEO of AXIS.
“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. We look forward to building a lasting partnership with AXIS, a leading provider of specialty lines insurance and reinsurance.” – Dominic Silvester, Enstar’s Chief Executive Officer.
