Insurance giant RSA has announced the disposal of UK legacy insurance liabilities to Enstar Group Limited.
The transaction, which initially takes the form of a reinsurance agreement, covers £834 million of undiscounted liabilities relating to business written in 2005 and the prior year. Around 75% of these liabilities have to do with asbestos, with the balance mainly comprising abuse, deafness, marine and aviation liabilities.
“We are pleased to have achieved this valuable risk clean-up transaction with Enstar,” said RSA group chief executive Stephen Hester.
“It allows us to focus even more on driving the outperformance of RSA’s continuing businesses. Earnings accretion, risk reduction and capital improvement are a happy combination to report,” he added.
Want the latest insurance industry news first? Sign up for our completely free newsletter service now.
One of Enstar’s subsidiaries, which will reinsure the RSA legacy business, will assume gross insurance reserves of approximately £957 million. Reinsurance premium payable to the firm is £799 million.
“RSA’s sizable portfolio is an attractive opportunity for Enstar that substantially expands our presence in the UK employers’ liability area, a market that has seen a great deal of activity recently,” said Enstar CEO Dominic Silvester.
“We welcome the opportunity to partner with RSA, a leading multinational insurance firm, in structuring and executing a transaction for this large legacy portfolio,” Silvester went on to say.
Related stories:
RSA shakes up Global Risk Solutions operating model
RSA hires from Zurich to boost global consulting team
