Enstar Group announced that its subsidiary, Cavello Bay Reinsurance Limited, has acquired a Bermuda-based Class 3B insurer and segregated accounts company.
The acquired reinsurer, which had $66 million in shareholders' equity as of July 2024, underwrote property reinsurance on behalf of third-party investors between 2020 and 2023. The risk was assumed through retrocession agreements facilitated by a fronting carrier.
Following the acquisition, the reinsurer will be merged into Cavello Bay, with a consolidated and amended retrocession agreement between the fronting carrier and Cavello Bay set to take effect.
Dominic Silvester (pictured above), CEO of Enstar, noted that the transaction marks Enstar’s second recent acquisition in the property insurance-linked securities (ILS) sector, which he sees as a growth market for legacy solutions.
"This acquisition is our second transaction in the property ILS space in recent months, which we see as a growth market for legacy solutions. The deal structure eliminates collateral requirements, demonstrating the benefit of Cavello Bay’s strong balance sheet and financial strength rating,” Silvester said.
Enstar Group, listed on NASDAQ, provides capital release solutions across a global network with operations in Bermuda, the United States, the United Kingdom, Europe, Australia, and other international markets. The company, recognized for its focus on legacy acquisitions, has completed over 120 acquisitions of companies and portfolios since its inception.
In other recent developments, Enstar Group announced that one of its wholly-owned subsidiaries has completed a loss portfolio transfer (LPT) transaction with a subsidiary of SiriusPoint Ltd.
The transaction, which reinsures a $400 million portfolio of workers' compensation business, covers underwriting years 2018 to 2023.
Under the agreement, SiriusPoint will cede net reserves of approximately $400 million. Enstar’s subsidiary will provide $200 million in coverage beyond the ceded reserves and claims management responsibilities will transfer to Enstar.
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