Enstar Group announced that a wholly-owned subsidiary has entered into an adverse development cover (ADC) reinsurance agreement with subsidiaries of James River Group Holdings, Ltd.
Under this agreement, Enstar’s subsidiary will provide an additional $75 million in coverage above the existing $160 million ADC reinsurance coverage extended to James River’s subsidiaries by State National Insurance Company, Inc. earlier this year.
This transaction aims to add further protection against adverse reserve development for US casualty exposures within James River's Excess & Surplus (E&S) Lines segment, covering accident years 2010 to 2023.
In addition to the ADC, Enstar’s subsidiary will invest $12.5 million in James River common stock. Completion of this transaction remains subject to regulatory approval and other standard closing conditions.
“We are pleased to work with James River on a bespoke solution that further de-risks their balance sheet and provides equity capital to take advantage of the robust E&S market,” said David Ni (pictured right), Enstar’s chief strategy officer.
Recently, Enstar also 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.
In October, Enstar also 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.
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