AXIS Capital Holdings and Enstar Group have announced a loss portfolio transfer (LPT) reinsurance agreement involving AXIS’s reinsurance segment business.
The deal, subject to regulatory approvals and other customary conditions, is expected to close in the first half of 2025.
Under the terms of the agreement, AXIS will retrocede US$2.3 billion of reinsurance segment reserves to Enstar through a 75% ground-up quota share structure. The transaction primarily involves casualty portfolios tied to underwriting years 2021 and prior, which totaled US$3.1 billion as of September 30.
AXIS anticipates recognizing a US$60 million benefit over several years from the excess of reserves ceded relative to the consideration, following the payment patterns of the reserves.
Claims control for the transferred reserves will remain with AXIS, though Enstar will hold certain administrative rights as part of the agreement. The reinsurance will be facilitated through Cavello Bay Reinsurance Limited, a wholly owned Enstar subsidiary with an S&P ‘A’ financial strength rating.
Vince Tizzio (pictured above), president and CEO of AXIS, said the transaction supports the company’s balance sheet strategy and its shift toward specialty insurance.
“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,” Tizzio said.
Dominic Silvester, CEO of Enstar, highlighted the agreement as an example of Enstar’s ability to deliver large-scale reinsurance solutions.
“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,” Silvester said.
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