Enstar
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Enstar acquired 637,640 shares of James River in Q4 last year valued at nearly $6mn.
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Ratings could be lowered by one notch depending on regulatory restrictions on cash flow from Bermuda operating entities to non-operating holding companies, the ratings agency said.
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The San Francisco-headquartered alternative asset manager has invested $183mn in the run-off firm.
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The legacy giant also disclosed a smaller buyback from Stone Point, with CEO Dominic Silvester also investing an additional $10mn.
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The insurer has been working to build a reputation for favorable reserve development after past sins.
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During the period, the legacy business completed a $1.9bn LPT with QBE and a $245mn LPT with RACQ Insurance.
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The legacy carrier’s wholly owned subsidiary will reinsure 80% of RACQ’s motor vehicle compulsory third-party insurance liabilities of accident years 2021 and prior.
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The carrier attributed its results to strong investment returns.
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Inside P&C’s morning summary of the key stories to get you up to speed fast.
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The deal includes a diversified book of international and NA financial lines, European and NA reinsurance portfolios, and several US discontinued programs.
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The Canadian pension fund will retain 9.4% of the carrier’s voting shares.
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CFO Matthew Kirk assumed the role of principal accounting officer as of March 7.
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In tandem, the company elevated David Ni as chief strategy officer, Paul Brockman as chief operating officer and Matthew Kirk as chief financial officer.
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Following the completion of this transaction, Enhanzed Re became a wholly owned subsidiary of the legacy carrier.
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2022 represented a period of bumper legacy deal-making for the legacy carrier.
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RACQ will cede net reserves of approximately A$360mn (~$247mn), and Enstar will provide around A$200mn (~$130mn) of cover in excess of the ceded reserves.
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The deal regards international and North America financial lines, European and North American reinsurance portfolios, and several US discontinued programs.
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Enstar is conducting due diligence around taking on the rest of the Argo back book.
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The share purchases take the founder’s stake in the legacy firm to $124mn.
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Completion of the transaction followed receipt of the required regulatory approvals and satisfaction of other closing conditions.
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The carrier also reported run-off liability earnings of $109mn, or 3.7% in the third quarter of the year.
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The transaction will eliminate Enstar’s direct exposure to cat business and boost its book value.
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With the addition of roughly 512,000 shares, Enstar’s interest in Argo was valued at ~$62.7mn at the end of June.
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The exec warned that there would be “more casualties” of underpricing in the legacy market.
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The carrier was pushed to a net loss of $493mn by mark-to-market losses in its investment portfolio in Q2.
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The outgoing exec will remain as a board member, while chief strategy officer David Ni will lead the company’s M&A strategy going forward.
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The existing $770mn adverse development cover between the two parties has been absorbed as part of the deal.
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The legacy specialist has faced a downturn in profits following a bumper run of results through 2020 and 2021.
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The legacy carrier has made huge gains through its hedge fund strategy through 2020.
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Since joining the company in 2003, Orla Gregory has held increasingly senior roles, rising to acting CFO in September.
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Inside P&C’s news team runs you through the key developments from the last week.
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Enstar plans to use the offering's net proceeds to pay down outstanding debt, as well as finance acquisitions and working capital.
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The deal is the largest in Enstar’s history and sets Aspen up either for a sale to a strategic buyer or a return to the public markets.
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Investments in the InRe Fund suffered volatility, leading to net realized and unrealized losses of $285.2mn.
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Wolf will remain with the company to assist Gregory during a transition period lasting until September 30.