Enstar, QBE complete deal on loss portfolio transfer

Transaction spans diversified portfolio of business

Enstar, QBE complete deal on loss portfolio transfer

Insurance News

By Terry Gangcuangco

Enstar Group, which has acquired more than 110 companies and portfolios since its holding company was formed in 2001, has closed another deal.

First announced in February by QBE Insurance Group, the now completed transaction is a loss portfolio transfer between wholly-owned Enstar subsidiaries and certain subsidiaries of QBE.

The deal features what was described as a “diversified” book of business that spans international and North America financial lines, European and North American reinsurance portfolios, and several discontinued programs in the US.   

In a new announcement by Enstar, the global insurance group said: “Enstar’s subsidiaries assumed net loss reserves from QBE of $1.9 billion and will provide approximately $900 million of cover in excess of the ceded reserves on business largely underwritten between 2010 and 2018.

“The amount of net loss reserves assumed, as well as the settlement and limit amounts provided in the master agreement, will be adjusted for claims paid between January 1, 2023 and the closing date of the transaction, pursuant to the terms of the contract.”

In an interview with Insurance Business earlier this year, QBE group chief executive Andrew Horton shared that entering the reinsurance transaction would allow him to focus on their future as an organization instead of worrying about something from the past possibly hurting QBE.

“The good thing it does is it looks at some of our historic reserves from underwriting years between 2010 and 2018 and reinsures any volatility in those reserves out,” noted the CEO at the time. “One of the problems QBE has had is being hit by negative prior year reserve development.

“Now we just don’t need to worry about them – it’s taking a whole chunk, $1.9 billion of reserves, which historically had not performed well for us... I think it’s a good thing to do, because then we don’t keep worrying about the things of the past.”

According to Horton, the cost of the reinsurance was $100 million.

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