Enstar Group Closes Transaction With Neon, Boosts Portfolio
Zacks Investment Research | Feb 19, 2018 10:37PM ET
Enstar Group Limited’s (NASDAQ:ESGR) Lloyd managing agency, StarStone Underwriting Limited, completed the previously announced reinsurance-to-close transaction with Neon Underwriting Limited for Enstar Group’s Syndicate 2008. The closure of this transaction is expected to help Enstar Group’s Syndicate 2008 undertake the liabilities of the 2015 underwriting year of Neon’s Syndicate 2468 (which comprised underwriting years starting from 2008 to 2015).
The transaction, first announced on Dec 20, 2017, satisfied the required regulatory approvals and got completed in the first quarter of 2018, well within the stipulated time frame. Following the completion of the transaction, Enstar Group assumed net reinsurance reserves of £337.8 million (about $456.4 million) pertaining to the portfolio and gross reserves of £402.2 million (about $543.4 million).
In fact, Enstar Group is likely to undertake the responsibility for claims handling and offer a complete finality to Neon post wrapping up of the transaction.
Enstar Group’s already strong relationship with Neon will possibly be further enhanced and cemented with the close of this deal. Notably, a similar transaction was completed in 2016. The latest reinsurance-to-close transaction will raise the total number of Enstar Group’s completed legacy transactions on Lloyd’s platform to 21 since its inception. This not only strengthens but also boosts the Multi line insurer’s position as one of the industry-leading providers of legacy solutions to the Lloyd’s market.
Enstar Group as a multi-faceted insurance group provides its clients with innovative capital release solutions and specialty underwriting capabilities. Given a strong track record of purchasing more than 80 companies and portfolios as well as closed legacy transactions, the Multi line insurer has made a name for itself in the industry. Banking on a sustained operational performance and solid underwriting capabilities, we expect this insurer to continue to undertake such transactions in the near term. Consequently, this will provide an impetus to the company’s already solid portfolio and accelerate its overall growth.
Shares of Enstar Group have outperformed the Zacks Investment Research
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