Axis Capital Holdings Ltd. Tuesday said it has entered into a loss portfolio transfer reinsurance agreement with Enstar Group Ltd., under which it will retrocede $2.3 billion of reinsurance segment reserves.
The transaction concerns casualty portfolios related to 2021 and prior underwriting years totaling $3.1 billion on Sept. 30, Axis said in a statement.
The agreement will be with Enstar’s wholly owned Bermuda-based subsidiary Cavello Bay Reinsurance Ltd.
Axis said it expects to recognize an approximate $60 million benefit from the excess of reserves ceded over the consideration over the next several years, according to the payment patterns of these reserves.
The transaction is expected to close during the first half of 2025, subject to regulatory approvals and other customary conditions, the statement said.
Axis will maintain claims control for the covered reserves subject to certain administrative rights of Enstar.
The deal aligns with Axis’ underwriting strategy of “leaning into our specialty insurance business,” Vince Tizzio, president and CEO of Axis, said in the statement.
One source with knowledge of the deal but not authorized to speak for attribution told Business Insurance that Axis is not exiting the casualty reinsurance business.
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.