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AXIS Advances Transition to Specialty Underwriter, Announces Loss Portfolio Transfer Reinsurance Agreement With Enstar on Reinsurance Segment Reserves
AXSAXIS Capital(AXS) Newsfilter·2024-12-16 21:10

Core Viewpoint - AXIS Capital and Enstar Group have entered into a loss portfolio transfer reinsurance agreement, which is expected to close in the first half of 2025, subject to regulatory approvals and customary conditions [1][2]. Group 1: Transaction Details - The LPT reinsurance agreement involves a 75% ground-up quota share, with AXIS retroceding 2.3billionofreinsurancesegmentreservestoEnstar[2].−Thetransactionprimarilyconcernscasualtyportfoliosrelatedtounderwritingyears2021andprior,totaling2.3 billion of reinsurance segment reserves to Enstar [2]. - The transaction primarily concerns casualty portfolios related to underwriting years 2021 and prior, totaling 3.1 billion as of September 30, 2024 [2]. - AXIS anticipates a benefit of approximately 60millionfromtheexcessofreservescededovertheconsiderationoverthecomingyears,basedonthepaymentpatternsofthesereserves[2].Group2:StrategicImplications−ThetransactionalignsAXIS′sbalancesheetwithitsunderwritingstrategyfocusedonspecialtyinsurancebusiness[4].−AXISaimstodriveorganicgrowth,reinvestinthebusiness,andmanagecapitalforshareholderbenefit,asstatedbyitsPresidentandCEO[4].−Enstar′sCEOhighlightedthetransactionasademonstrationofEnstar′smarket−leadingpositionanditscapabilitytoprovidesignificantreinsurancesolutions[4].Group3:CompanyBackgrounds−AXISCapitalisaglobalspecialtyunderwriterwithshareholders′equityof60 million from the excess of reserves ceded over the consideration over the coming years, based on the payment patterns of these reserves [2]. Group 2: Strategic Implications - The transaction aligns AXIS's balance sheet with its underwriting strategy focused on specialty insurance business [4]. - AXIS aims to drive organic growth, reinvest in the business, and manage capital for shareholder benefit, as stated by its President and CEO [4]. - Enstar's CEO highlighted the transaction as a demonstration of Enstar's market-leading position and its capability to provide significant reinsurance solutions [4]. Group 3: Company Backgrounds - AXIS Capital is a global specialty underwriter with shareholders' equity of 6.1 billion as of September 30, 2024, and has a strong financial strength rating [5]. - Enstar is a leading global insurance group known for innovative capital release solutions and has completed over 120 acquisitions since its inception in 2001 [6].