Enstar-Allianz joint venture wraps up
Enhanzed Reinsurance – 75.1% of which is owned by Enstar Group subsidiary Cavello Bay Reinsurance and 24.9% by Allianz SE – will likely be no extra.
“Cavello Bay and Allianz have agreed to a sequence of transactions that can (a) commute or novate the entire reinsurance contracts written by Enhanzed Re, (b) repay the $70 million of subordinated notes issued by Enhanzed Re to an affiliate of Allianz, and (c) distribute Enhanzed Re’s extra capital to Cavello Bay and Allianz in accordance with their respective fairness possession,” introduced Enstar.
“Pursuant to the grasp settlement, the entire insurance coverage liabilities ceded to Enhanzed Re by associates of Enstar will likely be commuted or novated to Cavello Bay. All the insurance coverage liabilities ceded to Enhanzed Re by associates of Allianz will likely be commuted to Allianz or novated to Cavello Bay, apart from one reinsurance transaction associated to a block of annuity insurance policies written by an affiliate of Allianz.”
In accordance with Enstar, every commutation and novation will likely be priced primarily based on the estimated quantity of the liabilities being commuted or novated as of June 30. As for the annuities portfolio, it’s been agreed that Allianz and Cavello Bay will cooperate in good religion to novate this to a 3rd get together on phrases described as “commercially cheap”.
All commutations and novations are anticipated to happen inside the yr.
“Completion of the commutations and novations contemplated by the grasp settlement will remove Enstar’s direct publicity to disaster enterprise and is anticipated to lead to an approximate $62 million improve in Enstar’s e book worth, which represents a rise of roughly $3.57 in e book worth per share, unique of the potential influence of a future novation of the annuities portfolio,” added Enstar, which reported complete acknowledged and unrecognized funding losses of $1.3 billion for the primary half of 2022.
