Axis agrees to loss portfolio transfer for some reinsurance reserves

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.

“This transaction aligns our balance sheet with our previously stated specialty underwriting strategy. This LPT agreement is not at all a statement on our market positioning – Axis remains committed to our insurance and reinsurance specialist lines of business,” an Axis spokesman said.