Enstar subsidiary receives ‘A’ rating from S&P

S&P Global Ratings has assigned an 'A' financial strength rating to a core operating subsidiary of Bermuda-based legacy re/insurer Enstar Group. The outlook is stable.

The ratings agency said Cavello Bay Reinsurance is the primary operating entity for assuming property/casualty run-off business for Enstar and makes up a “significant portion of the group's consolidated assets, liabilities, and capital”. 

S&P said Cavello Bay is “well capitalised” and benefits from the long-term commitment from Enstar. 

“The Bermudian-based subsidiary also serves as the group's designated insurer and is required to facilitate compliance of the group with the insurance solvency and supervision rules of the group supervisor, the Bermuda Monetary Authority,” S&P said. 

“Enstar has a strong competitive position as a leader in the global nonlife run-off market with over 115 companies and portfolios of business acquired since its inception in 1993. 

“The group has excellent claims-handling capabilities, evident from its record of profitably managing run-off loss reserve portfolios. We expect Enstar will continue executing large legacy transactions, utilizing Cavello Bay as its primary vehicle for growing net reserves.”

Matthew Kirk, Enstar’s chief financial officer, said: “The S&P Insurer Financial Strength Rating is further confirmation of our strong capital position. 

“The ‘A’ rating for Cavello Bay, our primary Bermuda reinsurer, recognises the resilience of our business model and will provide additional flexibility to structure legacy transactions in the future.”

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