Enstar creates reinsurer KaylaRe and shakes up management

16-12-2016

Enstar Group (Enstar) has introduced KaylaRe, a Bermuda-based, Class 4 reinsurer, offering a diversified range of specialty reinsurance to the global insurance market.

KaylaRe launches with initial capital of $620 million, backed by a $300 million investment from Enstar; $270 million from funds managed by Hillhouse Capital Management, a global investment manager with over $25 billion in assets under management (“Hillhouse”); and $50 million from funds managed by Stone Point Capital (Stone Point), a financial services-focused private equity firm with aggregate committed capital of approximately $13 billion.

KaylaRe aims to deliver superior risk-adjusted returns over market cycles through a diversified asset allocation and selective underwriting.

KaylaRe has entered into a 35 percent quota share agreement with StarStone, Enstar’s global underwriting subsidiary, and loss portfolio transfer agreements with Enstar for certain legacy business.

Over time, KaylaRe expects to develop and write third-party premium, and to participate in certain future Enstar transactions.

Enstar and Hillhouse will act as the exclusive reinsurance manager and the primary investment manager to KaylaRe, respectively. KaylaRe will also engage other investment managers.

In connection with the launch of KaylaRe, Nick Packer, a co-founder of Enstar, has been appointed CEO of KaylaRe.

Packer brings nearly 30 years of industry experience to KaylaRe. He has served as Enstar’s executive vice president (VP) and joint-chief operating officer (COO) since 2001 and StarStone’s executive chairman and CEO since 2014.

Packer will remain on the StarStone board as a non-executive director.

“KaylaRe brings Enstar together with partners Hillhouse and Stone Point to create a unique global reinsurer,” said Dominic Silvester, Enstar’s CEO.

“KaylaRe has great performance potential, and a dynamic and proven leader in Nick Packer, who has been a core contributor to Enstar’s growth and success. He has shown tremendous commitment to our investment in KaylaRe, and, while he will be greatly missed at Enstar, I look forward to working closely with him in his new role.”

Packer said: “KaylaRe is a differentiated total return reinsurer, and it is an honour to lead this company from its inception. Through Enstar, we have long-term access to a high-quality, diversified portfolio of low volatility specialty insurance risks and supporting infrastructure.

“Further, the additional investment and support of Hillhouse and Stone Point provide KaylaRe with the capability to create substantial incremental value for shareholders through market cycles.”

With the launch of KaylaRe, Enstar is also today announcing several management changes, effectively immediately:

Paul O’Shea has been named as president of Enstar and executive chairman of StarStone. O’Shea, a co-founder of Enstar, has served as executive VP and joint-COO and a member of Enstar’s board of directors since 2001, and he has been primarily responsible for mergers and acquisitions (M&A) at the company.

Orla Gregory has been appointed COO of Enstar. Gregory has served as chief integration officer since 2015. Previously, she served as Executive VP, M&A, and has held various other senior roles in her 13-year career with Enstar.

Paul Brockman and David Atkins will take on broader responsibility for Enstar’s core insurance and legacy activity, including oversight of claims, commutations, and ceded reinsurance.

Brockman, CEO of Enstar US, joined Enstar in 2012 and previously served as US president and COO and head of commutations.

Atkins, CEO of Enstar EU and global head of claims, has been with Enstar since 2003.

Demian Smith has been named group CEO of StarStone. Smith most recently served as CEO of StarStone’s International segment and chairman of its underwriting committee.

Additionally, David Message has been named chief underwriting officer of StarStone.

Silvester said, “I am pleased to announce these appointments today, which signal the robust capabilities, diverse industry experience and collective strength of Enstar’s leadership team. I look forward to working with this talented group as we lead Enstar toward further growth and success.”

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