Enstar reports uptick in profits over 2017


Enstar has reported that its consolidated net earnings for 2017 came to $311.5 million, up on the $264.8 million it made in 2016.

Net investment income for 2017 was $208.8 million, a rise on the $185.5 million it made in 2016. However, the company also reported that its net earned premiums for 2017 came to $613 million, down from the  $823.5 million it reported in 2016.

The company said that its business strategy includes generating growth through acquisitions and reinsurance transactions, particularly in its non-life run-off segment. Non-life run-off gross reserves were $5.9 billion as at December 31, 2017 and Enstar said that it continues to evaluate opportunities for future growth.

Enstar also stated that in January and February 2018, it entered into separate agreements to assume net reserves of approximately $811 million, $456.4 million and $275 million from Novae, Neon and Zurich Australia, respectively. Additionally, in December 2017, it assumed net reserves of $81.4 million from Allianz. The company completed the sale of its Pavonia and Laguna businesses during 2017, which formerly comprised the majority of its life and annuities segment. Enstar stated that it will continue to employ a disciplined approach when assessing, acquiring or managing portfolios of risk.

Enstar’s StarStone segment recorded net earnings of $2.8 million in 2017 compared to $25.2 million in 2016, a decrease of $22.4 million. The decrease was primarily attributable to the third quarter catastrophe losses of $53.4 million for hurricanes Harvey, Irma and Maria, partially offset by improved investment results. The combined ratio increased to 108.5 percent in 2017, compared to 98.2 percent in 2016, primarily due to the hurricanes in the third quarter of 2017. The catastrophe events contributed 11.7 points to the loss ratio and 11.8 points to the combined ratio. The decrease in net premiums written and earned is primarily due to the 35 percent whole account quota share reinsurance arrangement with KaylaRe, which covers all business written during underwriting years 2016 and 2017.

The company did post a caveat in its results however. It said that: “We have pursued and, as part of our strategy, will continue to pursue growth through acquisitions of reinsurance companies and portfolios of insurance and reinsurance business, primarily in our run-off segment. However, the acquisition and management of companies and portfolios in run-off is highly competitive, and driven by a number of factors, including proposed acquisition price, reputation, and financial resources. Some of our competitors have greater financial resources than we do, have been operating for longer than we have and have established long-term and continuing business relationships throughout the insurance and reinsurance industries, which can be a significant competitive advantage. As a result, we may not be able to compete successfully in the future for suitable acquisition candidates, and if we do not continue to acquire companies, we may not be able to achieve our strategic goals.”

Enstar, 2017, profit, run-off, expansion, results, StarStone

Bermuda Re