Enstar to reinsure $0.5bn in Zurich legacy asbestos portfolios

17-04-2019

A subsidiary of Bermuda-based Enstar Group has agreed to reinsure $0.5 billion in US asbestos and environmental liability insurance portfolios of a subsidiary of Zurich Insurance Group.

Specifically, Enstar’s subsidiary will assume gross insurance reserves of approximately $0.5 billion, relating to 1986 and prior year business. The closing of this deal is subject to regulatory approval and other closing conditions.

Asbestos claims came close to causing the collapse of the Lloyd’s insurance market in the 1990s, with losses reported all over the world and insurance companies struggling to deal with the resulting asbestos-related claims.

In 2018, Fitch raised its projection for ultimate all-time US industry incurred asbestos losses from its previous estimate of $90 billion to $100 billion.

Enstar has signed a number of legacy transactions relating to asbestos. At the start of 2018, Estar entered into an agreement to reinsure a portfolio of Allianz’s run-off business. Enstar’s subsidiary agreed to assume net reinsurance reserves of approximately $0.1 billion by reinsuring 50 percent of certain US workers' compensation and asbestos, pollution and toxic tort business originally assumed by San Francisco Reinsurance Company.

In 2017, Enstar purchased Dana Companies, a subsidiary of an auto parts manufacturer, for $91.5 million. Under the terms of this deal, Enstar agreed to take on the liabilities associated with personal injury asbestos claims and environmental claims associated with legacy manufacturing operations as well as assets held to fund obligations related to these liabilities.

And in 2016, Enstar agree to reinsurer another of Allianz’s run-off businesses. Enstar agreed to assume net reinsurance reserves of approximately $1.1 billion, by reinsuring 50 percent of certain workers’ compensation, construction defect, and asbestos, pollution and toxic tort business originally held by Fireman’s Fund Insurance Company.

Enstar, Zurich, Legacy, Run-off, Asbestos, Bermuda

Bermuda Re