HAMILTON, Bermuda - Enstar Group Limited (NASDAQ: ESGR), a global insurance group, announced on Monday that it has entered an agreement through one of its subsidiaries to reinsure a substantial Workers’ Compensation portfolio from a subsidiary of SiriusPoint Ltd. The deal involves a loss portfolio transfer valued at approximately $400 million, covering underwriting years from 2018 to 2023.
In the transaction, SiriusPoint is expected to cede net reserves of around $400 million. In turn, Enstar's subsidiary will extend $200 million of coverage in excess of the ceded reserves. Moreover, the management of claims will transition to Enstar. This strategic move is pending regulatory approvals and the fulfillment of customary closing conditions.
Dominic Silvester, CEO of Enstar, commented on the agreement, emphasizing the company's proven expertise in the U.S. Workers' Compensation sector and its ability to structure and execute complex risk solutions. He also noted that this bespoke transaction is designed to bolster SiriusPoint's strategic, economic, and operational objectives.
Enstar, listed on NASDAQ, is known for its innovative capital release solutions and legacy acquisitions. Since its inception in 2001, the company has acquired 117 companies and portfolios. Enstar operates through a network of group companies spread across various international locations, including Bermuda, the United States, the United Kingdom, Continental Europe, and Australia.
The press release also included a cautionary note regarding forward-looking statements, which are not guarantees of future performance and are subject to risks and uncertainties. It highlighted that the transaction's completion is not assured and is contingent upon regulatory clearances and other closing conditions.
This announcement is based on a press release statement from Enstar Group Limited.
InvestingPro Insights
Amidst the news of Enstar Group Limited's (NASDAQ: ESGR) recent agreement to reinsure a Workers’ Compensation portfolio, InvestingPro data and tips reveal a compelling financial perspective for investors considering the company's stock.
Enstar's management has demonstrated confidence in the company's value through aggressive share buybacks, aligning with a high shareholder yield. Moreover, the company is trading at a low earnings multiple, which could signal an attractive valuation for investors.
According to InvestingPro data, Enstar boasts a market capitalization of $4.26 billion, with a remarkably low adjusted P/E ratio of 3.93 as of the last twelve months ending Q4 2023. The company's PEG ratio during the same period stands at 0.02, suggesting potential for growth relative to its earnings. The price to book ratio was recorded at 0.78, further underscoring the company's potential undervaluation in the market.
Enstar's financial health is further bolstered by the fact that its liquid assets exceed short-term obligations, and it has been profitable over the last twelve months. Interestingly, Enstar does not pay a dividend to shareholders, which could be an attractive feature for investors seeking companies that reinvest earnings back into the business for growth.
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