Enstar Group Limited (NASDAQ:ESGR) Q3 2022 Earnings Conference Call November 3, 2022 9:00 AM ET

Company Participants

Matthew Kirk - Group Treasurer and Head of IR

Dominic Silvester - CEO

Orla Gregory - CFO

Conference Call Participants

Operator

Matthew Kirk

Hello everyone, I am Matthew Kirk, Group Treasurer and Head of Investor Relations. Thank you for listening to Enstar’s Third Quarter 2022 Earnings Audio Review with CEO Dominic Silvester and CFO Orla Gregory.

Before we begin, I’d like to remind everyone that this presentation contains forward- looking statements and non-GAAP financial measures. Forward-looking statements in this presentation include but are not limited to statements about Enstar’s expectations for pending and future transactions, run-off liability earnings, the performance of its investment portfolio and the impact of rising interest rates on Enstar’s business.

These statements are inherently subject to risks, uncertainties and assumptions that may cause actual results to differ materially from the statements being made as of the date of this Update or in the future. Additional important information regarding these statements and measures is outlined in the text that appears below the link to this recording. With that, I will turn it over to Dominic.

Dominic Silvester

Thank you, Matt and thank you to all of those listening today.

Enstar had an active third quarter from an operational standpoint, and we continued to deliver on our core strategy of providing attractive capital release solutions to our partners.

While our investment portfolio continued to be impacted by unrealized losses driven by inflation and rising rates, as was the norm throughout the insurance industry, we remain confident that our investment strategy will continue to generate strong returns over the long term. Further, Orla will discuss later how Enstar expects to benefit from the rising interest rate environment.

During the quarter, we announced our Loss Portfolio Transfer agreement with Argo, with reserves of approximately $750 million dollars. This continues our trend of executing on larger-scale transactions, where we have competitive advantages to deliver value to our partners and shareholders.

We announced our split RITC transaction with Probitas which aligns our continued commitment to servicing Lloyd’s and further demonstrates our ability to provide tailored solutions to the full market.

From a strategic perspective, we completed the commutation of Enhanzed’s Catastrophe book, and as a result, expect to record approximately $60 million dollars in favorable development in the fourth quarter. We later entered into a novation agreement to sell Enhanzed’s portfolio of deferred annuities and whole life policies. This transaction has received regulatory approval and we expect closing next week.