Enstar to reinsure RSA's £957m UK liability legacy

Bermuda legacy specialist Enstar has entered an agreement to reinsure RSA Insurance Group's UK liability legacy business of approximately £957 million.

Enstar's subsidiary will assume gross insurance reserves relating to 2005 and prior year business. Net insurance reserves for disposal are approximately £834 million and the reinsurance premium payable to Enstar's subsidiary is £799 million.

Stephen Hester, RSA group chief executive, said: "We are pleased to have achieved this valuable risk clean-up transaction with Enstar. It allows us to focus even more on driving the outperformance of RSA's continuing businesses. Earnings accretion, risk reduction and capital improvement are a happy combination to report.

"As previously indicated, we expect to deploy the capital resources released to benefit earnings and capital quality through additional debt retirement in 2017."

Dominic Silvester, Enstar’s Chief Executive Officer, commented: "RSA's sizable portfolio is an attractive opportunity for Enstar that substantially expands our presence in the UK employers' liability area, a market that has seen a great deal of activity recently. We welcome the opportunity to partner with RSA, a leading multinational insurance firm, in structuring and executing a transaction for this large legacy portfolio."

Following the initial reinsurance, which will transfer the economics of the portfolio up to the policy’s limits, the parties will pursue a portfolio transfer of this business under Part VII of the Financial Services and Markets Act 2000, which would provide legal finality for RSA’s obligations.

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