Enstar, Maiden agree $675m ADC deal for AmTrust quota share business

Bermuda-based Enstar Group has terminated its  $2.68 billion loss portfolio transfer (LPT) deal with Maiden Holdings, and replaced it with a new $675 million adverse development cover (ADC).

Under the agreement announced in November 2018, Enstar would have assumed loss reserves of approximately $2.68 billion associated with quota share reinsurance contracts that Maiden Bermuda has with AmTrust Financial Services.

As part of the new deal with Maiden Re, an Enstar subsidiary will enter into an adverse development cover reinsurance agreement with respect to Maiden Re’s quota share reinsurance contracts with AmTrust Financial Services and its subsidiaries, for losses incurred on or prior to December 31, 2018 in excess of a $2.44 billion retention.

Enstar said the figure may be adjusted based upon Maiden’s final year end reserves for the underlying business, up to a $675 million limit. The premium payable by Maiden Re will be $500 million.

The companies have signed the new agreement, terminating and releasing each other from their respective obligations under their previously disclosed deal.

The transaction is expected to close in the first half of 2019.

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