Enstar Group Limited Reports Third Quarter Results

• Net Loss of $444 million and Return on Equity of (10.6)%, pushed by unrealized losses on fastened revenue securities in rising rate of interest atmosphere
• Book Value per Ordinary Share of $208.60 ($206.25 Adjusted*), as of September 30, 2022
• Entered right into a reinsurance settlement with Argo for floor up reserves of $746 million and accomplished settlement with Probitas Managing Agency Limited to cowl 2018 and prior yr of account exposures of Syndicate 1492
• Completed commutation of Enhanzed Re’s disaster e book and acquired regulatory approval to novate Enhanzed Re’s portfolio of deferred annuities and complete life insurance policies, which is anticipated to shut early November

HAMILTON, Bermuda, Nov. 03, 2022 (GLOBE NEWSWIRE) — Enstar Group Limited (Nasdaq: ESGR) filed its quarterly report on Form 10-Q with the SEC earlier right now. An audio presentation reviewing the third quarter 2022 outcomes with expanded commentary is offered on Enstar’s investor relations web site at investor.enstargroup.com.

Third Quarter 2022 Highlights:

• Net lack of $444 million, or $26.10 per diluted odd share, in comparison with $196 million, or $10.68 per diluted odd share, for the three months ended September 30, 2021.
• Return on fairness (“ROE”) of (10.6)% and Adjusted ROE* of (2.9)% for the quarter in comparison with (2.9)% and (2.8)%, respectively, within the third quarter 2021. ROE was impacted by $395 million of web unrealized losses arising primarily from rate of interest will increase on fastened maturity portfolios which might be categorised as buying and selling, mixed with $151 million of web unrealized losses in Enstar’s non-core portfolios.
• Our Group regulatory solvency, or financial steadiness sheet, strengthened through the third quarter because of:
  • the influence of a better low cost charge on our reserves; and
  • our core fastened revenue securities being shorter in length than our insurance liabilities.
• Run-off legal responsibility earnings (“RLE”) of $109 million, or 3.7% have been pushed by reductions within the worth of sure portfolios which might be held at honest worth and favorable growth on our employees’ compensation and marine, aviation and transit traces of business, partially offset by opposed growth on our basic casualty and motor traces of business.
• Entered into loss portfolio switch (“LPT”) settlement with a wholly-owned subsidiary of Argo Group International Holdings, Ltd. (“Argo”) overlaying quite a few its U.S. casualty insurance portfolios, together with development, for accident years 2011 to 2019. The LPT settlement covers floor up reserves of $746 million, and a further $275 million of canopy in extra of $821 million, as much as a coverage restrict of $1.1 billion. Argo will retain a loss hall of $75 million as much as $821 million. The closing of the transaction is topic to customary regulatory approvals and different closing situations and is anticipated to be accomplished by the tip of 2022.

* Non-GAAP measure; confer with “Non-GAAP Financial Measures” additional beneath for explanatory notes and a reconciliation to probably the most immediately comparable GAAP measure.

Dominic Silvester, Enstar CEO, mentioned:

“The significant rise in interest rates to combat high inflation continues to drive unrealized bond losses in our investment portfolio. However, we expect our bond portfolio to recover these unrealized losses over time as these bonds will amortize back to par or full principal value as they reach maturity.

Operationally, we are pleased with the accretive transactions signed with Argo and Probitas, as well as our robust pipeline of opportunities. These transactions further demonstrate Enstar’s ability to provide capital relief solutions to partners of varying size and jurisdictions.

Our balance sheet remains strong, and we have the capacity to meet market demand. We will continue to provide tailored solutions to our clients, drive positive claims outcomes and invest for the long term. We are confident that this focus will provide exceptional returns for our stakeholders.”

Nine months ended September 30, 2022 Highlights:

• Net lack of $1.2 billion, or $70.59 per diluted odd share, in comparison with web earnings of $365 million, or $17.53 per diluted odd share, for the 9 months ended September 30, 2021.
• ROE of (21.8)% and Adjusted ROE* of (7.0)%, in comparison with 5.9% and seven.7%, respectively, for the 9 months ended September 30, 2021. ROE was impacted by unrealized losses arising from rate of interest will increase on fastened maturity portfolios which might be categorised as buying and selling mixed with unrealized losses in Enstar’s non-core portfolios.
• Annualized RLE of three.8% and Annualized Adjusted RLE* of 0.5%, in comparison with 2.5% and 1.4%, respectively, for the 9 months ended September 30, 2021. RLE benefited from reductions within the worth of sure portfolios which might be held at honest worth, favorable growth on our employees’ compensation, skilled indemnity/administrators and officers and marine, aviation and transit traces of business, and favorable outcomes on Enstar’s inactive disaster packages held by Enhanzed Re. RLE was impacted by opposed growth on our basic casualty and motor traces of business.
• Annualized whole funding return (“TIR”) of (8.7)% and Annualized Adjusted TIR* of (1.0)%, in comparison with 2.8% and 4.1%, respectively, for the 9 months ended September 30, 2021. Recognized funding outcomes have been impacted by the mixture of rate of interest will increase, widening credit score spreads and fairness market declines.

* Non-GAAP measure; confer with “Non-GAAP Financial Measures” additional beneath for explanatory notes and a reconciliation to probably the most immediately comparable GAAP measure.

Key Financial and Operating Metrics

We use the next GAAP and Non-GAAP measures to watch the efficiency of and handle the corporate:

pp – Percentage level(s)

bp – Basis level(s)

*Non-GAAP measure; confer with “Non-GAAP Financial Measures” additional beneath for explanatory notes and a reconciliation to probably the most immediately comparable GAAP measure.

Results of Operations by Segment – For the Three and Nine Months Ended September 30, 2022 and 2021

Run-off Segment

The following is a dialogue and evaluation of the outcomes of operations for our Run-off phase.

Three Months Ended September 30, 2022 versus 2021: Net earnings from our Run-off phase decreased by $28 million, primarily because of:

• A $25 million lower in favorable PPD, pushed by a $26 million lower within the discount in estimates of web final losses.
  • Results for the three months ended September 30, 2022 have been pushed by $54 million of favorable growth on our employees’ compensation line of business because of favorable declare settlements, most notably within the 2018 and 2019 acquisition years, and $28 million of favorable growth on our marine, aviation and transit line of business because of decrease declare exercise, referring to the 2014, 2018 and 2019 acquisition years; partially offset by
  • Adverse growth within the 2018, 2020 and 2021 acquisition years on our basic casualty and motor traces of business of $21 million and $19 million, respectively, primarily because of worse than anticipated claims expertise and opposed growth on claims.
  • Results for the three months ended September 30, 2021 have been primarily pushed by favorable growth on our employees’ compensation, property, development defect and marine, aviation and transit traces because of higher than anticipated claims expertise and favorable outcomes from actuarial opinions.
• A discount in different revenue of $10 million, primarily pushed by decrease favorable prior interval growth associated to our defendant A&E liabilities compared to the prior interval; and
• Reductions in web premiums earned that have been higher than the reductions in present interval web incurred losses and LAE and acquisition prices, following our exit of our StarStone International business starting in 2020; partially offset by
• A lower generally and administrative bills of $13 million, primarily pushed by a continued lower in salaries and advantages and different prices following our exit of our StarStone business starting in 2020 and a discount in IT prices because of diminished challenge exercise.

Nine Months Ended September 30, 2022 versus 2021: Net earnings from our Run-off phase elevated by $27 million, primarily because of:

• A $48 million improve in favorable PPD, pushed by a $44 million improve within the discount in estimates of web final losses.
  • Results for the 9 months ended September 30, 2022 have been pushed by favorable growth of $104 million on our employees’ compensation line of business because of favorable declare settlements, most notably within the 2018 and 2021 acquisition years. We additionally had favorable growth of $85 million on our skilled indemnity/administrators and officers line of business referring to the 2018 and 2021 acquisition years and favorable growth of $38 million on our marine, aviation and transit traces of business referring to the 2014, 2018 and 2019 acquisition years because of decrease claims exercise; partially offset by
  • Adverse growth on our basic casualty and motor traces of business of $31 million and $20 million, respectively, most notably impacting the 2018, 2020 and 2021 acquisition years, because of worse than anticipated claims expertise and opposed growth on claims.
  • Results for the 9 months ended September 30, 2021 have been primarily associated to favorable growth on our employees’ compensation, property and marine, aviation and transit traces of business because of higher than anticipated claims expertise and favorable outcomes from actuarial opinions.
• A lower generally and administrative bills of $30 million, primarily pushed by a continued lower in salaries and advantages and different prices following our exit of our StarStone business starting in 2020 and a discount in IT prices because of diminished challenge exercise; partially offset by
• A discount in different revenue of $29 million, primarily pushed by decrease favorable prior interval growth associated to our defendant A&E liabilities; and
• Reductions in web premiums earned that have been higher than the reductions in present interval web incurred losses and LAE and acquisition prices, following our exit of our StarStone International business starting in 2020.

Investments Segment

The following is a dialogue and evaluation of the outcomes of operations for our Investments phase.

Three and Nine Months Ended September 30, 2022 versus 2021: Net loss from our Investments phase was $493 million and $1.3 billion for the three and 9 months ended September 30, 2022, respectively, in comparison with web losses of $203 million and web earnings of $419 million for the three and 9 months ended September 30, 2021, respectively. The unfavorable actions of $290 million and $1.8 billion, respectively, have been primarily because of:

• An improve in web realized and unrealized losses on our fastened revenue securities of $328 million and $968 million, respectively, pushed by rising rates of interest and widening credit score spreads;
• Net realized and unrealized losses on our different investments, together with equities, of $164 million and $468 million, respectively, compared to web losses of $187 million and web positive aspects of $294 million, respectively, within the comparative intervals, primarily pushed by damaging efficiency from our public equities, CLO equities and hedge funds because of vital volatility in world fairness markets and widening excessive yield credit score spreads; and
• An $89 million lower in earnings from fairness methodology investments for the 9 months ended September 30, 2022, largely because of our acquisition of the controlling curiosity in Enhanzed Re, efficient September 1, 2021 (consolidated web loss from Enhanzed Re was $231 million for the 9 months ended September 30, 2022). Prior to that date, the outcomes of Enhanzed Re have been recorded in earnings from fairness methodology investments throughout the Investments phase; partially offset by:
• Increases in our web funding revenue of $22 million and $65 million, respectively, which is primarily because of a rise in our common mixture fastened revenue belongings because of new business through the previous yr, along with the funding of recent premium and reinvestment of fastened maturities at larger yields and the influence of rising rates of interest on the $2.7 billion of our fastened maturity investments which might be topic to floating rates of interest. Our floating charge investments generated elevated web funding revenue of $16 million and $39 million, respectively, which equates to a rise of 257 and 165 foundation factors, respectively, on these investments compared to the prior interval.

Total funding losses on the fastened revenue securities that help our Enhanzed Re life reinsurance business for the three and 9 months ended September 30, 2022 have been $141 million and $269 million, respectively.

Income and Earnings by Segment – For the Three and Nine Months Ended September 30, 2022 and 2021

⁽¹⁾ Other revenue (expense) for company and different actions consists of the amortization of honest worth changes related to the acquisition of DCo LLC and Morse TEC LLC.

⁽²⁾ Net incurred losses and LAE for company and different actions consists of the amortization of deferred cost belongings (“DCAs”) on retroactive reinsurance contracts, honest worth changes related to the acquisition of firms and the modifications within the low cost charge and danger margin elements of the honest worth of belongings and liabilities associated to our assumed retroactive reinsurance contracts for which we now have elected the honest worth choice. The three and 9 months ended September 30, 2022 included accelerated amortization of $19 million and $115 million, respectively, equivalent to elevated favorable prior interval growth (“PPD”) on web final liabilities recorded in our Run-off phase. There was $11 million and $22 million accelerated amortization for the three and 9 months ended September 30, 2021.

For extra element on the Assumed Life phase, the Legacy Underwriting phase and Corporate and different actions, please confer with the Form 10-Q.

Cautionary Statement

This press launch accommodates sure forward-looking statements throughout the that means of the Private Securities Litigation Reform Act of 1995. These statements embrace statements concerning the intent, perception or present expectations of Enstar and its administration staff. Investors are cautioned that any such forward-looking statements converse solely as of the date they’re made, aren’t ensures of future efficiency and contain dangers and uncertainties, and that precise outcomes might differ materially from these projected within the forward-looking statements because of varied components. Important danger components concerning Enstar will be discovered underneath the heading “Risk Factors” in our Form 10-Ok for the yr ended December 31, 2021 and are integrated herein by reference. Furthermore, Enstar undertakes no obligation to replace any written or oral forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained herein, to replicate any change in its expectations with regard thereto or any change in occasions, situations, circumstances or assumptions underlying such statements, besides as required by regulation.

About Enstar

Enstar is a NASDAQ-listed main world (re)insurance group that gives capital launch options by its community of group firms in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and different worldwide places. A market chief in finishing legacy acquisitions, Enstar has acquired over 110 firms and portfolios since its formation in 2001. For additional details about Enstar, see www.enstargroup.com.

Contacts

For Investors: Matthew Kirk ([email protected])

For Media: Jenna Kerr ([email protected])

ENSTAR GROUP LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)

For the Three and Nine Months Ended September 30, 2022 and 2021

ENSTAR GROUP LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

As of September 30, 2022 and December 31, 2021

Non-GAAP Financial Measures

In addition to our key monetary measures offered in accordance with GAAP, we current different non-GAAP monetary measures that we use to handle our business, evaluate our efficiency in opposition to prior intervals and in opposition to our friends, and as efficiency measures in our incentive compensation program.

These non-GAAP monetary measures present a further view of our operational efficiency over the long-term and supply the chance to research our ends in a approach that’s extra aligned with the way during which our administration measures our underlying efficiency.

The presentation of those non-GAAP monetary measures, which can be outlined and calculated in another way by different firms, is used to reinforce the understanding of sure elements of our monetary efficiency. It isn’t meant to be thought of in isolation, superior to, or as an alternative to the immediately comparable monetary measures ready in accordance with GAAP.

Some of the changes mirrored in our non-GAAP measures are recurring objects, such because the exclusion of changes to web realized and unrealized (positive aspects)/losses on fastened maturity investments acknowledged in our revenue assertion, the honest worth of sure of our loss reserve liabilities for which we now have elected the honest worth choice, and the amortization of honest worth changes.

Management makes these changes in assessing our efficiency in order that the modifications in honest worth because of rate of interest actions, that are utilized to some however not all of our belongings and liabilities because of preexisting accounting elections, don’t impair comparability throughout reporting intervals.

It is vital for the readers of our periodic filings to know that these things will recur from interval to interval.

However, we exclude these things for the aim of presenting a comparable view throughout reporting intervals of the influence of our underlying claims administration and funding with out the impact of rate of interest fluctuations on belongings that we anticipate to carry to maturity and non-cash modifications to the honest worth of our reserves.

Similarly, our non-GAAP measures replicate the exclusion of sure objects that we deem to be nonrecurring, uncommon or rare when the character of the cost or acquire is such that it isn’t fairly seemingly that such merchandise might recur inside two years, nor was there an analogous cost or acquire within the previous two years. This consists of changes associated to cut price buy positive aspects on acquisitions of companies, web positive aspects or losses on gross sales of subsidiaries, web belongings of held on the market or disposed subsidiaries categorised as discontinued operations and different objects that we individually disclose.

We have offered the outcomes and GAAP reconciliations for these measures additional beneath. The following tables current extra info on every non-GAAP measure.

⁽¹⁾ Comprises the low cost charge and danger margin elements.

⁽²⁾ As described in Note 5 to our consolidated monetary statements in our Annual Report on Form 10-Ok for the yr ended December 31, 2021.

Reconciliation of GAAP to Non-GAAP Measures

The desk beneath presents a reconciliation of BVPS to Adjusted BVPS*:

⁽¹⁾ Equity includes Enstar odd shareholders’ fairness, which is calculated as Enstar shareholders’ fairness much less most popular shares ($510 million) previous to any non-GAAP changes.

The tables beneath current a reconciliation of Annualized ROE to Annualized Adjusted ROE*:

⁽¹⁾ Net (loss) earnings includes web (loss) earnings attributable to Enstar odd shareholders, previous to any non-GAAP changes. Opening fairness includes Enstar odd shareholders’ fairness, which is calculated as opening Enstar shareholders’ fairness much less most popular shares ($510 million), previous to any non-GAAP changes.

⁽²⁾ Represents the web realized and unrealized losses (positive aspects) associated to fastened maturity securities. Our fastened maturity securities are held immediately on our steadiness sheet and likewise throughout the “Funds held – directly managed” steadiness.

⁽³⁾ Comprises the low cost charge and danger margin elements.

⁽⁴⁾ Represents an aggregation of the tax expense or profit related to the precise nation to which the pre-tax adjustment relates, calculated on the relevant jurisdictional tax charge.

⁽⁵⁾ Represents the influence of the changes on the web earnings (loss) attributable to noncontrolling pursuits related to the precise subsidiaries to which the changes relate.

*Non-GAAP measure.

⁽¹⁾ Net (loss) earnings includes web (loss) earnings attributable to Enstar odd shareholders, previous to any non-GAAP changes. Opening fairness includes Enstar odd shareholders’ fairness, which is calculated as opening Enstar shareholders’ fairness much less most popular shares ($510 million), previous to any non-GAAP changes.

⁽²⁾ Represents the web realized and unrealized losses (positive aspects) associated to fastened maturity securities. Our fastened maturity securities are held immediately on our steadiness sheet and likewise throughout the “Funds held – directly managed” steadiness.

⁽³⁾ Comprises the low cost charge and danger margin elements.

⁽⁴⁾ Represents an aggregation of the tax expense or profit related to the precise nation to which the pre-tax adjustment relates, calculated on the relevant jurisdictional tax charge.

⁽⁵⁾ Represents the influence of the changes on the web earnings (loss) attributable to noncontrolling pursuits related to the precise subsidiaries to which the changes relate.

*Non-GAAP measure.

The tables beneath current a reconciliation of PPD to Adjusted PPD* and Annualized RLE to Annualized Adjusted RLE*:

⁽¹⁾ Comprises the low cost charge and danger margin elements.

*Non-GAAP measure.

⁽¹⁾ Comprises the low cost charge and danger margin elements.

*Non-GAAP measure.

The tables beneath current a reconciliation of our Annualized TIR to our Annualized Adjusted TIR*:

⁽¹⁾ This quantity is a two and 4 interval common of the whole investable belongings for the three and 9 months ended September 30, 2022 and 2021, respectively, as offered above, and is comprised of quantities disclosed in our quarterly and annual U.S. GAAP consolidated monetary statements.

⁽²⁾ Annualized TIR % is calculated by dividing the annualized TIR ($) by common mixture invested belongings, at honest worth.

⁽³⁾ This quantity is a two and 4 interval common of the adjusted investable belongings* for the three and 9 months ended September 30, 2022 and 2021, respectively, as offered above.

⁽⁴⁾ Annualized adjusted TIR %* is calculated by dividing the annualized adjusted TIR* ($) by adjusted common mixture invested belongings, at honest worth*.

*Non-GAAP measure.

Contact: Enstar Communications
Telephone: +1 (441) 292-3645