Bermudan re/insurer Enstar has inked a retrocession agreement with Maiden Reinsurance for a loss portfolio transfer.
Under the agreement, a subsidiary of Enstar will assume loss reserves of around $2.68bn related to Maiden Bermuda‘s quota share reinsurance contracts with AmTrust Financial Services.
“The retrocession will apply to losses arising and/or claims made on or prior to June 30, 2018, and loss reserves assumed will be subject to adjustment for paid losses since such date,” the companies said.
The agreement is pending regulatory nod and other closing conditions.
The latest move comes two months after Enstar’s announcement to acquire Maiden Reinsurance North America for $307.5m.
Meanwhile, Maiden reported a net loss attributable to common shareholders of $308.8m for the third quarter of 2018, compared to a loss of $63.6m a year ago.
Net loss and loss adjustment expenses increased to $600.3m from $370.8m in the previous year.
The loss ratio in the third quarter of 2018 stood at 115%, versus 80.6% last year. The group’s gross premiums written increased to $484.5m from $443m a year earlier.
Maiden CFO and COO Patrick Haveron said: “During the third quarter, we also took the opportunity to materially strengthen our carried loss reserves and position Maiden for profitable future results.
“Our announcement today with Enstar brings additional certainty and finality to the steps we have taken. Upon completion of all of the strategic transactions announced since August, Maiden’s capital position will be dramatically stronger.”