Reinsurance agreement structure
Enstar Group's wholly-owned subsidiary, Cavello Bay Reinsurance Limited, has entered into an adverse development cover reinsurance agreement with Markel Insurance. The arrangement covers a portfolio of Markel's run-off global reinsurance business and discontinued lines for underwriting years 2025 and prior, encompassing $4.8 billion of reserves.
Retention and risk premium
Under the terms of the agreement, Markel will retain the first $2.6 billion of reserves and retrocede the remaining $2.3 billion to Enstar. Enstar will provide $1.2 billion of adverse development cover above the subject reserves, while Markel pays a risk premium of $120 million and retains administrative and claims handling responsibilities.