|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
BERMUDA
|
N/A
|
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
Title of Each Class
|
Trading Symbol(s)
|
Name of Each Exchange on Which Registered
|
|
Ordinary shares, par value $1.00 per share
|
ESGR
|
The NASDAQ Stock Market
|
LLC
|
Depositary Shares, Each Representing a 1/1,000th Interest in a 7.00%
|
ESGRP
|
The NASDAQ Stock Market
|
LLC
|
Fixed-to-Floating Rate Perpetual Non-Cumulative Preferred Share, Series D, Par Value $1.00 Per Share
|
|
|
|
Depositary Shares, Each Representing a 1/1,000th Interest in a 7.00%
|
ESGRO
|
The NASDAQ Stock Market
|
LLC
|
Perpetual Non-Cumulative Preferred Share, Series E, Par Value $1.00 Per Share
|
|
|
|
Large accelerated filer
|
þ
|
|
Accelerated filer
|
¨
|
|
Non-accelerated filer
|
¨
|
|
Smaller reporting company
|
☐
|
|
Emerging growth company
|
☐
|
|
|
|
Page
|
PART I
|
|
|
|
|
|
Item 1.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
PART II
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 2.
|
||
Item 6.
|
CONSOLIDATED FINANCIAL STATEMENTS
|
Page
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
|
(expressed in thousands of U.S. dollars, except share data)
|
||||||
ASSETS
|
|
|
|
||||
Short-term investments, trading, at fair value
|
$
|
18,249
|
|
|
$
|
51,490
|
|
Short-term investments, available-for-sale, at fair value (amortized cost: 2020 — $138,596; 2019 — $128,311; net of allowance: 2020 — $nil)
|
138,900
|
|
|
128,335
|
|
||
Fixed maturities, trading, at fair value
|
5,644,819
|
|
|
6,346,329
|
|
||
Fixed maturities, available-for-sale, at fair value (amortized cost: 2020 — $2,203,986; 2019 — $1,914,143; net of allowance: 2020 — $16,271)
|
2,140,173
|
|
|
1,913,389
|
|
||
Funds held - directly managed
|
1,134,921
|
|
|
1,187,552
|
|
||
Equities, at fair value
|
641,850
|
|
|
729,721
|
|
||
Other investments, at fair value
|
2,326,984
|
|
|
2,524,420
|
|
||
Equity method investments
|
337,474
|
|
|
326,277
|
|
||
12,383,370
|
|
|
13,207,513
|
|
|||
Cash and cash equivalents
|
815,878
|
|
|
703,085
|
|
||
Restricted cash and cash equivalents
|
345,097
|
|
|
352,692
|
|
||
Premiums receivable
|
631,447
|
|
|
576,980
|
|
||
171,729
|
|
|
170,984
|
|
|||
Reinsurance balances recoverable on paid and unpaid losses (net of allowance: 2020 — $143,327) (Note 6)
|
1,666,381
|
|
|
1,684,372
|
|
||
653,396
|
|
|
695,518
|
|
|||
Insurance balances recoverable (net of allowance: 2020 — $6,985) (Note 9)
|
435,613
|
|
|
448,855
|
|
||
Funds held by reinsured companies
|
827,382
|
|
|
408,735
|
|
||
Deferred acquisition costs
|
162,135
|
|
|
153,505
|
|
||
Goodwill and intangible assets
|
215,960
|
|
|
216,468
|
|
||
Other assets
|
823,121
|
|
|
744,608
|
|
||
TOTAL ASSETS
|
$
|
19,131,509
|
|
|
$
|
19,363,315
|
|
|
|
|
|
||||
LIABILITIES
|
|
|
|
||||
$
|
8,084,444
|
|
|
$
|
7,808,116
|
|
|
2,345,543
|
|
|
2,621,122
|
|
|||
822,716
|
|
|
847,685
|
|
|||
Unearned premiums
|
760,307
|
|
|
746,775
|
|
||
Insurance and reinsurance balances payable
|
451,530
|
|
|
373,180
|
|
||
11,434
|
|
|
16,074
|
|
|||
1,541,554
|
|
|
1,191,207
|
|
|||
Other liabilities
|
431,204
|
|
|
464,014
|
|
||
TOTAL LIABILITIES
|
14,448,732
|
|
|
14,068,173
|
|
||
|
|
|
|
||||
|
|
|
|||||
|
|
|
|
||||
392,773
|
|
|
438,791
|
|
|||
|
|
|
|
||||
|
|
|
|||||
Ordinary shares (par value $1 each, issued and outstanding 2020: 22,119,750; 2019: 21,511,505):
|
|
|
|
||||
Voting Ordinary shares (issued and outstanding 2020: 18,610,068; 2019: 18,001,823)
|
18,610
|
|
|
18,002
|
|
||
Non-voting convertible ordinary Series C Shares (issued and outstanding 2020 and 2019: 2,599,672)
|
2,600
|
|
|
2,600
|
|
||
Non-voting convertible ordinary Series E Shares (issued and outstanding 2020 and 2019: 910,010)
|
910
|
|
|
910
|
|
||
Preferred Shares:
|
|
|
|
||||
Series C Preferred Shares (issued and held in treasury 2020 and 2019: 388,571)
|
389
|
|
|
389
|
|
||
Series D Preferred Shares (issued and outstanding 2020 and 2019: 16,000)
|
400,000
|
|
|
400,000
|
|
||
Series E Preferred Shares (issued and outstanding 2020 and 2019: 4,400)
|
110,000
|
|
|
110,000
|
|
||
Treasury shares, at cost (Series C Preferred shares 2020 and 2019: 388,571)
|
(421,559
|
)
|
|
(421,559
|
)
|
||
Joint Share Ownership Plan (voting ordinary shares, held in trust 2020: 565,630)
|
(566
|
)
|
|
—
|
|
||
Additional paid-in capital
|
1,825,798
|
|
|
1,836,778
|
|
||
Accumulated other comprehensive income (loss)
|
(34,656
|
)
|
|
7,171
|
|
||
Retained earnings
|
2,375,073
|
|
|
2,887,892
|
|
||
Total Enstar Shareholders’ Equity
|
4,276,599
|
|
|
4,842,183
|
|
||
13,405
|
|
|
14,168
|
|
|||
TOTAL SHAREHOLDERS’ EQUITY
|
4,290,004
|
|
|
4,856,351
|
|
||
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY
|
$
|
19,131,509
|
|
|
$
|
19,363,315
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
|
(expressed in thousands of U.S. dollars, except share and per share data)
|
||||||
INCOME
|
|
|
|
||||
Net premiums earned
|
$
|
259,897
|
|
|
$
|
335,287
|
|
Fees and commission income
|
7,528
|
|
|
6,681
|
|
||
Net investment income
|
77,840
|
|
|
78,696
|
|
||
Net realized and unrealized gains (losses)
|
(634,476
|
)
|
|
460,791
|
|
||
Other income
|
20,444
|
|
|
5,812
|
|
||
|
(268,767
|
)
|
|
887,267
|
|
||
EXPENSES
|
|
|
|
||||
Net incurred losses and loss adjustment expenses
|
107,894
|
|
|
312,404
|
|
||
Life and annuity policy benefits
|
—
|
|
|
96
|
|
||
Acquisition costs
|
66,586
|
|
|
93,788
|
|
||
General and administrative expenses
|
113,511
|
|
|
112,074
|
|
||
Interest expense
|
13,415
|
|
|
11,036
|
|
||
Net foreign exchange gains
|
(11,930
|
)
|
|
(3,850
|
)
|
||
|
289,476
|
|
|
525,548
|
|
||
EARNINGS (LOSS) BEFORE INCOME TAXES
|
(558,243
|
)
|
|
361,719
|
|
||
Income tax benefit (expense)
|
5,175
|
|
|
(4,749
|
)
|
||
Earnings from equity method investments
|
12,450
|
|
|
8,772
|
|
||
NET EARNINGS (LOSS)
|
(540,618
|
)
|
|
365,742
|
|
||
Net loss attributable to noncontrolling interest
|
32,722
|
|
|
2,148
|
|
||
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR
|
(507,896
|
)
|
|
367,890
|
|
||
Dividends on preferred shares
|
(8,925
|
)
|
|
(9,139
|
)
|
||
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS
|
$
|
(516,821
|
)
|
|
$
|
358,751
|
|
|
|
|
|
||||
Earnings (Loss) per ordinary share attributable to Enstar:
|
|||||||
Basic
|
$
|
(23.98
|
)
|
|
$
|
16.71
|
|
Diluted
|
$
|
(23.98
|
)
|
|
$
|
16.57
|
|
Weighted average ordinary shares outstanding:
|
|
|
|
||||
Basic
|
21,549,844
|
|
|
21,463,499
|
|
||
Diluted
|
21,779,906
|
|
|
21,645,862
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
|
(expressed in thousands of U.S. dollars)
|
||||||
NET EARNINGS (LOSS)
|
$
|
(540,618
|
)
|
|
$
|
365,742
|
|
|
|
|
|
||||
Other comprehensive income (loss), net of income taxes:
|
|
|
|
||||
Unrealized holding gains (losses) on fixed income available-for-sale investments arising during the period
|
(58,735
|
)
|
|
3,663
|
|
||
Reclassification adjustment for change in allowance for credit losses recognized in net earnings
|
13,212
|
|
|
—
|
|
||
Reclassification adjustment for net realized gains included in net earnings
|
212
|
|
|
61
|
|
||
Unrealized gains (losses) arising during the period, net of reclassification adjustments
|
(45,311
|
)
|
|
3,724
|
|
||
Total cumulative currency translation adjustment
|
(686
|
)
|
|
(801
|
)
|
||
Total other comprehensive income (loss)
|
(45,997
|
)
|
|
2,923
|
|
||
|
|
|
|
||||
Comprehensive income (loss)
|
(586,615
|
)
|
|
368,665
|
|
||
Comprehensive loss attributable to noncontrolling interest
|
36,892
|
|
|
2,064
|
|
||
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO ENSTAR
|
$
|
(549,723
|
)
|
|
$
|
370,729
|
|
|
Three Months Ended
March 31, |
||||||
|
2020
|
|
2019
|
||||
|
(expressed in thousands
of U.S. dollars)
|
||||||
Share Capital — Voting Ordinary Shares
|
|
|
|
||||
Balance, beginning of period
|
$
|
18,002
|
|
|
$
|
17,950
|
|
Issue of shares
|
701
|
|
|
8
|
|
||
Shares repurchased
|
(93
|
)
|
|
—
|
|
||
Balance, end of period
|
$
|
18,610
|
|
|
$
|
17,958
|
|
Share Capital — Non-Voting Convertible Ordinary Series C Shares
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
2,600
|
|
|
$
|
2,600
|
|
Share Capital — Non-Voting Convertible Ordinary Series E Shares
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
910
|
|
|
$
|
910
|
|
Share Capital — Series C Convertible Participating Non-Voting Preferred Shares
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
389
|
|
|
$
|
389
|
|
Share Capital — Series D Preferred Shares
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
400,000
|
|
|
$
|
400,000
|
|
Share Capital — Series E Preferred Shares
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
110,000
|
|
|
$
|
110,000
|
|
Treasury Shares (Series C Preferred Shares)
|
|
|
|
||||
Balance, beginning and end of period
|
$
|
(421,559
|
)
|
|
$
|
(421,559
|
)
|
Joint Share Ownership Plan — Voting Ordinary Shares, Held in Trust
|
|
|
|
||||
Balance, beginning of period
|
—
|
|
|
—
|
|
||
Issue of shares
|
(566
|
)
|
|
—
|
|
||
Balance, end of period
|
$
|
(566
|
)
|
|
—
|
|
|
Additional Paid-in Capital
|
|
|
|
||||
Balance, beginning of period
|
$
|
1,836,778
|
|
|
$
|
1,804,664
|
|
Issue of voting ordinary shares
|
(1,251
|
)
|
|
466
|
|
||
Shares repurchased
|
(12,433
|
)
|
|
—
|
|
||
Amortization of share-based compensation
|
2,704
|
|
|
3,977
|
|
||
Balance, end of period
|
$
|
1,825,798
|
|
|
$
|
1,809,107
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
|
|
||||
Balance, beginning of period
|
$
|
7,171
|
|
|
$
|
10,440
|
|
Currency translation adjustment
|
|
|
|
||||
Balance, beginning of period
|
8,548
|
|
|
10,986
|
|
||
Change in currency translation adjustment
|
(686
|
)
|
|
(803
|
)
|
||
Balance, end of period
|
7,862
|
|
|
10,183
|
|
||
Defined benefit pension liability
|
|
|
|
||||
Balance, beginning and end of period
|
(945
|
)
|
|
(987
|
)
|
||
Unrealized gains (losses) on available-for-sale investments
|
|
|
|
||||
Balance, beginning of period
|
(432
|
)
|
|
441
|
|
||
Change in unrealized gains (losses) on available-for-sale investments
|
(41,141
|
)
|
|
3,642
|
|
||
Balance, end of period
|
(41,573
|
)
|
|
4,083
|
|
||
Balance, end of period
|
$
|
(34,656
|
)
|
|
$
|
13,279
|
|
Retained Earnings
|
|
|
|
||||
Balance, beginning of period
|
$
|
2,887,892
|
|
|
$
|
1,976,539
|
|
Net earnings (loss)
|
(540,618
|
)
|
|
365,742
|
|
||
Net loss attributable to noncontrolling interest
|
32,722
|
|
|
2,148
|
|
||
Dividends on preferred shares
|
(8,925
|
)
|
|
(9,139
|
)
|
||
Change in redemption value of redeemable noncontrolling interests
|
10,150
|
|
|
(262
|
)
|
||
Cumulative effect of change in accounting principle
|
(6,148
|
)
|
|
—
|
|
||
Balance, end of period
|
$
|
2,375,073
|
|
|
$
|
2,335,028
|
|
Noncontrolling Interest (excludes Redeemable Noncontrolling Interest)
|
|
|
|
||||
Balance, beginning of period
|
$
|
14,168
|
|
|
$
|
12,056
|
|
Net earnings (loss) attributable to noncontrolling interest
|
(763
|
)
|
|
396
|
|
||
Balance, end of period
|
$
|
13,405
|
|
|
$
|
12,452
|
|
Total Shareholders' Equity
|
$
|
4,290,004
|
|
|
$
|
4,280,164
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(expressed in thousands of U.S. dollars)
|
||||||
OPERATING ACTIVITIES:
|
|
|
|
||||
Net earnings (loss)
|
$
|
(540,618
|
)
|
|
$
|
365,742
|
|
Adjustments to reconcile net earnings (loss) to cash flows provided by operating activities:
|
|
|
|
||||
Realized gains on sale of investments
|
(1,918
|
)
|
|
(270
|
)
|
||
Unrealized losses (gains) on investments
|
636,394
|
|
|
(460,521
|
)
|
||
Depreciation and other amortization
|
11,393
|
|
|
7,900
|
|
||
Earnings from equity method investments
|
(12,450
|
)
|
|
(8,772
|
)
|
||
Sales and maturities of trading securities
|
800,631
|
|
|
1,486,423
|
|
||
Purchases of trading securities
|
(284,860
|
)
|
|
(1,379,411
|
)
|
||
Other non-cash items
|
2,760
|
|
|
4,687
|
|
||
Changes in:
|
|
|
|
||||
Reinsurance balances recoverable on paid and unpaid losses
|
57,860
|
|
|
(256,706
|
)
|
||
Funds held by reinsured companies
|
(418,647
|
)
|
|
(598,471
|
)
|
||
Losses and loss adjustment expenses
|
16,817
|
|
|
685,834
|
|
||
Defendant asbestos and environmental liabilities
|
(24,969
|
)
|
|
(5,807
|
)
|
||
Insurance and reinsurance balances payable
|
78,693
|
|
|
67,653
|
|
||
Unearned premiums
|
13,532
|
|
|
108,424
|
|
||
Premiums receivable
|
(54,467
|
)
|
|
67,489
|
|
||
Other operating assets and liabilities
|
(122,039
|
)
|
|
22,944
|
|
||
Net cash flows provided by operating activities
|
158,112
|
|
|
107,138
|
|
||
INVESTING ACTIVITIES:
|
|
|
|
||||
Sales and maturities of available-for-sale securities
|
465,065
|
|
|
5,839
|
|
||
Purchase of available-for-sale securities
|
(778,151
|
)
|
|
(147
|
)
|
||
Purchase of other investments
|
(160,814
|
)
|
|
(225,961
|
)
|
||
Proceeds from other investments
|
85,720
|
|
|
58,980
|
|
||
Purchase of equity method investments
|
—
|
|
|
(9,762
|
)
|
||
Other investing activities
|
—
|
|
|
(1,956
|
)
|
||
Net cash flows used in investing activities
|
(388,180
|
)
|
|
(173,007
|
)
|
||
FINANCING ACTIVITIES:
|
|
|
|
||||
Dividends on preferred shares
|
(8,925
|
)
|
|
(9,139
|
)
|
||
Repurchase of shares
|
(12,526
|
)
|
|
—
|
|
||
Receipt of loans
|
364,000
|
|
|
344,000
|
|
||
Repayment of loans
|
(14,000
|
)
|
|
(102,000
|
)
|
||
Net cash flows provided by financing activities
|
328,549
|
|
|
232,861
|
|
||
EFFECT OF EXCHANGE RATE CHANGES ON FOREIGN CURRENCY CASH AND CASH EQUIVALENTS
|
6,717
|
|
|
(3,925
|
)
|
||
NET INCREASE IN CASH AND CASH EQUIVALENTS
|
105,198
|
|
|
163,067
|
|
||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
1,055,777
|
|
|
982,584
|
|
||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$
|
1,160,975
|
|
|
$
|
1,145,651
|
|
|
|
|
|
||||
Supplemental Cash Flow Information:
|
|
|
|
||||
Income taxes paid, net of refunds
|
$
|
6,596
|
|
|
$
|
9
|
|
Interest paid
|
$
|
9,747
|
|
|
$
|
14,215
|
|
|
|
|
|
||||
Reconciliation to Consolidated Balance Sheets:
|
|
|
|
||||
Cash and cash equivalents
|
815,878
|
|
|
718,050
|
|
||
Restricted cash and cash equivalents
|
345,097
|
|
|
427,601
|
|
||
Cash, cash equivalents and restricted cash
|
$
|
1,160,975
|
|
|
$
|
1,145,651
|
|
•
|
liability for losses and loss adjustment expenses ("LAE");
|
•
|
reinsurance balances recoverable on paid and unpaid losses;
|
•
|
defendant asbestos and environmental liabilities and related insurance balances recoverable;
|
•
|
valuation allowances on reinsurance balances recoverable and deferred tax assets;
|
•
|
impairment charges, including credit allowances on investment securities classified as available-for-sale ("AFS"), and impairments on goodwill, intangible assets and deferred charge assets;
|
•
|
gross and net premiums written and net premiums earned;
|
•
|
fair value measurements of investments;
|
•
|
fair value estimates associated with accounting for acquisitions;
|
•
|
fair value estimates associated with loss portfolio transfer reinsurance agreements for which we have elected the fair value option; and
|
•
|
redeemable noncontrolling interests.
|
•
|
A cumulative effect adjustment of $3.0 million relating to our financial instruments carried at amortized cost, which primarily relates to our insurance balances recoverable on paid and unpaid losses. We already carried significant specific allowances for credit losses of $147.6 million on our reinsurance balances recoverable on paid and unpaid losses, relating primarily to our Non-life Run-off segment and therefore the adoption of this standard did not have a material impact on our balance sheet; and
|
•
|
$3.1 million related to our AFS debt securities whose fair values were less than their amortized cost basis.
|
|
March 31, 2020
|
||||||||||||||||||||||
|
Short-term investments, trading
|
|
Short-term investments, AFS
|
|
Fixed maturities, trading
|
|
Fixed maturities, AFS
|
|
Fixed maturities, funds held - directly managed
|
|
Total
|
||||||||||||
U.S. government and agency
|
$
|
766
|
|
|
$
|
34,582
|
|
|
$
|
186,693
|
|
|
$
|
203,637
|
|
|
$
|
94,255
|
|
|
$
|
519,933
|
|
U.K. government
|
3,675
|
|
|
3,337
|
|
|
63,420
|
|
|
29,573
|
|
|
—
|
|
|
100,005
|
|
||||||
Other government
|
11,022
|
|
|
334
|
|
|
490,111
|
|
|
83,007
|
|
|
19,540
|
|
|
604,014
|
|
||||||
Corporate
|
2,368
|
|
|
99,277
|
|
|
3,649,143
|
|
|
1,233,289
|
|
|
554,614
|
|
|
5,538,691
|
|
||||||
Municipal
|
418
|
|
|
1,370
|
|
|
98,341
|
|
|
15,676
|
|
|
49,025
|
|
|
164,830
|
|
||||||
Residential mortgage-backed
|
—
|
|
|
—
|
|
|
229,723
|
|
|
155,027
|
|
|
83,168
|
|
|
467,918
|
|
||||||
Commercial mortgage-backed
|
—
|
|
|
—
|
|
|
523,207
|
|
|
130,878
|
|
|
219,419
|
|
|
873,504
|
|
||||||
Asset-backed
|
—
|
|
|
—
|
|
|
404,181
|
|
|
289,086
|
|
|
61,608
|
|
|
754,875
|
|
||||||
Total fixed maturity and short-term investments
|
$
|
18,249
|
|
|
$
|
138,900
|
|
|
$
|
5,644,819
|
|
|
$
|
2,140,173
|
|
|
$
|
1,081,629
|
|
|
$
|
9,023,770
|
|
|
December 31, 2019
|
||||||||||||||||||||||
|
Short-term investments, trading
|
|
Short-term investments, AFS
|
|
Fixed maturities, trading
|
|
Fixed maturities, AFS
|
|
Fixed maturities, funds held - directly managed
|
|
Total
|
||||||||||||
U.S. government and agency
|
$
|
—
|
|
|
$
|
111,583
|
|
|
$
|
219,194
|
|
|
$
|
298,729
|
|
|
$
|
106,537
|
|
|
$
|
736,043
|
|
U.K. government
|
24,411
|
|
|
1,069
|
|
|
122,012
|
|
|
14,280
|
|
|
—
|
|
|
161,772
|
|
||||||
Other government
|
21,958
|
|
|
387
|
|
|
575,018
|
|
|
84,760
|
|
|
20,734
|
|
|
702,857
|
|
||||||
Corporate
|
5,121
|
|
|
13,915
|
|
|
4,007,386
|
|
|
1,067,256
|
|
|
603,389
|
|
|
5,697,067
|
|
||||||
Municipal
|
—
|
|
|
1,381
|
|
|
102,554
|
|
|
14,491
|
|
|
49,456
|
|
|
167,882
|
|
||||||
Residential mortgage-backed
|
—
|
|
|
—
|
|
|
258,412
|
|
|
127,219
|
|
|
86,205
|
|
|
471,836
|
|
||||||
Commercial mortgage-backed
|
—
|
|
|
—
|
|
|
571,129
|
|
|
98,557
|
|
|
230,343
|
|
|
900,029
|
|
||||||
Asset-backed
|
—
|
|
|
—
|
|
|
490,624
|
|
|
208,097
|
|
|
76,681
|
|
|
775,402
|
|
||||||
Total fixed maturity and short-term investments
|
$
|
51,490
|
|
|
$
|
128,335
|
|
|
$
|
6,346,329
|
|
|
$
|
1,913,389
|
|
|
$
|
1,173,345
|
|
|
$
|
9,612,888
|
|
As of March 31, 2020
|
|
Amortized
Cost
|
|
Fair Value
|
|
% of Total
Fair
Value
|
|||||
One year or less
|
|
$
|
502,300
|
|
|
$
|
497,009
|
|
|
5.5
|
%
|
More than one year through two years
|
|
754,996
|
|
|
747,837
|
|
|
8.3
|
%
|
||
More than two years through five years
|
|
2,209,294
|
|
|
2,156,740
|
|
|
23.9
|
%
|
||
More than five years through ten years
|
|
2,080,140
|
|
|
2,049,319
|
|
|
22.7
|
%
|
||
More than ten years
|
|
1,439,507
|
|
|
1,476,568
|
|
|
16.3
|
%
|
||
Residential mortgage-backed
|
|
466,964
|
|
|
467,918
|
|
|
5.2
|
%
|
||
Commercial mortgage-backed
|
|
894,859
|
|
|
873,504
|
|
|
9.7
|
%
|
||
Asset-backed
|
|
829,598
|
|
|
754,875
|
|
|
8.4
|
%
|
||
|
|
$
|
9,177,658
|
|
|
$
|
9,023,770
|
|
|
100.0
|
%
|
|
|
Amortized
Cost
|
|
Fair Value
|
|
% of Total
|
|
AAA
Rated
|
|
AA Rated
|
|
A Rated
|
|
BBB
Rated
|
|
Non-
Investment
Grade
|
|
Not Rated
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
U.S. government and agency
|
|
$
|
488,708
|
|
|
$
|
519,933
|
|
|
5.8
|
%
|
|
$
|
519,933
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
U.K. government
|
|
100,716
|
|
|
100,005
|
|
|
1.1
|
%
|
|
538
|
|
|
99,467
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Other government
|
|
618,746
|
|
|
604,014
|
|
|
6.7
|
%
|
|
268,626
|
|
|
136,721
|
|
|
63,097
|
|
|
111,636
|
|
|
20,478
|
|
|
3,456
|
|
||||||||
Corporate
|
|
5,622,480
|
|
|
5,538,691
|
|
|
61.3
|
%
|
|
140,194
|
|
|
602,836
|
|
|
2,908,118
|
|
|
1,594,296
|
|
|
277,738
|
|
|
15,509
|
|
||||||||
Municipal
|
|
155,587
|
|
|
164,830
|
|
|
1.8
|
%
|
|
16,425
|
|
|
77,511
|
|
|
49,068
|
|
|
21,826
|
|
|
—
|
|
|
—
|
|
||||||||
Residential mortgage-backed
|
|
466,964
|
|
|
467,918
|
|
|
5.2
|
%
|
|
395,148
|
|
|
26,892
|
|
|
3,085
|
|
|
1,602
|
|
|
35,489
|
|
|
5,702
|
|
||||||||
Commercial mortgage-backed
|
|
894,859
|
|
|
873,504
|
|
|
9.7
|
%
|
|
621,883
|
|
|
93,167
|
|
|
78,379
|
|
|
57,187
|
|
|
5,867
|
|
|
17,021
|
|
||||||||
Asset-backed
|
|
829,598
|
|
|
754,875
|
|
|
8.4
|
%
|
|
421,823
|
|
|
64,782
|
|
|
122,025
|
|
|
71,799
|
|
|
10,352
|
|
|
64,094
|
|
||||||||
Total
|
|
$
|
9,177,658
|
|
|
$
|
9,023,770
|
|
|
100.0
|
%
|
|
$
|
2,384,570
|
|
|
$
|
1,101,376
|
|
|
$
|
3,223,772
|
|
|
$
|
1,858,346
|
|
|
$
|
349,924
|
|
|
$
|
105,782
|
|
% of total fair value
|
|
|
|
|
|
|
|
26.4
|
%
|
|
12.2
|
%
|
|
35.7
|
%
|
|
20.6
|
%
|
|
3.9
|
%
|
|
1.2
|
%
|
|
|
|
|
|
|
Gross Unrealized Losses
|
|
|
||||||||||||
As of March 31, 2020
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Non-Credit Related Losses
|
|
Allowance for Credit Losses(1)
|
|
Fair Value
|
||||||||||
U.S. government and agency
|
|
$
|
230,450
|
|
|
$
|
7,783
|
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
238,219
|
|
U.K. government
|
|
33,953
|
|
|
—
|
|
|
(1,043
|
)
|
|
—
|
|
|
32,910
|
|
|||||
Other government
|
|
84,302
|
|
|
1,416
|
|
|
(2,377
|
)
|
|
—
|
|
|
83,341
|
|
|||||
Corporate
|
|
1,374,000
|
|
|
5,680
|
|
|
(30,844
|
)
|
|
(16,270
|
)
|
|
1,332,566
|
|
|||||
Municipal
|
|
16,799
|
|
|
250
|
|
|
(3
|
)
|
|
—
|
|
|
17,046
|
|
|||||
Residential mortgage-backed
|
|
153,268
|
|
|
2,943
|
|
|
(1,184
|
)
|
|
—
|
|
|
155,027
|
|
|||||
Commercial mortgage-backed
|
|
137,641
|
|
|
744
|
|
|
(7,506
|
)
|
|
(1
|
)
|
|
130,878
|
|
|||||
Asset-backed
|
|
312,169
|
|
|
195
|
|
|
(23,278
|
)
|
|
—
|
|
|
289,086
|
|
|||||
|
|
$
|
2,342,582
|
|
|
$
|
19,011
|
|
|
$
|
(66,249
|
)
|
|
$
|
(16,271
|
)
|
|
$
|
2,279,073
|
|
As of December 31, 2019
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
(Non-OTTI)
|
|
Fair Value
|
||||||||
U.S. government and agency
|
|
$
|
410,842
|
|
|
$
|
77
|
|
|
$
|
(607
|
)
|
|
$
|
410,312
|
|
U.K. government
|
|
15,067
|
|
|
282
|
|
|
—
|
|
|
15,349
|
|
||||
Other government
|
|
84,116
|
|
|
1,119
|
|
|
(88
|
)
|
|
85,147
|
|
||||
Corporate
|
|
1,081,713
|
|
|
4,026
|
|
|
(4,568
|
)
|
|
1,081,171
|
|
||||
Municipal
|
|
15,963
|
|
|
20
|
|
|
(111
|
)
|
|
15,872
|
|
||||
Residential mortgage-backed
|
|
127,704
|
|
|
240
|
|
|
(725
|
)
|
|
127,219
|
|
||||
Commercial mortgage-backed
|
|
98,928
|
|
|
38
|
|
|
(409
|
)
|
|
98,557
|
|
||||
Asset-backed
|
|
208,121
|
|
|
169
|
|
|
(193
|
)
|
|
208,097
|
|
||||
|
|
$
|
2,042,454
|
|
|
$
|
5,971
|
|
|
$
|
(6,701
|
)
|
|
$
|
2,041,724
|
|
|
|
12 Months or Greater
|
|
Less Than 12 Months
|
|
Total
|
||||||||||||||||||
As of March 31, 2020
|
|
Fair
Value
|
|
Gross Unrealized
Losses
|
|
Fair
Value
|
|
Gross Unrealized
Losses
|
|
Fair
Value
|
|
Gross Unrealized
Losses
|
||||||||||||
U.S. government and agency
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,399
|
|
|
$
|
(14
|
)
|
|
$
|
1,399
|
|
|
$
|
(14
|
)
|
U.K. government
|
|
—
|
|
|
—
|
|
|
32,909
|
|
|
(1,043
|
)
|
|
32,909
|
|
|
(1,043
|
)
|
||||||
Other government
|
|
992
|
|
|
(110
|
)
|
|
40,315
|
|
|
(2,267
|
)
|
|
41,307
|
|
|
(2,377
|
)
|
||||||
Corporate
|
|
2,390
|
|
|
(432
|
)
|
|
532,456
|
|
|
(10,287
|
)
|
|
534,846
|
|
|
(10,719
|
)
|
||||||
Municipal
|
|
—
|
|
|
—
|
|
|
473
|
|
|
(3
|
)
|
|
473
|
|
|
(3
|
)
|
||||||
Residential mortgage-backed
|
|
—
|
|
|
—
|
|
|
33,738
|
|
|
(1,184
|
)
|
|
33,738
|
|
|
(1,184
|
)
|
||||||
Commercial mortgage-backed
|
|
—
|
|
|
—
|
|
|
93,706
|
|
|
(7,460
|
)
|
|
93,706
|
|
|
(7,460
|
)
|
||||||
Asset-backed
|
|
—
|
|
|
—
|
|
|
264,205
|
|
|
(23,278
|
)
|
|
264,205
|
|
|
(23,278
|
)
|
||||||
Total fixed maturity and short-term investments
|
|
$
|
3,382
|
|
|
$
|
(542
|
)
|
|
$
|
999,201
|
|
|
$
|
(45,536
|
)
|
|
$
|
1,002,583
|
|
|
$
|
(46,078
|
)
|
|
|
12 Months or Greater
|
|
Less Than 12 Months
|
|
Total
|
||||||||||||||||||
As of December 31, 2019
|
|
Fair
Value
|
|
Gross Unrealized
Losses
|
|
Fair
Value
|
|
Gross Unrealized
Losses
|
|
Fair
Value
|
|
Gross Unrealized
Losses
|
||||||||||||
U.S. government and agency
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
222,643
|
|
|
$
|
(607
|
)
|
|
$
|
222,643
|
|
|
$
|
(607
|
)
|
Other government
|
|
1,080
|
|
|
(23
|
)
|
|
37,796
|
|
|
(65
|
)
|
|
38,876
|
|
|
(88
|
)
|
||||||
Corporate
|
|
2,754
|
|
|
(306
|
)
|
|
461,772
|
|
|
(4,262
|
)
|
|
464,526
|
|
|
(4,568
|
)
|
||||||
Municipal
|
|
128
|
|
|
—
|
|
|
12,046
|
|
|
(111
|
)
|
|
12,174
|
|
|
(111
|
)
|
||||||
Residential mortgage-backed
|
|
—
|
|
|
—
|
|
|
65,992
|
|
|
(725
|
)
|
|
65,992
|
|
|
(725
|
)
|
||||||
Commercial mortgage-backed
|
|
—
|
|
|
—
|
|
|
79,606
|
|
|
(409
|
)
|
|
79,606
|
|
|
(409
|
)
|
||||||
Asset-backed
|
|
—
|
|
|
—
|
|
|
129,014
|
|
|
(193
|
)
|
|
129,014
|
|
|
(193
|
)
|
||||||
Total fixed maturity and short-term investments
|
|
$
|
3,962
|
|
|
$
|
(329
|
)
|
|
$
|
1,008,869
|
|
|
$
|
(6,372
|
)
|
|
$
|
1,012,831
|
|
|
$
|
(6,701
|
)
|
•
|
Corporate and Government: Expected cashflows are derived that are specific to each security. The PD is based on a quantitative model that converts agency ratings to term structures that vary by country, industry and the state of the credit cycle. This is used along with macroeconomic forecasts to produce scenario conditioned PDs. The LGD is based on default studies provided by a third party which we use along with macroeconomic forecasts to produce scenario conditioned LGDs.
|
•
|
Municipals: Expected cash flows are derived that are specific to each security. The PD model produces scenario conditioned PD output over the lifetime of the municipal security. These PDs are based on key macroeconomic and instrument specific risk factors. The LGD is derived based on a model which uses assumptions specific to the municipal securities.
|
•
|
Asset backed, Commercial and Residential mortgaged-backed: Expected cash flows are derived that are specific to each security. The PD and LGD for each security is based on a quantitative model that generates scenario conditioned PD and LGD term structures based on the underlying collateral type, waterfall and other trustee information. This model also considers prepayments. For these security types, there is no explicit reversion and the forecasts are deemed reasonable and supportable over the life of the portfolio.
|
|
Other
government |
|
Corporate
|
|
Commercial
mortgage backed |
|
Total
|
||||||||
Allowance for credit losses, beginning of period
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Cumulative effect of change in accounting principle
|
(22
|
)
|
|
(2,987
|
)
|
|
(50
|
)
|
|
(3,059
|
)
|
||||
Allowances for credit losses on securities for which credit losses were not previously recorded
|
—
|
|
|
(13,681
|
)
|
|
—
|
|
|
(13,681
|
)
|
||||
Reductions for securities sold during the period
|
—
|
|
|
369
|
|
|
—
|
|
|
369
|
|
||||
Reductions in the allowance for credit losses on securities we either intend to sell or more likely than not, we will be required to sell before the recovery of their amortized cost basis
|
22
|
|
|
29
|
|
|
49
|
|
|
100
|
|
||||
Allowance for credit loss, end of period
|
$
|
—
|
|
|
$
|
(16,270
|
)
|
|
$
|
(1
|
)
|
|
$
|
(16,271
|
)
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Publicly traded equity investments in common and preferred stocks
|
$
|
240,932
|
|
|
$
|
327,875
|
|
Exchange-traded funds
|
130,906
|
|
|
133,047
|
|
||
Privately held equity investments in common and preferred stocks
|
270,012
|
|
|
268,799
|
|
||
|
$
|
641,850
|
|
|
$
|
729,721
|
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Hedge funds
|
|
$
|
1,055,448
|
|
|
$
|
1,121,904
|
|
Fixed income funds
|
|
463,717
|
|
|
481,039
|
|
||
Equity funds
|
|
320,046
|
|
|
410,149
|
|
||
Private equity funds
|
|
309,219
|
|
|
329,885
|
|
||
CLO equities
|
|
83,740
|
|
|
87,555
|
|
||
CLO equity funds
|
|
66,938
|
|
|
87,509
|
|
||
Private credit funds
|
|
20,473
|
|
|
—
|
|
||
Other
|
|
7,403
|
|
|
6,379
|
|
||
|
|
$
|
2,326,984
|
|
|
$
|
2,524,420
|
|
•
|
Hedge funds may invest in a wide range of instruments, including debt and equity securities, and utilize various sophisticated strategies to achieve their objectives. We invest in a mixture of fixed income, equity and multi-strategy hedge funds.
|
•
|
Fixed income funds comprise a number of positions in diversified fixed income funds that are managed by third-party managers. Underlying investments vary from high-grade corporate bonds to non-investment grade senior secured loans and bonds, but are generally invested in liquid fixed income markets. These funds have regularly published prices.
|
•
|
Equity funds invest in a diversified portfolio of U.S. and international publicly-traded equity securities.
|
•
|
Private equity funds invest primarily in the financial services industry.
|
•
|
CLO equities comprise investments in the equity tranches of term-financed securitizations of diversified pools of corporate bank loans.
|
•
|
CLO equity funds invest primarily in the equity tranches of term-financed securitizations of diversified pools of corporate bank loans.
|
•
|
Private credit funds invest in direct senior or collateralized loans.
|
•
|
Others comprise various investments including real estate debt funds that invest primarily in European commercial real estate equity, call options on equities and a fund that provides loans to educational institutions throughout the U.S. and its territories.
|
|
|
Less than 1 Year
|
|
1-2 years
|
|
2-3 years
|
|
More than 3 years
|
|
Not Eligible/ Restricted
|
|
Total
|
|
Redemption Frequency
|
||||||||||||
Hedge funds
|
|
$
|
325,882
|
|
|
$
|
576,616
|
|
|
$
|
—
|
|
|
$
|
102,600
|
|
|
$
|
50,350
|
|
|
$
|
1,055,448
|
|
|
Monthly to Bi-annually
|
Fixed income funds
|
|
460,684
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,033
|
|
|
463,717
|
|
|
Daily to Quarterly
|
||||||
Equity funds
|
|
320,046
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
320,046
|
|
|
Daily to Quarterly
|
||||||
Private equity funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309,219
|
|
|
309,219
|
|
|
N/A
|
||||||
CLO equities
|
|
83,740
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
83,740
|
|
|
N/A
|
||||||
CLO equity funds
|
|
47,938
|
|
|
—
|
|
|
19,000
|
|
|
—
|
|
|
—
|
|
|
66,938
|
|
|
Quarterly to Bi-annually
|
||||||
Private credit funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,473
|
|
|
20,473
|
|
|
N/A
|
||||||
Other
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,403
|
|
|
7,403
|
|
|
N/A
|
||||||
|
|
$
|
1,238,290
|
|
|
$
|
576,616
|
|
|
$
|
19,000
|
|
|
$
|
102,600
|
|
|
$
|
390,478
|
|
|
$
|
2,326,984
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||
|
|
Investment
|
|
Ownership %
|
|
Carrying Value
|
|
Investment
|
|
Ownership %
|
|
Carrying Value
|
||||||||||
Enhanzed Re
|
|
$
|
154,050
|
|
|
47.4
|
%
|
|
$
|
197,206
|
|
|
$
|
154,050
|
|
|
47.4
|
%
|
|
$
|
182,856
|
|
Citco
|
|
50,000
|
|
|
31.9
|
%
|
|
51,504
|
|
|
50,000
|
|
|
31.9
|
%
|
|
51,742
|
|
||||
Monument
|
|
26,600
|
|
|
26.6
|
%
|
|
57,737
|
|
|
26,600
|
|
|
26.6
|
%
|
|
60,598
|
|
||||
Clear Spring
|
|
11,210
|
|
|
20.0
|
%
|
|
10,952
|
|
|
11,210
|
|
|
20.0
|
%
|
|
10,645
|
|
||||
Other
|
|
24,963
|
|
|
~30%
|
|
|
20,075
|
|
|
24,963
|
|
|
~30%
|
|
|
20,436
|
|
||||
|
|
$
|
266,823
|
|
|
|
|
$
|
337,474
|
|
|
$
|
266,823
|
|
|
|
|
$
|
326,277
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Fixed maturity investments, trading
|
$
|
1,081,629
|
|
|
$
|
1,173,345
|
|
Cash and cash equivalents
|
51,209
|
|
|
10,296
|
|
||
Other assets
|
2,083
|
|
|
3,911
|
|
||
|
$
|
1,134,921
|
|
|
$
|
1,187,552
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||||||||||||||||||
|
Funds held - Directly Managed - Fair Value Option
|
|
Funds held - Directly Managed - Variable Return
|
|
Total
|
|
Funds held - Directly Managed - Fair Value Option
|
|
Funds held - Directly Managed - Variable Return
|
|
Total
|
||||||||||||
Fixed maturity investments, at amortized cost
|
$
|
164,425
|
|
|
$
|
895,214
|
|
|
$
|
1,059,639
|
|
|
$
|
185,859
|
|
|
$
|
940,194
|
|
|
$
|
1,126,053
|
|
Net unrealized gains (losses):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Change in fair value - fair value option accounting
|
2,754
|
|
|
|
|
|
2,754
|
|
|
5,438
|
|
|
—
|
|
|
5,438
|
|
||||||
Change in fair value - embedded derivative accounting
|
|
|
|
19,236
|
|
|
19,236
|
|
|
—
|
|
|
41,854
|
|
|
41,854
|
|
||||||
Fixed maturity investments within funds held - directly managed, at fair value
|
$
|
167,179
|
|
|
$
|
914,450
|
|
|
$
|
1,081,629
|
|
|
$
|
191,297
|
|
|
$
|
982,048
|
|
|
$
|
1,173,345
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Fixed maturity investments
|
$
|
57,195
|
|
|
$
|
58,070
|
|
Short-term investments and cash and cash equivalents
|
2,794
|
|
|
3,860
|
|
||
Funds held
|
271
|
|
|
5,798
|
|
||
Funds held - directly managed
|
8,816
|
|
|
9,750
|
|
||
Investment income from fixed maturities and cash and cash equivalents
|
69,076
|
|
|
77,478
|
|
||
Equity investments
|
5,963
|
|
|
3,380
|
|
||
Other investments
|
7,505
|
|
|
2,114
|
|
||
Investment income from equities and other investments
|
13,468
|
|
|
5,494
|
|
||
Gross investment income
|
82,544
|
|
|
82,972
|
|
||
Investment expenses
|
(4,704
|
)
|
|
(4,276
|
)
|
||
Net investment income
|
$
|
77,840
|
|
|
$
|
78,696
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Net realized gains (losses) on sale:
|
|
|
|
|
||||
Gross realized gains on fixed maturity securities, AFS
|
|
$
|
1,814
|
|
|
$
|
4
|
|
Gross realized losses on fixed maturity securities, AFS
|
|
(2,026
|
)
|
|
(65
|
)
|
||
Credit loss on fixed maturity securities, AFS
|
|
(13,212
|
)
|
|
—
|
|
||
Net realized gains (losses) on fixed maturity securities, trading
|
|
15,837
|
|
|
(611
|
)
|
||
Net realized gains (losses) on funds held - directly managed
|
|
512
|
|
|
(1,606
|
)
|
||
Net realized gains (losses) on equity investments
|
|
(1,007
|
)
|
|
2,548
|
|
||
Total net realized gains on sale
|
|
$
|
1,918
|
|
|
$
|
270
|
|
Net unrealized gains (losses):
|
|
|
|
|
||||
Fixed maturity securities, trading
|
|
$
|
(261,008
|
)
|
|
$
|
209,467
|
|
Fixed maturity securities in funds held - directly managed portfolios
|
|
(25,302
|
)
|
|
38,962
|
|
||
Equity investments
|
|
(91,952
|
)
|
|
7,383
|
|
||
Other Investments
|
|
(258,132
|
)
|
|
204,709
|
|
||
Total net unrealized gains (losses)
|
|
(636,394
|
)
|
|
460,521
|
|
||
Net realized and unrealized gains (losses)
|
|
$
|
(634,476
|
)
|
|
$
|
460,791
|
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Collateral in trust for third party agreements
|
|
$
|
3,664,247
|
|
|
$
|
4,104,093
|
|
Assets on deposit with regulatory authorities
|
|
226,477
|
|
|
445,626
|
|
||
Collateral for secured letter of credit facilities
|
|
124,505
|
|
|
133,238
|
|
||
Funds at Lloyd's (1)
|
|
717,970
|
|
|
639,316
|
|
||
|
|
$
|
4,733,199
|
|
|
$
|
5,322,273
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||||||
|
|
Gross Notional Amount
|
|
Assets
|
|
Liabilities
|
|
Gross Notional Amount
|
|
Assets
|
|
Liabilities
|
||||||||||||
Foreign currency forward - AUD
|
|
$
|
56,149
|
|
|
$
|
4,269
|
|
|
$
|
—
|
|
|
$
|
64,620
|
|
|
$
|
52
|
|
|
$
|
2,033
|
|
Foreign currency forward - EUR
|
|
103,127
|
|
|
194
|
|
|
943
|
|
|
112,284
|
|
|
246
|
|
|
1,635
|
|
||||||
Foreign currency forward - GBP
|
|
297,582
|
|
|
13,192
|
|
|
—
|
|
|
318,387
|
|
|
344
|
|
|
7,784
|
|
||||||
Total qualifying hedges
|
|
$
|
456,858
|
|
|
$
|
17,655
|
|
|
$
|
943
|
|
|
$
|
495,291
|
|
|
$
|
642
|
|
|
$
|
11,452
|
|
|
|
Amount of Gains (Losses) Deferred in AOCI
|
||||||
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Foreign currency forward - AUD
|
|
$
|
8,471
|
|
|
$
|
(327
|
)
|
Foreign currency forward - EUR
|
|
2,635
|
|
|
1,855
|
|
||
Foreign currency forward - GBP
|
|
20,812
|
|
|
—
|
|
||
Net gains on qualifying derivative hedges
|
|
$
|
31,918
|
|
|
$
|
1,528
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
|
|
|
Fair Value
|
|
|
|
Fair Value
|
||||||||||||||||
|
|
Gross Notional Amount
|
|
Assets
|
|
Liabilities
|
|
Gross Notional Amount
|
|
Assets
|
|
Liabilities
|
||||||||||||
Foreign currency forward - AUD
|
|
$
|
32,103
|
|
|
$
|
3,088
|
|
|
$
|
608
|
|
|
$
|
913
|
|
|
$
|
839
|
|
|
$
|
892
|
|
Foreign currency forward - CAD
|
|
50,754
|
|
|
3,419
|
|
|
1
|
|
|
66,266
|
|
|
10
|
|
|
1,482
|
|
||||||
Foreign currency forward - EUR
|
|
52,660
|
|
|
173
|
|
|
1,672
|
|
|
74,444
|
|
|
507
|
|
|
1,440
|
|
||||||
Foreign currency forward - GBP
|
|
24,427
|
|
|
972
|
|
|
713
|
|
|
11,940
|
|
|
13
|
|
|
292
|
|
||||||
Total non-qualifying hedges
|
|
$
|
159,944
|
|
|
$
|
7,652
|
|
|
$
|
2,994
|
|
|
$
|
153,563
|
|
|
$
|
1,369
|
|
|
$
|
4,106
|
|
|
|
Gains (Losses) on non-qualifying-hedges included in net earnings
|
||||||
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Foreign currency forward - AUD
|
|
$
|
2,533
|
|
|
$
|
(765
|
)
|
Foreign currency forward - CAD
|
|
4,996
|
|
|
1
|
|
||
Foreign currency forward - EUR
|
|
1,176
|
|
|
1,205
|
|
||
Foreign currency forward - GBP
|
|
576
|
|
|
(4,059
|
)
|
||
Net gains (losses) on non-qualifying hedges
|
|
$
|
9,281
|
|
|
$
|
(3,618
|
)
|
|
|
March 31, 2020
|
||||||||||||||
|
|
Non-life
Run-off
|
|
Atrium
|
|
StarStone
|
|
Total
|
||||||||
Recoverable from reinsurers on unpaid:
|
|
|
|
|
|
|
|
|
||||||||
Outstanding losses
|
|
$
|
957,961
|
|
|
$
|
8,140
|
|
|
$
|
321,921
|
|
|
$
|
1,288,022
|
|
IBNR
|
|
602,508
|
|
|
24,781
|
|
|
263,222
|
|
|
890,511
|
|
||||
Fair value adjustments - acquired companies
|
|
(13,353
|
)
|
|
514
|
|
|
(1,678
|
)
|
|
(14,517
|
)
|
||||
Fair value adjustments - fair value option
|
|
(93,935
|
)
|
|
—
|
|
|
—
|
|
|
(93,935
|
)
|
||||
ULAE
|
|
7,827
|
|
|
—
|
|
|
—
|
|
|
7,827
|
|
||||
Total reinsurance reserves recoverable
|
|
1,461,008
|
|
|
33,435
|
|
|
583,465
|
|
|
2,077,908
|
|
||||
Paid losses recoverable
|
|
137,210
|
|
|
1,181
|
|
|
103,478
|
|
|
241,869
|
|
||||
Total
|
|
$
|
1,598,218
|
|
|
$
|
34,616
|
|
|
$
|
686,943
|
|
|
$
|
2,319,777
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation to Consolidated Balance Sheet:
|
|
|
|
|
|
|
|
|
||||||||
Reinsurance balances recoverable on paid and unpaid losses
|
|
$
|
944,822
|
|
|
$
|
34,616
|
|
|
$
|
686,943
|
|
|
$
|
1,666,381
|
|
Reinsurance balances recoverable on paid and unpaid losses - fair value option
|
|
653,396
|
|
|
—
|
|
|
—
|
|
|
653,396
|
|
||||
Total
|
|
$
|
1,598,218
|
|
|
$
|
34,616
|
|
|
$
|
686,943
|
|
|
$
|
2,319,777
|
|
|
|
December 31, 2019
|
||||||||||||||
|
|
Non-life
Run-off
|
|
Atrium
|
|
StarStone
|
|
Total
|
||||||||
Recoverable from reinsurers on unpaid:
|
|
|
|
|
|
|
|
|
||||||||
Outstanding losses
|
|
$
|
972,293
|
|
|
$
|
9,011
|
|
|
$
|
328,009
|
|
|
$
|
1,309,313
|
|
IBNR
|
|
673,059
|
|
|
19,286
|
|
|
211,404
|
|
|
903,749
|
|
||||
Fair value adjustments - acquired companies
|
|
(13,652
|
)
|
|
519
|
|
|
(2,122
|
)
|
|
(15,255
|
)
|
||||
Fair value adjustments - fair value option
|
|
(88,086
|
)
|
|
—
|
|
|
—
|
|
|
(88,086
|
)
|
||||
Total reinsurance reserves recoverable
|
|
1,543,614
|
|
|
28,816
|
|
|
537,291
|
|
|
2,109,721
|
|
||||
Paid losses recoverable
|
|
181,375
|
|
|
1,541
|
|
|
87,253
|
|
|
270,169
|
|
||||
Total
|
|
$
|
1,724,989
|
|
|
$
|
30,357
|
|
|
$
|
624,544
|
|
|
$
|
2,379,890
|
|
|
|
|
|
|
|
|
|
|
||||||||
Reconciliation to Consolidated Balance Sheet:
|
|
|
|
|
|
|
|
|
||||||||
Reinsurance balances recoverable on paid and unpaid losses
|
|
$
|
1,029,471
|
|
|
$
|
30,357
|
|
|
$
|
624,544
|
|
|
$
|
1,684,372
|
|
Reinsurance balances recoverable on paid and unpaid losses - fair value option
|
|
695,518
|
|
|
—
|
|
|
—
|
|
|
695,518
|
|
||||
Total
|
|
$
|
1,724,989
|
|
|
$
|
30,357
|
|
|
$
|
624,544
|
|
|
$
|
2,379,890
|
|
|
March 31, 2020
|
|||||||||||||||||
|
Non-life
Run-off |
|
Atrium
|
|
StarStone
|
|
Total
|
|
% of
Total |
|||||||||
Top 10 reinsurers
|
$
|
1,075,150
|
|
|
$
|
25,328
|
|
|
$
|
430,788
|
|
|
$
|
1,531,266
|
|
|
66.0
|
%
|
Other reinsurers > $1 million
|
510,504
|
|
|
8,742
|
|
|
253,127
|
|
|
772,373
|
|
|
33.3
|
%
|
||||
Other reinsurers < $1 million
|
12,564
|
|
|
546
|
|
|
3,028
|
|
|
16,138
|
|
|
0.7
|
%
|
||||
Total
|
$
|
1,598,218
|
|
|
$
|
34,616
|
|
|
$
|
686,943
|
|
|
$
|
2,319,777
|
|
|
100.0
|
%
|
|
December 31, 2019
|
|||||||||||||||||
|
Non-life
Run-off |
|
Atrium
|
|
StarStone
|
|
Total
|
|
% of
Total |
|||||||||
Top 10 reinsurers
|
$
|
1,154,110
|
|
|
$
|
22,051
|
|
|
$
|
388,171
|
|
|
$
|
1,564,332
|
|
|
65.7
|
%
|
Other reinsurers > $1 million
|
551,636
|
|
|
7,761
|
|
|
233,871
|
|
|
793,268
|
|
|
33.4
|
%
|
||||
Other reinsurers < $1 million
|
19,243
|
|
|
545
|
|
|
2,502
|
|
|
22,290
|
|
|
0.9
|
%
|
||||
Total
|
$
|
1,724,989
|
|
|
$
|
30,357
|
|
|
$
|
624,544
|
|
|
$
|
2,379,890
|
|
|
100.0
|
%
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Information regarding top ten reinsurers:
|
|
|
|
||||
Number of top 10 reinsurers rated A- or better
|
8
|
|
|
8
|
|
||
Number of top 10 non-rated reinsurers (1)
|
2
|
|
|
2
|
|
||
|
|
|
|
||||
Reinsurers rated A- or better in top 10
|
$
|
1,260,977
|
|
|
$
|
1,292,207
|
|
Collaterized non-rated reinsurers in top 10 (1)
|
270,289
|
|
|
272,125
|
|
||
Total top 10 reinsurance recoverables
|
$
|
1,531,266
|
|
|
$
|
1,564,332
|
|
|
|
|
|
||||
Single reinsurers that represent 10% or more of total reinsurance balance recoverables as of March 31, 2020:
|
|
|
|
||||
|
|
|
|
||||
Hannover Ruck SE (2)
|
$
|
264,424
|
|
|
$
|
261,295
|
|
Lloyd's Syndicates (3)
|
$
|
412,790
|
|
|
$
|
411,030
|
|
|
March 31, 2020
|
|||||||||||||
|
Gross
|
|
Allowance for estimated uncollectible reinsurance
|
|
Net
|
|
Provisions as a
% of Gross |
|||||||
Reinsurers rated A- or above
|
$
|
1,853,658
|
|
|
$
|
42,759
|
|
|
$
|
1,810,899
|
|
|
2.3
|
%
|
Reinsurers rated below A-, secured
|
478,752
|
|
|
—
|
|
|
478,752
|
|
|
—
|
%
|
|||
Reinsurers rated below A-, unsecured
|
130,694
|
|
|
100,568
|
|
|
30,126
|
|
|
76.9
|
%
|
|||
Total
|
$
|
2,463,104
|
|
|
$
|
143,327
|
|
|
$
|
2,319,777
|
|
|
5.8
|
%
|
|
December 31, 2019
|
|||||||||||||
|
Gross
|
|
Allowance for estimated uncollectible reinsurance
|
|
Net
|
|
Provisions as a
% of Gross |
|||||||
Reinsurers rated A- or above
|
$
|
1,904,268
|
|
|
$
|
43,427
|
|
|
$
|
1,860,841
|
|
|
2.3
|
%
|
Reinsurers rated below A-, secured
|
487,608
|
|
|
—
|
|
|
487,608
|
|
|
—
|
%
|
|||
Reinsurers rated below A-, unsecured
|
135,653
|
|
|
104,212
|
|
|
31,441
|
|
|
76.8
|
%
|
|||
Total
|
$
|
2,527,529
|
|
|
$
|
147,639
|
|
|
$
|
2,379,890
|
|
|
5.8
|
%
|
|
Three Months Ended
|
||
|
March 31, 2020
|
||
Allowance for estimated uncollectible reinsurance, beginning of period
|
$
|
147,639
|
|
Cumulative effect of change in accounting principle
|
(195
|
)
|
|
Current period change in the allowance
|
(4,117
|
)
|
|
Allowance for estimated uncollectible reinsurance, end of period
|
$
|
143,327
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Beginning carrying value
|
$
|
272,462
|
|
|
$
|
86,585
|
|
Recorded during the period
|
—
|
|
|
20,632
|
|
||
Amortization
|
(14,630
|
)
|
|
(7,063
|
)
|
||
Ending carrying value
|
$
|
257,832
|
|
|
$
|
100,154
|
|
|
March 31, 2020
|
||||||||||||||||||
|
Non-life
Run-off
|
|
Atrium
|
|
StarStone
|
|
Other
|
|
Total
|
||||||||||
Outstanding losses
|
$
|
4,392,560
|
|
|
$
|
86,712
|
|
|
$
|
831,996
|
|
|
$
|
9,764
|
|
|
$
|
5,321,032
|
|
IBNR
|
3,937,751
|
|
|
150,666
|
|
|
1,086,293
|
|
|
12,749
|
|
|
5,187,459
|
|
|||||
Fair value adjustments - acquired companies
|
(161,040
|
)
|
|
3,833
|
|
|
(413
|
)
|
|
—
|
|
|
(157,620
|
)
|
|||||
Fair value adjustments - fair value option
|
(274,642
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(274,642
|
)
|
|||||
ULAE
|
322,221
|
|
|
2,399
|
|
|
29,138
|
|
|
—
|
|
|
353,758
|
|
|||||
Total
|
$
|
8,216,850
|
|
|
$
|
243,610
|
|
|
$
|
1,947,014
|
|
|
$
|
22,513
|
|
|
$
|
10,429,987
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation to Consolidated Balance Sheet:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses
|
$
|
5,871,307
|
|
|
$
|
243,610
|
|
|
$
|
1,947,014
|
|
|
$
|
22,513
|
|
|
$
|
8,084,444
|
|
Loss and loss adjustment expenses, at fair value
|
2,345,543
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,345,543
|
|
|||||
Total
|
$
|
8,216,850
|
|
|
$
|
243,610
|
|
|
$
|
1,947,014
|
|
|
$
|
22,513
|
|
|
$
|
10,429,987
|
|
|
December 31, 2019
|
||||||||||||||||||
|
Non-life
Run-off |
|
Atrium
|
|
StarStone
|
|
Other
|
|
Total
|
||||||||||
Outstanding losses
|
$
|
4,407,082
|
|
|
$
|
89,141
|
|
|
$
|
888,794
|
|
|
$
|
9,512
|
|
|
$
|
5,394,529
|
|
IBNR
|
3,945,407
|
|
|
136,543
|
|
|
962,353
|
|
|
13,565
|
|
|
5,057,868
|
|
|||||
Fair value adjustments - acquired companies
|
(170,689
|
)
|
|
3,700
|
|
|
(522
|
)
|
|
—
|
|
|
(167,511
|
)
|
|||||
Fair value adjustments - fair value option
|
(217,933
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(217,933
|
)
|
|||||
ULAE
|
331,494
|
|
|
2,288
|
|
|
28,503
|
|
|
—
|
|
|
362,285
|
|
|||||
Total
|
$
|
8,295,361
|
|
|
$
|
231,672
|
|
|
$
|
1,879,128
|
|
|
$
|
23,077
|
|
|
$
|
10,429,238
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reconciliation to Consolidated Balance Sheet:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss and loss adjustment expenses
|
$
|
5,674,239
|
|
|
$
|
231,672
|
|
|
$
|
1,879,128
|
|
|
$
|
23,077
|
|
|
$
|
7,808,116
|
|
Loss and loss adjustment expenses, at fair value
|
2,621,122
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,621,122
|
|
|||||
Total
|
$
|
8,295,361
|
|
|
$
|
231,672
|
|
|
$
|
1,879,128
|
|
|
$
|
23,077
|
|
|
$
|
10,429,238
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Balance as of beginning of period
|
$
|
10,429,238
|
|
|
$
|
9,409,504
|
|
Less: reinsurance reserves recoverable
|
2,109,721
|
|
|
1,867,841
|
|
||
Less: deferred charge assets on retroactive reinsurance
|
272,462
|
|
|
86,585
|
|
||
Less: cumulative effect of change in accounting principle on the determination of the allowance for estimated uncollectible reinsurance balances (1)
|
195
|
|
|
—
|
|
||
Net balance as of beginning of period
|
8,046,860
|
|
|
7,455,078
|
|
||
Net incurred losses and LAE:
|
|
|
|
||||
Current period
|
181,203
|
|
|
217,266
|
|
||
Prior periods
|
(73,309
|
)
|
|
95,138
|
|
||
Total net incurred losses and LAE
|
107,894
|
|
|
312,404
|
|
||
Net paid losses:
|
|
|
|
||||
Current period
|
(6,582
|
)
|
|
(28,029
|
)
|
||
Prior periods
|
(378,992
|
)
|
|
(461,605
|
)
|
||
Total net paid losses
|
(385,574
|
)
|
|
(489,634
|
)
|
||
Effect of exchange rate movement
|
(146,083
|
)
|
|
19,679
|
|
||
Assumed business
|
471,150
|
|
|
620,418
|
|
||
Net balance as of March 31
|
8,094,247
|
|
|
7,917,945
|
|
||
Plus: reinsurance reserves recoverable (2)
|
2,077,908
|
|
|
2,077,923
|
|
||
Plus: deferred charge assets on retroactive reinsurance
|
257,832
|
|
|
100,154
|
|
||
Balance as of March 31
|
$
|
10,429,987
|
|
|
$
|
10,096,022
|
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||
|
Non-life Run-off
|
|
Atrium
|
|
StarStone
|
|
Other
|
|
Total
|
||||||||||
Net losses paid
|
$
|
258,966
|
|
|
$
|
17,008
|
|
|
$
|
106,554
|
|
|
$
|
3,046
|
|
|
$
|
385,574
|
|
Net change in case and LAE reserves
|
(174,580
|
)
|
|
139
|
|
|
(43,192
|
)
|
|
252
|
|
|
(217,381
|
)
|
|||||
Net change in IBNR reserves
|
(104,397
|
)
|
|
11,131
|
|
|
75,262
|
|
|
(816
|
)
|
|
(18,820
|
)
|
|||||
Increase (reduction) in estimates of net ultimate losses
|
(20,011
|
)
|
|
28,278
|
|
|
138,624
|
|
|
2,482
|
|
|
149,373
|
|
|||||
Increase (reduction) in provisions for unallocated LAE
|
(7,479
|
)
|
|
—
|
|
|
741
|
|
|
—
|
|
|
(6,738
|
)
|
|||||
Amortization of deferred charge assets
|
14,630
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
14,630
|
|
|||||
Amortization of fair value adjustments
|
9,063
|
|
|
138
|
|
|
(335
|
)
|
|
—
|
|
|
8,866
|
|
|||||
Changes in fair value - fair value option
|
(58,237
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,237
|
)
|
|||||
Net incurred losses and LAE
|
$
|
(62,034
|
)
|
|
$
|
28,416
|
|
|
$
|
139,030
|
|
|
$
|
2,482
|
|
|
$
|
107,894
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||
|
Non-life
Run-off |
|
Atrium
|
|
StarStone
|
|
Other
|
|
Total
|
||||||||||
Net losses paid
|
$
|
349,069
|
|
|
$
|
22,313
|
|
|
$
|
115,417
|
|
|
$
|
2,835
|
|
|
$
|
489,634
|
|
Net change in case and LAE reserves
|
(77,701
|
)
|
|
(413
|
)
|
|
2,056
|
|
|
595
|
|
|
(75,463
|
)
|
|||||
Net change in IBNR reserves
|
(232,895
|
)
|
|
(5,817
|
)
|
|
76,424
|
|
|
1,526
|
|
|
(160,762
|
)
|
|||||
Increase in estimates of net ultimate losses
|
38,473
|
|
|
16,083
|
|
|
193,897
|
|
|
4,956
|
|
|
253,409
|
|
|||||
Increase (reduction) in provisions for unallocated LAE
|
(15,175
|
)
|
|
—
|
|
|
1,348
|
|
|
—
|
|
|
(13,827
|
)
|
|||||
Amortization of deferred charge assets
|
7,064
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7,064
|
|
|||||
Amortization of fair value adjustments
|
8,779
|
|
|
1,131
|
|
|
(193
|
)
|
|
—
|
|
|
9,717
|
|
|||||
Changes in fair value - fair value option
|
56,041
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
56,041
|
|
|||||
Net incurred losses and LAE
|
$
|
95,182
|
|
|
$
|
17,214
|
|
|
$
|
195,052
|
|
|
$
|
4,956
|
|
|
$
|
312,404
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Balance as of beginning of period
|
$
|
8,295,361
|
|
|
$
|
7,540,662
|
|
Less: reinsurance reserves recoverable
|
1,543,614
|
|
|
1,366,123
|
|
||
Less: deferred charge assets on retroactive insurance
|
272,462
|
|
|
86,585
|
|
||
Plus: cumulative effect of change in accounting principal on allowance for estimated uncollectible reinsurance (1)
|
703
|
|
|
—
|
|
||
Net balance as of beginning of period
|
6,479,988
|
|
|
6,087,954
|
|
||
Net incurred losses and LAE:
|
|
|
|
||||
Current period
|
7,849
|
|
|
49,071
|
|
||
Prior periods
|
(69,883
|
)
|
|
46,111
|
|
||
Total net incurred losses and LAE
|
(62,034
|
)
|
|
95,182
|
|
||
Net paid losses:
|
|
|
|
||||
Current period
|
(1,240
|
)
|
|
(18,014
|
)
|
||
Prior periods
|
(257,726
|
)
|
|
(331,055
|
)
|
||
Total net paid losses
|
(258,966
|
)
|
|
(349,069
|
)
|
||
Effect of exchange rate movement
|
(132,128
|
)
|
|
20,689
|
|
||
Assumed business
|
471,150
|
|
|
620,418
|
|
||
Net balance as of March 31
|
6,498,010
|
|
|
6,475,174
|
|
||
Plus: reinsurance reserves recoverable (2)
|
1,461,008
|
|
|
1,579,646
|
|
||
Plus: deferred charge assets on retroactive reinsurance
|
257,832
|
|
|
100,154
|
|
||
Balance as of March 31
|
$
|
8,216,850
|
|
|
$
|
8,154,974
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
Prior
Period
|
|
Current
Period
|
|
Total
|
|
Prior
Period
|
|
Current
Period
|
|
Total
|
||||||||||||
Net losses paid
|
$
|
257,726
|
|
|
$
|
1,240
|
|
|
$
|
258,966
|
|
|
$
|
331,055
|
|
|
$
|
18,014
|
|
|
$
|
349,069
|
|
Net change in case and LAE reserves
|
(176,252
|
)
|
|
1,672
|
|
|
(174,580
|
)
|
|
(97,573
|
)
|
|
19,872
|
|
|
(77,701
|
)
|
||||||
Net change in IBNR reserves
|
(109,334
|
)
|
|
4,937
|
|
|
(104,397
|
)
|
|
(243,815
|
)
|
|
10,920
|
|
|
(232,895
|
)
|
||||||
Increase (reduction) in estimates of net ultimate losses
|
(27,860
|
)
|
|
7,849
|
|
|
(20,011
|
)
|
|
(10,333
|
)
|
|
48,806
|
|
|
38,473
|
|
||||||
Increase (reduction) in provisions for unallocated LAE
|
(7,479
|
)
|
|
—
|
|
|
(7,479
|
)
|
|
(15,440
|
)
|
|
265
|
|
|
(15,175
|
)
|
||||||
Amortization of deferred charge assets
|
14,630
|
|
|
—
|
|
|
14,630
|
|
|
7,064
|
|
|
—
|
|
|
7,064
|
|
||||||
Amortization of fair value adjustments
|
9,063
|
|
|
—
|
|
|
9,063
|
|
|
8,779
|
|
|
—
|
|
|
8,779
|
|
||||||
Changes in fair value - fair value option
|
(58,237
|
)
|
|
—
|
|
|
(58,237
|
)
|
|
56,041
|
|
|
—
|
|
|
56,041
|
|
||||||
Net incurred losses and LAE
|
$
|
(69,883
|
)
|
|
$
|
7,849
|
|
|
$
|
(62,034
|
)
|
|
$
|
46,111
|
|
|
$
|
49,071
|
|
|
$
|
95,182
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Balance as of beginning of period
|
$
|
231,672
|
|
|
$
|
241,284
|
|
Less: reinsurance reserves recoverable
|
28,816
|
|
|
38,768
|
|
||
Less: cumulative effect of change in accounting principal on allowance for estimated uncollectible reinsurance (1)
|
851
|
|
|
—
|
|
||
Net balance as of beginning of period
|
202,005
|
|
|
202,516
|
|
||
Net incurred losses and LAE:
|
|
|
|
||||
Current period
|
27,904
|
|
|
18,237
|
|
||
Prior periods
|
512
|
|
|
(1,023
|
)
|
||
Total net incurred losses and LAE
|
28,416
|
|
|
17,214
|
|
||
Net paid losses:
|
|
|
|
||||
Current period
|
(4,285
|
)
|
|
(7,893
|
)
|
||
Prior periods
|
(12,723
|
)
|
|
(14,420
|
)
|
||
Total net paid losses
|
(17,008
|
)
|
|
(22,313
|
)
|
||
Effect of exchange rate movement
|
(3,238
|
)
|
|
281
|
|
||
Net balance as of March 31
|
210,175
|
|
|
197,698
|
|
||
Plus: reinsurance reserves recoverable (2)
|
33,435
|
|
|
31,682
|
|
||
Balance as of March 31
|
$
|
243,610
|
|
|
$
|
229,380
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
Prior
Period
|
|
Current
Period
|
|
Total
|
|
Prior
Period
|
|
Current
Period
|
|
Total
|
||||||||||||
Net losses paid
|
$
|
12,723
|
|
|
$
|
4,285
|
|
|
$
|
17,008
|
|
|
$
|
14,420
|
|
|
$
|
7,893
|
|
|
$
|
22,313
|
|
Net change in case and LAE reserves
|
(3,034
|
)
|
|
3,173
|
|
|
139
|
|
|
(6,342
|
)
|
|
5,929
|
|
|
(413
|
)
|
||||||
Net change in IBNR reserves
|
(9,315
|
)
|
|
20,446
|
|
|
11,131
|
|
|
(10,232
|
)
|
|
4,415
|
|
|
(5,817
|
)
|
||||||
Increase (reduction) in estimates of net ultimate losses
|
374
|
|
|
27,904
|
|
|
28,278
|
|
|
(2,154
|
)
|
|
18,237
|
|
|
16,083
|
|
||||||
Amortization of fair value adjustments
|
138
|
|
|
—
|
|
|
138
|
|
|
1,131
|
|
|
—
|
|
|
1,131
|
|
||||||
Net incurred losses and LAE
|
$
|
512
|
|
|
$
|
27,904
|
|
|
$
|
28,416
|
|
|
$
|
(1,023
|
)
|
|
$
|
18,237
|
|
|
$
|
17,214
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Balance as of beginning of period
|
$
|
1,879,128
|
|
|
$
|
1,608,697
|
|
Less: reinsurance reserves recoverable
|
537,291
|
|
|
462,950
|
|
||
Less: cumulative effect of change in accounting principal on allowance for estimated uncollectible reinsurance (1)
|
47
|
|
|
—
|
|
||
Net balance as of beginning of period
|
1,341,790
|
|
|
1,145,747
|
|
||
Net incurred losses and LAE:
|
|
|
|
||||
Current period
|
142,105
|
|
|
144,950
|
|
||
Prior periods
|
(3,075
|
)
|
|
50,102
|
|
||
Total net incurred losses and LAE
|
139,030
|
|
|
195,052
|
|
||
Net paid losses:
|
|
|
|
||||
Current period
|
(1,027
|
)
|
|
(1,792
|
)
|
||
Prior periods
|
(105,527
|
)
|
|
(113,625
|
)
|
||
Total net paid losses
|
(106,554
|
)
|
|
(115,417
|
)
|
||
Effect of exchange rate movement
|
(10,717
|
)
|
|
(1,291
|
)
|
||
Net balance as of March 31
|
1,363,549
|
|
|
1,224,091
|
|
||
Plus: reinsurance reserves recoverable (2)
|
583,465
|
|
|
466,595
|
|
||
Balance as of March 31
|
$
|
1,947,014
|
|
|
$
|
1,690,686
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
Prior Period
|
|
Current Period
|
|
Total
|
|
Prior Period
|
|
Current Period
|
|
Total
|
||||||||||||
Net losses paid
|
$
|
105,527
|
|
|
$
|
1,027
|
|
|
$
|
106,554
|
|
|
$
|
113,625
|
|
|
$
|
1,792
|
|
|
$
|
115,417
|
|
Net change in case and LAE reserves
|
(48,693
|
)
|
|
5,501
|
|
|
(43,192
|
)
|
|
(8,824
|
)
|
|
10,880
|
|
|
2,056
|
|
||||||
Net change in IBNR reserves
|
(57,969
|
)
|
|
133,231
|
|
|
75,262
|
|
|
(52,834
|
)
|
|
129,258
|
|
|
76,424
|
|
||||||
Increase (reduction) in estimates of net ultimate losses
|
(1,135
|
)
|
|
139,759
|
|
|
138,624
|
|
|
51,967
|
|
|
141,930
|
|
|
193,897
|
|
||||||
Increase (reduction) in provisions for unallocated LAE
|
(1,605
|
)
|
|
2,346
|
|
|
741
|
|
|
(1,672
|
)
|
|
3,020
|
|
|
1,348
|
|
||||||
Amortization of fair value adjustments
|
(335
|
)
|
|
—
|
|
|
(335
|
)
|
|
(193
|
)
|
|
—
|
|
|
(193
|
)
|
||||||
Net incurred losses and LAE
|
$
|
(3,075
|
)
|
|
$
|
142,105
|
|
|
$
|
139,030
|
|
|
$
|
50,102
|
|
|
$
|
144,950
|
|
|
$
|
195,052
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Defendant asbestos and environmental liabilities:
|
|
|
|
||||
Defendant asbestos liabilities
|
$
|
1,068,620
|
|
|
$
|
1,100,593
|
|
Defendant environmental liabilities
|
10,146
|
|
|
10,279
|
|
||
Estimated future expenses
|
49,607
|
|
|
51,637
|
|
||
Fair value adjustments
|
(305,657
|
)
|
|
(314,824
|
)
|
||
Defendant asbestos and environmental liabilities
|
822,716
|
|
|
847,685
|
|
||
|
|
|
|
||||
Insurance balances recoverable:
|
|
|
|
||||
Insurance recoveries related to defendant asbestos and environmental liabilities
|
532,653
|
|
|
549,593
|
|
||
Fair value adjustments
|
(97,040
|
)
|
|
(100,738
|
)
|
||
Insurance balances recoverable
|
435,613
|
|
|
448,855
|
|
||
|
|
|
|
||||
Net liabilities relating to defendant asbestos and environmental exposures
|
$
|
387,103
|
|
|
$
|
398,830
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Balance as of beginning of period
|
$
|
847,685
|
|
|
$
|
203,320
|
|
Less: Insurance balances recoverable
|
448,855
|
|
|
135,808
|
|
||
Plus: Cumulative effect of change in accounting principle on the determination of the allowance for estimated uncollectible insurance balances (1)
|
3,167
|
|
|
—
|
|
||
Net balance as of beginning of period
|
401,997
|
|
|
67,512
|
|
||
Total net paid claims
|
6,581
|
|
|
2,751
|
|
||
Amounts recorded in other (income) expense:
|
|
|
|
||||
Change in estimate of ultimate net liabilities
|
(24,915
|
)
|
|
(1,159
|
)
|
||
Increase (reduction) in estimated future expenses
|
(2,028
|
)
|
|
(2,125
|
)
|
||
Amortization of fair value adjustments
|
5,468
|
|
|
101
|
|
||
Total other expense (income)
|
(21,475
|
)
|
|
(3,183
|
)
|
||
Net balance as at March 31
|
387,103
|
|
|
67,080
|
|
||
Plus: Insurance balances recoverable (2)
|
435,613
|
|
|
130,432
|
|
||
Balance as at March 31
|
$
|
822,716
|
|
|
$
|
197,512
|
|
|
Three Months Ended
|
||
|
March 31, 2020
|
||
Allowance for estimated uncollectible insurance balances, beginning of period
|
$
|
3,818
|
|
Cumulative effect of change in accounting principle
|
3,167
|
|
|
Allowance for estimated uncollectible insurance balances, end of period
|
$
|
6,985
|
|
•
|
Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments.
|
•
|
Level 2 - Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.
|
•
|
Level 3 - Valuations based on unobservable inputs where there is little or no market activity. Unadjusted third party pricing sources or management's assumptions and internal valuation models may be used to determine the fair values.
|
|
|
March 31, 2020
|
||||||||||||||||||
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Fair Value Based on NAV as Practical Expedient
|
|
Total Fair
Value |
||||||||||
Investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term and fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agency
|
|
$
|
—
|
|
|
$
|
519,933
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
519,933
|
|
U.K. government
|
|
—
|
|
|
100,005
|
|
|
—
|
|
|
—
|
|
|
100,005
|
|
|||||
Other government
|
|
—
|
|
|
604,014
|
|
|
—
|
|
|
—
|
|
|
604,014
|
|
|||||
Corporate
|
|
—
|
|
|
5,538,691
|
|
|
—
|
|
|
—
|
|
|
5,538,691
|
|
|||||
Municipal
|
|
—
|
|
|
164,830
|
|
|
—
|
|
|
—
|
|
|
164,830
|
|
|||||
Residential mortgage-backed
|
|
—
|
|
|
467,918
|
|
|
—
|
|
|
—
|
|
|
467,918
|
|
|||||
Commercial mortgage-backed
|
|
—
|
|
|
873,504
|
|
|
—
|
|
|
—
|
|
|
873,504
|
|
|||||
Asset-backed
|
|
—
|
|
|
754,875
|
|
|
—
|
|
|
—
|
|
|
754,875
|
|
|||||
|
|
$
|
—
|
|
|
$
|
9,023,770
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,023,770
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other assets included within funds held - directly managed
|
|
—
|
|
|
53,292
|
|
|
—
|
|
|
—
|
|
|
53,292
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Publicly traded equity investments
|
|
$
|
210,419
|
|
|
$
|
30,513
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
240,932
|
|
Exchange-traded funds
|
|
130,906
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
130,906
|
|
|||||
Privately held equity investments
|
|
—
|
|
|
—
|
|
|
270,012
|
|
|
—
|
|
|
270,012
|
|
|||||
|
|
$
|
341,325
|
|
|
$
|
30,513
|
|
|
$
|
270,012
|
|
|
$
|
—
|
|
|
$
|
641,850
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedge funds
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,055,448
|
|
|
$
|
1,055,448
|
|
Fixed income funds
|
|
—
|
|
|
325,066
|
|
|
—
|
|
|
138,651
|
|
|
463,717
|
|
|||||
Equity funds
|
|
—
|
|
|
76,591
|
|
|
—
|
|
|
243,455
|
|
|
320,046
|
|
|||||
Private equity funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
309,219
|
|
|
309,219
|
|
|||||
CLO equities
|
|
—
|
|
|
83,740
|
|
|
—
|
|
|
—
|
|
|
83,740
|
|
|||||
CLO equity funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
66,938
|
|
|
66,938
|
|
|||||
Private credit funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
20,473
|
|
|
20,473
|
|
|||||
Other
|
|
—
|
|
|
—
|
|
|
514
|
|
|
6,889
|
|
|
7,403
|
|
|||||
|
|
$
|
—
|
|
|
$
|
485,397
|
|
|
$
|
514
|
|
|
$
|
1,841,073
|
|
|
$
|
2,326,984
|
|
Total Investments
|
|
$
|
341,325
|
|
|
$
|
9,592,972
|
|
|
$
|
270,526
|
|
|
$
|
1,841,073
|
|
|
$
|
12,045,896
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
204,294
|
|
|
$
|
122,243
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
326,537
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances recoverable on paid and unpaid losses:
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
653,396
|
|
|
$
|
—
|
|
|
$
|
653,396
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives qualifying as hedges
|
|
$
|
—
|
|
|
$
|
17,655
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,655
|
|
Derivatives not qualifying as hedges
|
|
—
|
|
|
7,652
|
|
|
—
|
|
|
—
|
|
|
7,652
|
|
|||||
Derivative instruments
|
|
$
|
—
|
|
|
$
|
25,307
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
25,307
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Losses and LAE:
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,345,543
|
|
|
$
|
—
|
|
|
$
|
2,345,543
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives qualifying as hedges
|
|
$
|
—
|
|
|
$
|
943
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
943
|
|
Derivatives not qualifying as hedges
|
|
—
|
|
|
2,994
|
|
|
—
|
|
|
—
|
|
|
2,994
|
|
|||||
Derivative instruments
|
|
$
|
—
|
|
|
$
|
3,937
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,937
|
|
|
|
December 31, 2019
|
||||||||||||||||||
|
|
Quoted Prices in
Active Markets for Identical Assets (Level 1) |
|
Significant
Other Observable Inputs (Level 2) |
|
Significant
Unobservable Inputs (Level 3) |
|
Fair Value Based on NAV as Practical Expedient
|
|
Total Fair
Value |
||||||||||
Investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Short-term and fixed maturity investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
U.S. government and agency
|
|
$
|
—
|
|
|
$
|
736,043
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
736,043
|
|
U.K government
|
|
—
|
|
|
161,772
|
|
|
—
|
|
|
—
|
|
|
161,772
|
|
|||||
Other government
|
|
—
|
|
|
702,857
|
|
|
—
|
|
|
—
|
|
|
702,857
|
|
|||||
Corporate
|
|
—
|
|
|
5,697,067
|
|
|
—
|
|
|
—
|
|
|
5,697,067
|
|
|||||
Municipal
|
|
—
|
|
|
167,882
|
|
|
—
|
|
|
—
|
|
|
167,882
|
|
|||||
Residential mortgage-backed
|
|
—
|
|
|
471,836
|
|
|
—
|
|
|
—
|
|
|
471,836
|
|
|||||
Commercial mortgage-backed
|
|
—
|
|
|
900,029
|
|
|
—
|
|
|
—
|
|
|
900,029
|
|
|||||
Asset-backed
|
|
—
|
|
|
775,402
|
|
|
—
|
|
|
—
|
|
|
775,402
|
|
|||||
|
|
$
|
—
|
|
|
$
|
9,612,888
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
9,612,888
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other assets included within funds held - directly managed
|
|
$
|
—
|
|
|
$
|
14,207
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14,207
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Equities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Publicly traded equity investments
|
|
$
|
297,310
|
|
|
$
|
30,565
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
327,875
|
|
Exchange-traded funds
|
|
133,047
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
133,047
|
|
|||||
Privately held equity investments
|
|
—
|
|
|
—
|
|
|
268,799
|
|
|
—
|
|
|
268,799
|
|
|||||
|
|
$
|
430,357
|
|
|
$
|
30,565
|
|
|
$
|
268,799
|
|
|
$
|
—
|
|
|
$
|
729,721
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other investments:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Hedge funds
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,121,904
|
|
|
$
|
1,121,904
|
|
Fixed income funds
|
|
—
|
|
|
398,143
|
|
|
—
|
|
|
82,896
|
|
|
481,039
|
|
|||||
Equity funds
|
|
—
|
|
|
111,040
|
|
|
—
|
|
|
299,109
|
|
|
410,149
|
|
|||||
Private equity funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
329,885
|
|
|
329,885
|
|
|||||
CLO equities
|
|
—
|
|
|
—
|
|
|
87,555
|
|
|
—
|
|
|
87,555
|
|
|||||
CLO equity funds
|
|
—
|
|
|
—
|
|
|
—
|
|
|
87,509
|
|
|
87,509
|
|
|||||
Other
|
|
—
|
|
|
34
|
|
|
314
|
|
|
6,031
|
|
|
6,379
|
|
|||||
|
|
$
|
—
|
|
|
$
|
509,217
|
|
|
$
|
87,869
|
|
|
$
|
1,927,334
|
|
|
$
|
2,524,420
|
|
Total Investments
|
|
$
|
430,357
|
|
|
$
|
10,166,877
|
|
|
$
|
356,668
|
|
|
$
|
1,927,334
|
|
|
$
|
12,881,236
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
|
$
|
173,892
|
|
|
$
|
222,191
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
396,083
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Reinsurance balances recoverable on paid and unpaid losses:
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
695,518
|
|
|
$
|
—
|
|
|
$
|
695,518
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives qualifying as hedges
|
|
$
|
—
|
|
|
$
|
642
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
642
|
|
Derivatives not qualifying as hedges
|
|
—
|
|
|
1,369
|
|
|
—
|
|
|
—
|
|
|
1,369
|
|
|||||
Derivative instruments
|
|
$
|
—
|
|
|
$
|
2,011
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,011
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Losses and LAE:
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,621,122
|
|
|
$
|
—
|
|
|
$
|
2,621,122
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Derivatives qualifying as hedges
|
|
$
|
—
|
|
|
$
|
11,452
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
11,452
|
|
Derivatives not qualifying as hedges
|
|
—
|
|
|
4,106
|
|
|
—
|
|
|
—
|
|
|
4,106
|
|
|||||
Derivative instruments
|
|
$
|
—
|
|
|
$
|
15,558
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
15,558
|
|
•
|
U.S. government and agency securities consist of securities issued by the U.S. Treasury and mortgage pass-through agencies such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and other agencies. Non-U.S. government securities consist of bonds issued by non-U.S. governments and agencies along with supranational organizations. The significant inputs used to determine the fair value of these securities include the spread above the risk-free yield curve, reported trades and broker-dealer quotes. These are considered to be observable market inputs and, therefore, the fair values of these securities are classified as Level 2.
|
•
|
Corporate securities consist primarily of investment-grade debt of a wide variety of corporate issuers and industries. The fair values of these securities are determined using the spread above the risk-free yield curve, reported trades, broker-dealer quotes, benchmark yields, and industry and market indicators. These are considered observable market inputs and, therefore, the fair values of these securities are classified as Level 2. Where pricing is unavailable from pricing services, such as in periods of low trading activity or when transactions are not orderly, we obtain non-binding quotes from broker-dealers. Where significant inputs are unable to be corroborated with market observable information, we classify the securities as Level 3.
|
•
|
Municipal securities consist primarily of bonds issued by U.S.-domiciled state and municipal entities. The fair values of these securities are determined using the spread above the risk-free yield curve, reported trades, broker-dealer quotes and benchmark yields. These are considered observable market inputs and, therefore, the fair values of these securities are classified as Level 2.
|
•
|
Asset-backed securities consist primarily of investment-grade bonds backed by pools of loans with a variety of underlying collateral. Residential and commercial mortgage-backed securities include both agency and non-agency originated securities. Where pricing is unavailable from pricing services, we obtain non-binding quotes from broker-dealers. This is generally the case when there is a low volume of trading activity and current transactions are not orderly. The significant inputs used to determine the fair value of these securities include the spread above the risk-free yield curve, reported trades, benchmark yields, prepayment speeds and default rates. The fair values of these securities are classified as Level 2 if the significant inputs are market observable. Where significant inputs are unable to be corroborated with market observable information, we classify the securities as Level 3.
|
•
|
For our investments in hedge funds, we measure fair value by obtaining the most recently available NAV as advised by the external fund manager or third-party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.
|
•
|
Our investments in fixed income funds and equity funds are valued based on a combination of prices from independent pricing services, external fund managers or third-party administrators. For the publicly available prices we have classified the investments as Level 2. For the non-publicly available prices we are using NAV as a practical expedient and therefore these have not been categorized within the fair value hierarchy.
|
•
|
For our investments in private equity funds, we measure fair value by obtaining the most recently available NAV from the external fund manager or third-party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.
|
•
|
We measure the fair value of our direct investment in CLO equities based on valuations provided by independent pricing services, our external CLO equity manager, and valuations provided by the broker or lead underwriter of the investment (the "broker"). The fair values measured using prices provided by independent pricing services have been classified as Level 2 and fair values using prices from brokers have been classified as Level 3 due to the use of unobservable inputs in the valuation and the limited number of relevant trades in secondary markets.
|
•
|
For our investments in the CLO equity funds, we measure fair value by obtaining the most recently available NAV as advised by the external fund manager or third party administrator. The fair value of these investments is measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.
|
•
|
For our investments in private credit funds, we measure fair value by obtaining the most recently available NAV from the external fund manager or third-party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.
|
•
|
Included within other is an investment in a real estate debt fund, for which we measure fair value by obtaining the most recently available NAV from the external fund manager or third-party administrator. The fair value of this investment is measured using the NAV as a practical expedient and therefore has not been categorized within the fair value hierarchy.
|
|
|
Three Months Ended March 31, 2020
|
||||||||||
|
|
Privately-held Equities
|
|
Other Investments
|
|
Total
|
||||||
|
|
|
|
|||||||||
Beginning fair value
|
|
$
|
268,799
|
|
|
$
|
87,869
|
|
|
$
|
356,668
|
|
Purchases
|
|
1,358
|
|
|
37,292
|
|
|
38,650
|
|
|||
Sales
|
|
—
|
|
|
(539
|
)
|
|
(539
|
)
|
|||
Total realized and unrealized losses
|
|
(145
|
)
|
|
(40,368
|
)
|
|
(40,513
|
)
|
|||
Transfer out of Level 3 into Level 2
|
|
—
|
|
|
(83,740
|
)
|
|
(83,740
|
)
|
|||
Ending fair value
|
|
$
|
270,012
|
|
|
$
|
514
|
|
|
$
|
270,526
|
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||||||
|
|
Fixed maturity investments
|
|
Privately-held Equities
|
|
Other Investments
|
|
Total
|
||||||||||||||||
|
|
Corporate
|
|
Commercial mortgage-backed
|
|
Asset-backed
|
|
|
|
|||||||||||||||
Beginning fair value
|
|
$
|
37,386
|
|
|
$
|
7,389
|
|
|
$
|
9,121
|
|
|
$
|
228,710
|
|
|
$
|
39,367
|
|
|
$
|
321,973
|
|
Sales
|
|
(2,660
|
)
|
|
(608
|
)
|
|
(321
|
)
|
|
—
|
|
|
—
|
|
|
(3,589
|
)
|
||||||
Total realized and unrealized gains
|
|
257
|
|
|
62
|
|
|
737
|
|
|
—
|
|
|
2,380
|
|
|
3,436
|
|
||||||
Transfer into Level 3 from Level 2
|
|
387
|
|
|
—
|
|
|
6,225
|
|
|
—
|
|
|
—
|
|
|
6,612
|
|
||||||
Transfer out of Level 3 into Level 2
|
|
(32,198
|
)
|
|
(6,843
|
)
|
|
(6,462
|
)
|
|
—
|
|
|
—
|
|
|
(45,503
|
)
|
||||||
Ending fair value
|
|
$
|
3,172
|
|
|
$
|
—
|
|
|
$
|
9,300
|
|
|
$
|
228,710
|
|
|
$
|
41,747
|
|
|
$
|
282,929
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
Liability for losses and LAE
|
|
Reinsurance balances recoverable
|
|
Net
|
|
Liability for losses and LAE
|
|
Reinsurance balances recoverable
|
|
Net
|
||||||||||||
Beginning fair value
|
$
|
2,621,122
|
|
|
$
|
695,518
|
|
|
$
|
1,925,604
|
|
|
$
|
2,874,055
|
|
|
$
|
739,591
|
|
|
$
|
2,134,464
|
|
Assumed business
|
4,975
|
|
|
—
|
|
|
4,975
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Incurred losses and LAE:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Reduction in estimates of ultimate losses
|
(14,439
|
)
|
|
(3,171
|
)
|
|
(11,268
|
)
|
|
(7,154
|
)
|
|
(3,486
|
)
|
|
(3,668
|
)
|
||||||
Reduction in unallocated LAE
|
(6,413
|
)
|
|
—
|
|
|
(6,413
|
)
|
|
(4,341
|
)
|
|
—
|
|
|
(4,341
|
)
|
||||||
Change in fair value
|
(64,804
|
)
|
|
(6,567
|
)
|
|
(58,237
|
)
|
|
77,461
|
|
|
21,420
|
|
|
56,041
|
|
||||||
Total incurred losses and LAE
|
(85,656
|
)
|
|
(9,738
|
)
|
|
(75,918
|
)
|
|
65,966
|
|
|
17,934
|
|
|
48,032
|
|
||||||
Paid losses
|
(81,163
|
)
|
|
(16,114
|
)
|
|
(65,049
|
)
|
|
(115,860
|
)
|
|
(27,242
|
)
|
|
(88,618
|
)
|
||||||
Effect of exchange rate movements
|
(113,735
|
)
|
|
(16,270
|
)
|
|
(97,465
|
)
|
|
23,632
|
|
|
4,974
|
|
|
18,658
|
|
||||||
Ending fair value
|
$
|
2,345,543
|
|
|
$
|
653,396
|
|
|
$
|
1,692,147
|
|
|
$
|
2,847,793
|
|
|
$
|
735,257
|
|
|
$
|
2,112,536
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Changes in fair value due to changes in:
|
|
|
|
|
||||
Duration
|
|
$
|
4,148
|
|
|
$
|
9,047
|
|
Corporate bond yield
|
|
(64,092
|
)
|
|
46,994
|
|
||
Weighted cost of capital
|
|
(5,048
|
)
|
|
—
|
|
||
Risk cost of capital
|
|
6,755
|
|
|
—
|
|
||
Change in fair value
|
|
$
|
(58,237
|
)
|
|
$
|
56,041
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
Valuation Technique
|
|
Unobservable (U) and Observable (O) Inputs
|
|
Weighted Average
|
|
Weighted Average
|
Internal model
|
|
Corporate bond yield (O)
|
|
A rated
|
|
A rated
|
Internal model
|
|
Credit spread for non-performance risk (U)
|
|
0.2%
|
|
0.2%
|
Internal model
|
|
Risk cost of capital (U)
|
|
5.1%
|
|
5.1%
|
Internal model
|
|
Weighted average cost of capital (U)
|
|
8.25%
|
|
8.5%
|
Internal model
|
|
Duration - liability (U)
|
|
7.91 years
|
|
7.82 years
|
Internal model
|
|
Duration - reinsurance balances recoverable (U)
|
|
8.74 years
|
|
8.68 years
|
•
|
An increase in the corporate bond rate or credit spread for non-performance risk would result in a decrease
|
•
|
An increase in the weighted average cost of capital would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses. Conversely, a decrease in the weighted average cost of capital would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses.
|
•
|
An increase in the risk cost of capital would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses. Conversely, a decrease in the risk cost of capital would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses.
|
•
|
The duration of the liability and recoverable is adjusted every period to reflect actual net payments during the period and expected future payments. An acceleration of the estimated payment pattern, a decrease in duration, would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses. Conversely, a deceleration of the estimated payment pattern, an increase in duration, would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses.
|
|
Three Months Ended March 31,
|
||||||||||||||
|
2020
|
|
2019
|
||||||||||||
|
Premiums
Written
|
|
Premiums
Earned
|
|
Premiums
Written
|
|
Premiums
Earned
|
||||||||
Non-life Run-off
|
|
|
|
|
|
|
|
||||||||
Gross
|
$
|
327
|
|
|
$
|
18,078
|
|
|
$
|
(20,877
|
)
|
|
$
|
83,966
|
|
Ceded
|
1,849
|
|
|
(2,048
|
)
|
|
1,699
|
|
|
(7,292
|
)
|
||||
Net
|
$
|
2,176
|
|
|
$
|
16,030
|
|
|
$
|
(19,178
|
)
|
|
$
|
76,674
|
|
Atrium
|
|
|
|
|
|
|
|
||||||||
Gross
|
$
|
57,837
|
|
|
$
|
47,833
|
|
|
$
|
53,985
|
|
|
$
|
43,386
|
|
Ceded
|
(9,139
|
)
|
|
(5,463
|
)
|
|
(7,486
|
)
|
|
(4,633
|
)
|
||||
Net
|
$
|
48,698
|
|
|
$
|
42,370
|
|
|
$
|
46,499
|
|
|
$
|
38,753
|
|
StarStone
|
|
|
|
|
|
|
|
||||||||
Gross
|
$
|
279,854
|
|
|
$
|
258,107
|
|
|
$
|
251,373
|
|
|
$
|
268,264
|
|
Ceded
|
(90,819
|
)
|
|
(59,947
|
)
|
|
(56,772
|
)
|
|
(55,002
|
)
|
||||
Net
|
$
|
189,035
|
|
|
$
|
198,160
|
|
|
$
|
194,601
|
|
|
$
|
213,262
|
|
Other
|
|
|
|
|
|
|
|
||||||||
Gross
|
$
|
(3,885
|
)
|
|
$
|
2,673
|
|
|
$
|
864
|
|
|
$
|
6,673
|
|
Ceded
|
664
|
|
|
664
|
|
|
(19
|
)
|
|
(75
|
)
|
||||
Net
|
$
|
(3,221
|
)
|
|
$
|
3,337
|
|
|
$
|
845
|
|
|
$
|
6,598
|
|
Total
|
|
|
|
|
|
|
|
||||||||
Gross
|
$
|
334,133
|
|
|
$
|
326,691
|
|
|
$
|
285,345
|
|
|
$
|
402,289
|
|
Ceded
|
(97,445
|
)
|
|
(66,794
|
)
|
|
(62,578
|
)
|
|
(67,002
|
)
|
||||
Total
|
$
|
236,688
|
|
|
$
|
259,897
|
|
|
$
|
222,767
|
|
|
$
|
335,287
|
|
|
|
|
Intangible assets
|
|
|
||||||||||||||
|
Goodwill
|
|
Intangible
assets with
a definite life
|
|
Intangible
assets with
an indefinite life
|
|
Total
|
|
Total
|
||||||||||
Balance as of January 1, 2020
|
$
|
114,807
|
|
|
$
|
14,630
|
|
|
$
|
87,031
|
|
|
$
|
101,661
|
|
|
$
|
216,468
|
|
Amortization
|
—
|
|
|
(508
|
)
|
|
—
|
|
|
(508
|
)
|
|
(508
|
)
|
|||||
Balance as of March 31, 2020
|
$
|
114,807
|
|
|
$
|
14,122
|
|
|
$
|
87,031
|
|
|
$
|
101,153
|
|
|
$
|
215,960
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Intangible asset amortization
|
$
|
508
|
|
|
$
|
565
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||||||||||||||||||
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Net
Carrying
Value
|
||||||||||||
Intangible assets with a definite life:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Distribution channel
|
$
|
20,000
|
|
|
$
|
(8,444
|
)
|
|
$
|
11,556
|
|
|
$
|
20,000
|
|
|
$
|
(8,111
|
)
|
|
$
|
11,889
|
|
Brand
|
7,000
|
|
|
(4,434
|
)
|
|
2,566
|
|
|
7,000
|
|
|
(4,259
|
)
|
|
2,741
|
|
||||||
Total
|
$
|
27,000
|
|
|
$
|
(12,878
|
)
|
|
$
|
14,122
|
|
|
$
|
27,000
|
|
|
$
|
(12,370
|
)
|
|
$
|
14,630
|
|
Intangible assets with an indefinite life:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Lloyd’s syndicate capacity
|
$
|
37,031
|
|
|
$
|
—
|
|
|
$
|
37,031
|
|
|
$
|
37,031
|
|
|
$
|
—
|
|
|
$
|
37,031
|
|
Licenses
|
19,900
|
|
|
—
|
|
|
19,900
|
|
|
19,900
|
|
|
—
|
|
|
19,900
|
|
||||||
Management contract
|
30,100
|
|
|
—
|
|
|
30,100
|
|
|
30,100
|
|
|
—
|
|
|
30,100
|
|
||||||
Total
|
$
|
87,031
|
|
|
$
|
—
|
|
|
$
|
87,031
|
|
|
$
|
87,031
|
|
|
$
|
—
|
|
|
$
|
87,031
|
|
Facility
|
|
Origination Date
|
|
Term
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
4.50% Senior Notes due 2022
|
|
March 10, 2017
|
|
5 years
|
|
$
|
348,794
|
|
|
$
|
348,616
|
|
4.95% Senior Notes due 2029
|
|
May 28, 2019
|
|
10 years
|
|
493,643
|
|
|
493,600
|
|
||
Total Senior Notes
|
|
|
|
|
|
842,437
|
|
|
842,216
|
|
||
EGL Revolving Credit Facility
|
|
August 16, 2018
|
|
5 years
|
|
350,000
|
|
|
—
|
|
||
2018 EGL Term Loan Facility
|
|
December 27, 2018
|
|
3 years
|
|
349,117
|
|
|
348,991
|
|
||
Total debt obligations
|
|
|
|
$
|
1,541,554
|
|
|
$
|
1,191,207
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Interest expense on debt obligations
|
$
|
13,195
|
|
|
$
|
10,453
|
|
Amortization of debt issuance costs
|
220
|
|
|
273
|
|
||
Funds withheld balances and other
|
—
|
|
|
310
|
|
||
Total interest expense
|
$
|
13,415
|
|
|
$
|
11,036
|
|
|
|
Three Months Ended
|
||||||
|
|
March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Balance at beginning of period
|
|
$
|
438,791
|
|
|
$
|
458,543
|
|
Net losses attributable to RNCI
|
|
(31,959
|
)
|
|
(2,544
|
)
|
||
Accumulated other comprehensive earnings (losses) attributable to RNCI
|
|
(4,170
|
)
|
|
85
|
|
||
Change in redemption value of RNCI
|
|
(10,150
|
)
|
|
262
|
|
||
Cumulative effect of change in accounting principle attributable to RNCI (1)
|
|
261
|
|
|
—
|
|
||
Balance at end of period
|
|
$
|
392,773
|
|
|
$
|
456,346
|
|
|
|
|
|
|
|
|
|
Dividend per:
|
|
|
||||||||
Preferred Share Series
|
|
Date Declared
|
|
Record Date
|
|
Date Paid or Payable
|
|
Preferred Share
|
|
Depositary Share
|
|
Total dividends paid in the three months ended March 31, 2020
|
||||||
|
|
|
|
|
|
|
|
(in U.S. dollars)
|
|
(in thousands of U.S. dollars)
|
||||||||
Series D
|
|
February 4, 2020
|
|
February 15, 2020
|
|
March 2, 2020
|
|
$
|
437.50
|
|
|
$
|
0.43750
|
|
|
$
|
7,000
|
|
Series E
|
|
February 4, 2020
|
|
February 15, 2020
|
|
March 2, 2020
|
|
$
|
437.50
|
|
|
$
|
0.43750
|
|
|
1,925
|
|
|
Series D
|
|
May 5, 2020
|
|
May 15, 2020
|
|
June 1, 2020
|
|
$
|
437.50
|
|
|
$
|
0.43750
|
|
|
—
|
|
|
Series E
|
|
May 5, 2020
|
|
May 15, 2020
|
|
June 1, 2020
|
|
$
|
437.50
|
|
|
$
|
0.43750
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
8,925
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
Numerator:
|
|
|
|
||||
Net earnings (losses) attributable to Enstar ordinary shareholders:
|
$
|
(516,821
|
)
|
|
$
|
358,751
|
|
Denominator:
|
|
|
|
||||
Weighted-average ordinary shares outstanding — basic (1)
|
21,549,844
|
|
|
21,463,499
|
|
||
Effect of dilutive securities:
|
|
|
|
||||
Share-based compensation plans (2)
|
164,435
|
|
|
122,980
|
|
||
Warrants
|
65,627
|
|
|
59,383
|
|
||
Weighted-average ordinary shares outstanding — diluted
|
21,779,906
|
|
|
21,645,862
|
|
||
|
|
|
|
||||
Earnings (losses) per ordinary share attributable to Enstar:
|
|
|
|
||||
Basic net earnings (losses) per ordinary share
|
$
|
(23.98
|
)
|
|
$
|
16.71
|
|
Diluted net earnings (losses) per ordinary share (3)
|
$
|
(23.98
|
)
|
|
$
|
16.57
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2020
|
|
2019
|
||||
Share-based compensation plans:
|
|
|
|
|
||||
Restricted shares and restricted share units
|
|
$
|
1,599
|
|
|
$
|
1,843
|
|
Performance share units
|
|
(667
|
)
|
|
1,325
|
|
||
Cash-settled stock appreciation rights
|
|
(3,159
|
)
|
|
56
|
|
||
Joint share ownership plan expense
|
|
872
|
|
|
—
|
|
||
Other share-based compensation plans:
|
|
|
|
|
||||
Northshore incentive plan
|
|
472
|
|
|
1,046
|
|
||
StarStone incentive plan
|
|
(223
|
)
|
|
—
|
|
||
Deferred compensation and ordinary share plan for non-employee directors
|
|
866
|
|
|
827
|
|
||
Employee share purchase plan
|
|
104
|
|
|
103
|
|
||
Total share-based compensation
|
|
$
|
(136
|
)
|
|
$
|
5,200
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Redeemable Noncontrolling Interest
|
$
|
376,399
|
|
|
$
|
420,499
|
|
•
|
Investments in funds (carried within other investments) managed by Stone Point, with respect to which we recognized net unrealized gains (losses);
|
•
|
Investments in registered investment companies affiliated with entities owned by Trident or otherwise affiliated with Stone Point, with respect to which we recognized net unrealized gains (losses) and interest income;
|
•
|
Separate accounts managed by Eagle Point Credit Management, PRIMA Capital Advisors and SKY Harbor Capital Management, which are affiliates of entities owned by Trident, with respect to which we incurred management fees;
|
•
|
Investments in funds (carried within other investments) managed by Sound Point Capital, an entity in which Mr. Carey has an indirect minority ownership interest and serves as a director, with respect to which we recognized net unrealized gains (losses);
|
•
|
Sound Point Capital has acted as collateral manager for certain of our direct investments in CLO debt and equity securities, with respect to which we recognized net unrealized gains (losses) and interest income;
|
•
|
Marble Point Capital, which is an affiliate of an entity owned by Trident, has acted as collateral manager for certain of our direct investments in CLO debt and equity securities, with respect to which we recognized net unrealized gains (losses) and interest income;
|
•
|
A separate account managed by Sound Point Capital, with respect to which we incurred management fees in prior periods; and
|
•
|
In the fourth quarter of 2018, we invested $25.0 million in Mitchell TopCo Holdings, the parent company of Mitchell International and Genex Services, as a co-investor alongside certain Trident funds.
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Short-term investments, AFS, at fair value
|
$
|
1,134
|
|
|
$
|
1,431
|
|
Fixed maturities, trading, at fair value
|
208,255
|
|
|
269,131
|
|
||
Fixed maturities, AFS, at fair value
|
199,563
|
|
|
160,303
|
|
||
Equities, at fair value
|
91,820
|
|
|
121,794
|
|
||
Other investments, at fair value:
|
|
|
|
||||
Hedge funds
|
16,501
|
|
|
18,993
|
|
||
Fixed income funds
|
310,397
|
|
|
381,449
|
|
||
Private equity funds
|
32,241
|
|
|
34,858
|
|
||
CLO equities
|
31,842
|
|
|
32,560
|
|
||
CLO equity funds
|
66,938
|
|
|
87,509
|
|
||
Private Debt
|
16,528
|
|
|
16,312
|
|
||
Real estate fund
|
21,644
|
|
|
18,106
|
|
||
Cash and cash equivalents
|
55,391
|
|
|
54,080
|
|
||
Other assets
|
346
|
|
|
10
|
|
||
Other liabilities
|
457
|
|
|
4,710
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net investment income
|
$
|
4,084
|
|
|
$
|
1,075
|
|
Net realized and unrealized (losses) gains
|
(102,516
|
)
|
|
20,133
|
|
||
Total net (losses) earnings
|
$
|
(98,432
|
)
|
|
$
|
21,208
|
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
Investments in funds managed by AnglePoint, held by Enhanzed Re
|
$
|
380,681
|
|
|
$
|
327,799
|
|
Our ownership of equity method investments
|
47.4
|
%
|
|
47.4
|
%
|
||
Our share of funds managed by AnglePoint, held by Enhanzed Re
|
$
|
180,443
|
|
|
$
|
155,377
|
|
|
|
|
|
||||
Investment in other funds managed by Hillhouse Capital and AnglePoint:
|
|
|
|
||||
InRe Fund
|
$
|
869,275
|
|
|
$
|
918,633
|
|
Other funds
|
213,123
|
|
|
232,968
|
|
||
|
$
|
1,082,398
|
|
|
$
|
1,151,601
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Investment in Monument
|
$
|
57,737
|
|
|
$
|
60,598
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Investment in Clear Spring
|
$
|
10,952
|
|
|
$
|
10,645
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Balances under StarStone ceding quota share:
|
|
|
|
||||
Reinsurance balances recoverable
|
$
|
23,566
|
|
|
$
|
22,812
|
|
Prepaid insurance premiums
|
12
|
|
|
51
|
|
||
Ceded payable
|
4,189
|
|
|
3,616
|
|
||
Ceded acquisition costs
|
—
|
|
|
21
|
|
||
|
|
|
|
||||
Balances under assuming quota share:
|
|
|
|
||||
Losses and LAE
|
5,307
|
|
|
6,135
|
|
||
Unearned reinsurance premiums
|
3
|
|
|
13
|
|
||
Funds held
|
8,303
|
|
|
8,611
|
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
|
|
|
||||
Transactions under StarStone ceding quota share:
|
|
|
|
||||
Ceded premium earned
|
$
|
(681
|
)
|
|
$
|
(5,485
|
)
|
Ceded incurred losses and LAE
|
754
|
|
|
3,859
|
|
||
Ceded acquisition costs
|
72
|
|
|
54
|
|
||
|
|
|
|
||||
Transactions under assuming quota share:
|
|
|
|
||||
Premium earned
|
170
|
|
|
1,371
|
|
||
Net incurred losses and LAE
|
372
|
|
|
(965
|
)
|
||
Acquisition costs
|
(13
|
)
|
|
(14
|
)
|
||
|
|
|
|
||||
Total net earnings (loss)
|
$
|
674
|
|
|
$
|
(1,180
|
)
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Investment in AmTrust
|
$
|
241,328
|
|
|
$
|
240,115
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Investment in Citco
|
$
|
51,504
|
|
|
$
|
51,742
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Investment in Enhanzed Re
|
$
|
197,206
|
|
|
$
|
182,856
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Balances under ceding quota share:
|
|
|
|
||||
Insurance balances payables
|
$
|
1,519
|
|
|
$
|
1,443
|
|
Reinsurance balances recoverable
|
58,022
|
|
|
59,601
|
|
||
Funds held
|
48,383
|
|
|
50,089
|
|
||
|
|
|
|
||||
Other assets
|
400
|
|
|
1,033
|
|
|
Three Months Ended March 31, 2020
|
||||||
|
2020
|
|
2019
|
||||
Amounts under ceding quota share:
|
|
|
|
||||
Acquisition costs
|
23
|
|
|
—
|
|
||
|
|
|
|
||||
Other income
|
291
|
|
|
86
|
|
||
|
|
|
|
||||
Total net earnings
|
$
|
314
|
|
|
$
|
86
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Lease cost
|
|
|
|
||||
Operating lease cost
|
$
|
3,322
|
|
|
$
|
3,487
|
|
Short-term lease cost(1)
|
58
|
|
|
—
|
|
||
Total lease cost
|
3,380
|
|
|
3,487
|
|
||
Sub-lease income(2)
|
(138
|
)
|
|
(131
|
)
|
||
Total net lease cost
|
$
|
3,242
|
|
|
$
|
3,356
|
|
|
|
|
|
||||
Other information
|
|
|
|
||||
Operating Cash paid for amounts included in the measurement of lease liabilities
|
$
|
3,183
|
|
|
$
|
3,024
|
|
Non-cash activity: right-of-use assets relating to leases
|
72
|
|
|
51,609
|
|
||
Weighted-average remaining lease term
|
6.2 years
|
|
|
6.6 years
|
|
||
Weighted-average discount rate
|
6.3
|
%
|
|
6.2
|
%
|
|
Balance sheet classification
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Right-of-use assets
|
Other assets
|
|
$
|
39,300
|
|
|
$
|
46,747
|
|
Current lease liabilities
|
Other liabilities
|
|
10,467
|
|
|
11,403
|
|
||
Non-current lease liabilities
|
Other liabilities
|
|
31,319
|
|
|
34,785
|
|
|
|
March 31, 2020
|
||
2020
|
|
$
|
9,938
|
|
2021
|
|
9,578
|
|
|
2022
|
|
7,893
|
|
|
2023
|
|
6,873
|
|
|
2024
|
|
5,147
|
|
|
2025 and beyond
|
|
12,205
|
|
|
Total lease payments (1)
|
|
51,634
|
|
|
Less: Imputed interest
|
|
(9,848
|
)
|
|
Present value of lease liabilities
|
|
$
|
41,786
|
|
|
Three Months Ended March 31, 2020
|
||||||||||||||||||
|
Non-life
Run-off
|
|
Atrium
|
|
StarStone
|
|
Other
|
|
Total
|
||||||||||
Gross premiums written
|
$
|
327
|
|
|
$
|
57,837
|
|
|
$
|
279,854
|
|
|
$
|
(3,885
|
)
|
|
$
|
334,133
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums written
|
$
|
2,176
|
|
|
$
|
48,698
|
|
|
$
|
189,035
|
|
|
$
|
(3,221
|
)
|
|
$
|
236,688
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums earned
|
$
|
16,030
|
|
|
$
|
42,370
|
|
|
$
|
198,160
|
|
|
$
|
3,337
|
|
|
$
|
259,897
|
|
Net incurred losses and LAE
|
62,034
|
|
|
(28,416
|
)
|
|
(139,030
|
)
|
|
(2,482
|
)
|
|
(107,894
|
)
|
|||||
Acquisition costs
|
(6,907
|
)
|
|
(14,384
|
)
|
|
(45,212
|
)
|
|
(83
|
)
|
|
(66,586
|
)
|
|||||
Operating expenses
|
(48,210
|
)
|
|
(2,877
|
)
|
|
(34,552
|
)
|
|
—
|
|
|
(85,639
|
)
|
|||||
Underwriting income (loss)
|
22,947
|
|
|
(3,307
|
)
|
|
(20,634
|
)
|
|
772
|
|
|
(222
|
)
|
|||||
Net investment income (loss)
|
67,451
|
|
|
1,525
|
|
|
11,352
|
|
|
(2,488
|
)
|
|
77,840
|
|
|||||
Net realized and unrealized losses
|
(574,682
|
)
|
|
(5,708
|
)
|
|
(54,086
|
)
|
|
—
|
|
|
(634,476
|
)
|
|||||
Fees and commission income
|
4,985
|
|
|
2,543
|
|
|
—
|
|
|
—
|
|
|
7,528
|
|
|||||
Other income (expense)
|
22,295
|
|
|
35
|
|
|
85
|
|
|
(1,971
|
)
|
|
20,444
|
|
|||||
Corporate expenses
|
(8,120
|
)
|
|
(3,138
|
)
|
|
(574
|
)
|
|
(16,040
|
)
|
|
(27,872
|
)
|
|||||
Interest income (expense)
|
(15,899
|
)
|
|
—
|
|
|
(447
|
)
|
|
2,931
|
|
|
(13,415
|
)
|
|||||
Net foreign exchange gains (losses)
|
14,653
|
|
|
(2,133
|
)
|
|
(590
|
)
|
|
—
|
|
|
11,930
|
|
|||||
LOSS BEFORE INCOME TAXES
|
(466,370
|
)
|
|
(10,183
|
)
|
|
(64,894
|
)
|
|
(16,796
|
)
|
|
(558,243
|
)
|
|||||
Income tax benefit
|
2,807
|
|
|
753
|
|
|
1,615
|
|
|
—
|
|
|
5,175
|
|
|||||
Earnings from equity method investments
|
12,450
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,450
|
|
|||||
NET LOSS
|
(451,113
|
)
|
|
(9,430
|
)
|
|
(63,279
|
)
|
|
(16,796
|
)
|
|
(540,618
|
)
|
|||||
Net loss attributable to noncontrolling interest
|
2,087
|
|
|
3,868
|
|
|
26,767
|
|
|
—
|
|
|
32,722
|
|
|||||
NET LOSS ATTRIBUTABLE TO ENSTAR
|
(449,026
|
)
|
|
(5,562
|
)
|
|
(36,512
|
)
|
|
(16,796
|
)
|
|
(507,896
|
)
|
|||||
Dividends on preferred shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,925
|
)
|
|
(8,925
|
)
|
|||||
NET LOSS ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS
|
$
|
(449,026
|
)
|
|
$
|
(5,562
|
)
|
|
$
|
(36,512
|
)
|
|
$
|
(25,721
|
)
|
|
$
|
(516,821
|
)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Underwriting ratios:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss ratio
|
|
|
67.1
|
%
|
|
70.2
|
%
|
|
|
|
|
||||||||
Acquisition expense ratio
|
|
|
33.9
|
%
|
|
22.8
|
%
|
|
|
|
|
||||||||
Operating expense ratio
|
|
|
6.8
|
%
|
|
17.4
|
%
|
|
|
|
|
||||||||
Combined ratio
|
|
|
107.8
|
%
|
|
110.4
|
%
|
|
|
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||
|
Non-life
Run-off
|
|
Atrium
|
|
StarStone
|
|
Other
|
|
Total
|
||||||||||
Gross premiums written
|
$
|
(20,877
|
)
|
|
$
|
53,985
|
|
|
$
|
251,373
|
|
|
$
|
864
|
|
|
$
|
285,345
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums written
|
$
|
(19,178
|
)
|
|
$
|
46,499
|
|
|
$
|
194,601
|
|
|
$
|
845
|
|
|
$
|
222,767
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net premiums earned
|
$
|
76,674
|
|
|
$
|
38,753
|
|
|
$
|
213,262
|
|
|
$
|
6,598
|
|
|
$
|
335,287
|
|
Net incurred losses and LAE
|
(95,182
|
)
|
|
(17,214
|
)
|
|
(195,052
|
)
|
|
(4,956
|
)
|
|
(312,404
|
)
|
|||||
Life and Annuity Policy Benefits
|
—
|
|
|
—
|
|
|
—
|
|
|
(96
|
)
|
|
(96
|
)
|
|||||
Acquisition costs
|
(28,155
|
)
|
|
(13,742
|
)
|
|
(51,659
|
)
|
|
(232
|
)
|
|
(93,788
|
)
|
|||||
Operating expenses
|
(43,992
|
)
|
|
(3,033
|
)
|
|
(35,994
|
)
|
|
—
|
|
|
(83,019
|
)
|
|||||
Underwriting income (loss)
|
(90,655
|
)
|
|
4,764
|
|
|
(69,443
|
)
|
|
1,314
|
|
|
(154,020
|
)
|
|||||
Net investment income (loss)
|
66,728
|
|
|
1,711
|
|
|
11,942
|
|
|
(1,685
|
)
|
|
78,696
|
|
|||||
Net realized and unrealized gains
|
436,186
|
|
|
2,913
|
|
|
20,658
|
|
|
1,034
|
|
|
460,791
|
|
|||||
Fees and commission income
|
4,832
|
|
|
1,849
|
|
|
—
|
|
|
—
|
|
|
6,681
|
|
|||||
Other income
|
5,504
|
|
|
36
|
|
|
60
|
|
|
212
|
|
|
5,812
|
|
|||||
Corporate expenses
|
(16,570
|
)
|
|
(3,788
|
)
|
|
—
|
|
|
(8,697
|
)
|
|
(29,055
|
)
|
|||||
Interest income (expense)
|
(12,116
|
)
|
|
—
|
|
|
(475
|
)
|
|
1,555
|
|
|
(11,036
|
)
|
|||||
Net foreign exchange gains (losses)
|
3,618
|
|
|
825
|
|
|
(594
|
)
|
|
1
|
|
|
3,850
|
|
|||||
EARNINGS (LOSS) BEFORE INCOME TAXES
|
397,527
|
|
|
8,310
|
|
|
(37,852
|
)
|
|
(6,266
|
)
|
|
361,719
|
|
|||||
Income tax expense
|
(2,720
|
)
|
|
(685
|
)
|
|
(1,259
|
)
|
|
(85
|
)
|
|
(4,749
|
)
|
|||||
Earnings from equity method investments
|
8,584
|
|
|
—
|
|
|
188
|
|
|
—
|
|
|
8,772
|
|
|||||
NET EARNINGS (LOSS)
|
403,391
|
|
|
7,625
|
|
|
(38,923
|
)
|
|
(6,351
|
)
|
|
365,742
|
|
|||||
Net loss (earnings) attributable to noncontrolling interest
|
(2,646
|
)
|
|
(3,128
|
)
|
|
7,922
|
|
|
—
|
|
|
2,148
|
|
|||||
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR
|
400,745
|
|
|
4,497
|
|
|
(31,001
|
)
|
|
(6,351
|
)
|
|
367,890
|
|
|||||
Dividend on preferred shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,139
|
)
|
|
(9,139
|
)
|
|||||
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS
|
$
|
400,745
|
|
|
$
|
4,497
|
|
|
$
|
(31,001
|
)
|
|
$
|
(15,490
|
)
|
|
$
|
358,751
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Underwriting ratios:
|
|
|
|
|
|
|
|
|
|
||||||||||
Loss ratio
|
|
|
44.4
|
%
|
|
91.5
|
%
|
|
|
|
|
||||||||
Acquisition expense ratio
|
|
|
35.5
|
%
|
|
24.2
|
%
|
|
|
|
|
||||||||
Operating expense ratio
|
|
|
7.8
|
%
|
|
16.9
|
%
|
|
|
|
|
||||||||
Combined ratio
|
|
|
87.7
|
%
|
|
132.6
|
%
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
||||
Assets by Segment:
|
|
|
|
||||
Non-life Run-off
|
$
|
15,438,588
|
|
|
$
|
15,775,409
|
|
Atrium
|
590,805
|
|
|
580,405
|
|
||
StarStone
|
3,627,036
|
|
|
3,522,353
|
|
||
Other
|
(524,920
|
)
|
|
(514,852
|
)
|
||
Total assets
|
$
|
19,131,509
|
|
|
$
|
19,363,315
|
|
Section
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
|
March 31,
2020 |
|
December 31,
2019 |
|
Change
|
||||||
|
(expressed in thousands of U.S. dollars, except share and per share data)
|
||||||||||
Numerator:
|
|
|
|
|
|
||||||
Total Enstar Shareholder's Equity
|
$
|
4,276,599
|
|
|
$
|
4,842,183
|
|
|
$
|
(565,584
|
)
|
Less: Series D and E Preferred Shares
|
510,000
|
|
|
510,000
|
|
|
—
|
|
|||
Total Enstar Ordinary Shareholders' Equity (A)
|
3,766,599
|
|
|
4,332,183
|
|
|
(565,584
|
)
|
|||
Proceeds from assumed conversion of warrants(1)
|
20,229
|
|
|
20,229
|
|
|
—
|
|
|||
Numerator for fully diluted book value per ordinary share calculations (B)
|
$
|
3,786,828
|
|
|
$
|
4,352,412
|
|
|
$
|
(565,584
|
)
|
|
|
|
|
|
|
||||||
Denominator:
|
|
|
|
|
|
||||||
Ordinary shares outstanding (C) (2)
|
21,554,120
|
|
|
21,511,505
|
|
|
42,615
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Share-based compensation plans (3)
|
180,257
|
|
|
302,565
|
|
|
(122,308
|
)
|
|||
Warrants(1)
|
175,901
|
|
|
175,901
|
|
|
—
|
|
|||
Fully diluted ordinary shares outstanding (D)
|
21,910,278
|
|
|
21,989,971
|
|
|
(79,693
|
)
|
|||
|
|
|
|
|
|
||||||
Book value per ordinary share:
|
|
|
|
|
|
||||||
Basic book value per ordinary share = (A) / (C)
|
$
|
174.75
|
|
|
$
|
201.39
|
|
|
$
|
(26.64
|
)
|
Fully diluted book value per ordinary share = (B) / (D)
|
$
|
172.83
|
|
|
$
|
197.93
|
|
|
$
|
(25.10
|
)
|
|
Three Months Ended
|
||||||
|
March 31,
|
||||||
|
2020
|
|
2019
|
||||
|
(expressed in thousands of U.S. dollars, except share and per share data)
|
||||||
Net earnings (loss) attributable to Enstar ordinary shareholders
|
$
|
(516,821
|
)
|
|
$
|
358,751
|
|
Adjustments:
|
|
|
|
||||
Net realized and unrealized (gains) losses on fixed maturity investments and funds held - directly managed (1)
|
283,385
|
|
|
(246,151
|
)
|
||
Change in fair value of insurance contracts for which we have elected the fair value option
|
(58,237
|
)
|
|
56,041
|
|
||
Tax effects of adjustments (2)
|
(27,074
|
)
|
|
21,849
|
|
||
Adjustments attributable to noncontrolling interest (3)
|
(17,495
|
)
|
|
9,170
|
|
||
Non-GAAP operating income (loss) attributable to Enstar ordinary shareholders (4)
|
$
|
(336,242
|
)
|
|
$
|
199,660
|
|
|
|
|
|
||||
Diluted net earnings (loss) per ordinary share (5)
|
$
|
(23.98
|
)
|
|
$
|
16.57
|
|
Adjustments:
|
|
|
|
||||
Net realized and unrealized (gains) losses on fixed maturity investments and funds held - directly managed (1)
|
13.15
|
|
|
(11.37
|
)
|
||
Change in fair value of insurance contracts for which we have elected the fair value option
|
(2.70
|
)
|
|
2.59
|
|
||
Tax effects of adjustments (2)
|
(1.26
|
)
|
|
1.01
|
|
||
Adjustments attributable to noncontrolling interest (3)
|
(0.81
|
)
|
|
0.42
|
|
||
Diluted non-GAAP operating income (loss) per ordinary share (4) (5)
|
$
|
(15.60
|
)
|
|
$
|
9.22
|
|
|
|
|
|
||||
Weighted average ordinary shares outstanding:
|
|
|
|
||||
Basic
|
21,549,844
|
|
|
21,463,499
|
|
||
Diluted
|
21,779,906
|
|
|
21,645,862
|
|
|
|
Three Months Ended
March 31, 2020
|
|
Period from April 1, 2020 to April 30, 2020(1)
|
||||
|
|
(in thousands of U.S. dollars)
|
||||||
Net unrealized gains (losses) on investments:
|
|
|
|
|
||||
Fixed maturity securities, trading and funds held(2)
|
|
$
|
(286,310
|
)
|
|
$
|
235,577
|
|
Other investments and equities
|
|
(350,084
|
)
|
|
197,362
|
|
||
Total net unrealized gains (losses) on investments
|
|
(636,394
|
)
|
|
432,939
|
|
||
less: Noncontrolling interest share
|
|
23,803
|
|
|
(9,775
|
)
|
||
Earnings impact of net unrealized gains (losses) on investments
|
|
$
|
(612,591
|
)
|
|
$
|
423,164
|
|
|
Atrium
|
|
StarStone
|
|
|
||||||||||||||||||||||
|
Atrium Net (25% of S609)
|
|
Noncontrolling Interests' Share
|
|
Enstar's share of Atrium
|
|
StarStone Net (Segment Level)
|
|
Noncontrolling Interests' Share
|
|
Enstar's share of StarStone
|
|
Total Enstar share
|
||||||||||||||
|
(in millions of U.S. dollars)
|
||||||||||||||||||||||||||
COVID-19 net incurred losses and LAE
|
$
|
8.6
|
|
|
$
|
(3.5
|
)
|
|
$
|
5.1
|
|
|
$
|
32.1
|
|
|
$
|
(9.9
|
)
|
|
$
|
22.2
|
|
|
$
|
27.3
|
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
INCOME
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
259,897
|
|
|
$
|
335,287
|
|
|
$
|
(75,390
|
)
|
Fees and commission income
|
7,528
|
|
|
6,681
|
|
|
847
|
|
|||
Net investment income
|
77,840
|
|
|
78,696
|
|
|
(856
|
)
|
|||
Net realized and unrealized gains (losses) (1)
|
(634,476
|
)
|
|
460,791
|
|
|
(1,095,267
|
)
|
|||
Other income
|
20,444
|
|
|
5,812
|
|
|
14,632
|
|
|||
|
(268,767
|
)
|
|
887,267
|
|
|
(1,156,034
|
)
|
|||
EXPENSES
|
|
|
|
|
|
||||||
Net incurred losses and LAE
|
107,894
|
|
|
312,404
|
|
|
(204,510
|
)
|
|||
Life and annuity policy benefits
|
—
|
|
|
96
|
|
|
(96
|
)
|
|||
Acquisition costs
|
66,586
|
|
|
93,788
|
|
|
(27,202
|
)
|
|||
General and administrative expenses
|
113,511
|
|
|
112,074
|
|
|
1,437
|
|
|||
Interest expense
|
13,415
|
|
|
11,036
|
|
|
2,379
|
|
|||
Net foreign exchange gains
|
(11,930
|
)
|
|
(3,850
|
)
|
|
(8,080
|
)
|
|||
|
289,476
|
|
|
525,548
|
|
|
(236,072
|
)
|
|||
EARNINGS (LOSS) BEFORE INCOME TAXES
|
(558,243
|
)
|
|
361,719
|
|
|
(919,962
|
)
|
|||
Income tax benefit (expense)
|
5,175
|
|
|
(4,749
|
)
|
|
9,924
|
|
|||
Earnings from equity method investments
|
12,450
|
|
|
8,772
|
|
|
3,678
|
|
|||
NET EARNINGS (LOSS)
|
(540,618
|
)
|
|
365,742
|
|
|
(906,360
|
)
|
|||
Net loss attributable to noncontrolling interest
|
32,722
|
|
|
2,148
|
|
|
30,574
|
|
|||
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR
|
(507,896
|
)
|
|
367,890
|
|
|
(875,786
|
)
|
|||
Dividends on preferred shares
|
(8,925
|
)
|
|
(9,139
|
)
|
|
214
|
|
|||
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS
|
$
|
(516,821
|
)
|
|
$
|
358,751
|
|
|
$
|
(875,572
|
)
|
•
|
Consolidated net loss attributable to Enstar ordinary shareholders of $516.8 million and basic and diluted net loss per ordinary share of $23.98.
|
•
|
Non-GAAP operating loss attributable to Enstar ordinary shareholders of $336.2 million and diluted non-GAAP operating loss per ordinary share of $15.60. For a reconciliation of non-GAAP operating loss attributable to Enstar ordinary shareholders to net loss attributable to Enstar ordinary shareholders calculated in accordance with GAAP, and diluted non-GAAP operating loss per ordinary share to diluted net loss per ordinary share calculated in accordance with GAAP, see "Non-GAAP Financial Measure" above.
|
•
|
Net loss from our Non-life Run-off segment of $449.0 million, including net realized and unrealized losses of $574.7 million comprising $2.1 million of net realized gains and $576.8 million of net unrealized losses driven by the impact of the changes in the fair value of our investment portfolio attributable to the recent disruption in global financial markets associated with the COVID-19 pandemic.
|
•
|
Combined ratio of 107.8% for our Atrium segment, with net premiums earned of $42.4 million. Excluding the estimated underwriting losses related to the COVID-19 pandemic, the combined ratio for the Atrium segment was 87.6% for the three months ended March 31, 2020.
|
•
|
Combined ratio of 116.8% for StarStone's core business lines and 110.4% for StarStone segment, with net premiums earned of $198.2 million. Excluding the estimated underwriting losses related to the COVID-19 pandemic, the combined ratio for the StarStone segment was 94.2% for the three months ended March 31, 2020.
|
•
|
Total investments, cash and funds held of $14.4 billion.
|
•
|
Total reinsurance balances recoverable on paid and unpaid losses of $2.3 billion.
|
•
|
Total assets of $19.1 billion.
|
•
|
Total gross and net reserves for losses and LAE of $10.4 billion and $8.1 billion, respectively. During the three months ended March 31, 2020, our Non-life Run-off segment assumed gross and net reserves of $471.2 million.
|
•
|
Total capital under management of $6.2 billion, including common equity of $3.8 billion, preferred equity of $510.0 million, noncontrolling interests of $406.2 million and debt of $1.5 billion.
|
•
|
Diluted book value per ordinary share of $172.83, a decrease of 12.7% since December 31, 2019, which was driven primarily by the impact of the changes in the fair value of our investment portfolio attributable to the recent disruption in global financial markets associated with the COVID-19 pandemic.
|
•
|
Non-life Run-off - Net losses attributable to the Non-life Run-off segment were $449.0 million for the three months ended March 31, 2020 compared to net earnings of $400.7 million for the three months ended March 31, 2019. The decrease in net earnings of $849.8 million was primarily due to net realized and unrealized losses of $574.7 million on our investment portfolio in the current period compared to net gains of $436.2 million in the comparative period. Current period net realized and unrealized losses were driven primarily by the impact of the changes in the fair value of our investment portfolio attributable to the recent disruption in global financial markets associated with the COVID-19 pandemic. The current period unrealized investment results were partially offset by net favorable development on losses and LAE of $62.0 million, including $58.2 million relating to fair value accounting on certain liabilities for which we had elected the fair value option.
|
•
|
Atrium - Net losses attributable to the Atrium segment were $5.6 million for the three months ended March 31, 2020 compared to net earnings of $4.5 million for the three months ended March 31, 2019. The decrease in net earnings was primarily due to a higher loss ratio and net realized and unrealized losses on our investment portfolio in the current period, both of which were largely driven by losses related to the COVID-19 pandemic.
|
•
|
StarStone - Net losses attributable to the StarStone segment were $36.5 million for the three months ended March 31, 2020 compared to net losses of $31.0 million for the three months ended March 31, 2019. The increase in net losses was primarily due to net realized and unrealized losses on our investment portfolio and underwriting losses in the current period which were also driven by the impact of COVID-19. These losses were partially offset by otherwise improved underwriting results, which would have seen a return to profitability if not for the impact of the COVID-19 pandemic.
|
•
|
Net Realized and Unrealized Gains (Losses) - Consolidated net realized and unrealized losses were $634.5 million for the three months ended March 31, 2020 compared to net gains of $460.8 million for the three months ended March 31, 2019. The net realized and unrealized losses in the current period were primarily attributable to decreases in the valuation of our fixed maturity, other and equity investments, primarily due to the recent disruption in global financial markets associated with the COVID-19 pandemic. Given the unique circumstances of the COVID-19 pandemic, the Company has also recorded an unrealized loss estimate for the fair value of certain other investments that are typically reported on a lag basis. For further information on investment valuation methodologies, refer to Note 10 - "Fair Value Measurements" to our unaudited condensed consolidated financial statements included within Item 1 of this Quarterly Report on Form 10-Q.
|
•
|
Non-GAAP Operating Income (Loss) - Our non-GAAP operating loss attributable to Enstar ordinary shareholders, which excludes the impact of net realized and unrealized gains and losses on fixed maturity investments and other items, was $336.2 million for the three months ended March 31, 2020, a decrease of $535.9 million from non-GAAP operating income attributable to Enstar ordinary shareholders of $199.7 million for the three months ended March 31, 2019. The decrease was primarily attributable to net realized and unrealized losses on our other investments and equities of $258.1 million and $93.0 million, respectively, during the three months ended March 31, 2020. For a reconciliation of non-GAAP operating income (loss) attributable to Enstar ordinary shareholders to net earnings (loss) attributable to Enstar ordinary shareholders calculated in accordance with GAAP, see "Non-GAAP Financial Measures" above.
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Segment split of net earnings (loss) attributable to Enstar ordinary shareholders:
|
|
|
|
|
|
||||||
Non-life Run-off
|
$
|
(449,026
|
)
|
|
$
|
400,745
|
|
|
$
|
(849,771
|
)
|
Atrium
|
(5,562
|
)
|
|
4,497
|
|
|
(10,059
|
)
|
|||
StarStone
|
(36,512
|
)
|
|
(31,001
|
)
|
|
(5,511
|
)
|
|||
Other
|
(25,721
|
)
|
|
(15,490
|
)
|
|
(10,231
|
)
|
|||
Net earnings (loss) attributable to Enstar ordinary shareholders
|
$
|
(516,821
|
)
|
|
$
|
358,751
|
|
|
$
|
(875,572
|
)
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Gross premiums written
|
$
|
327
|
|
|
$
|
(20,877
|
)
|
|
$
|
21,204
|
|
|
|
|
|
|
|
||||||
Net premiums written
|
$
|
2,176
|
|
|
$
|
(19,178
|
)
|
|
$
|
21,354
|
|
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
16,030
|
|
|
$
|
76,674
|
|
|
$
|
(60,644
|
)
|
Net incurred losses and LAE (1)
|
62,034
|
|
|
(95,182
|
)
|
|
157,216
|
|
|||
Acquisition costs
|
(6,907
|
)
|
|
(28,155
|
)
|
|
21,248
|
|
|||
Operating expenses
|
(48,210
|
)
|
|
(43,992
|
)
|
|
(4,218
|
)
|
|||
Underwriting income (loss) (1)
|
22,947
|
|
|
(90,655
|
)
|
|
113,602
|
|
|||
Net investment income
|
67,451
|
|
|
66,728
|
|
|
723
|
|
|||
Net realized and unrealized gains (losses) (2)
|
(574,682
|
)
|
|
436,186
|
|
|
(1,010,868
|
)
|
|||
Fees and commission income
|
4,985
|
|
|
4,832
|
|
|
153
|
|
|||
Other income
|
22,295
|
|
|
5,504
|
|
|
16,791
|
|
|||
Corporate expenses
|
(8,120
|
)
|
|
(16,570
|
)
|
|
8,450
|
|
|||
Interest expense
|
(15,899
|
)
|
|
(12,116
|
)
|
|
(3,783
|
)
|
|||
Net foreign exchange gains
|
14,653
|
|
|
3,618
|
|
|
11,035
|
|
|||
EARNINGS (LOSS) BEFORE INCOME TAXES
|
(466,370
|
)
|
|
397,527
|
|
|
(863,897
|
)
|
|||
Income tax benefit (expense)
|
2,807
|
|
|
(2,720
|
)
|
|
5,527
|
|
|||
Earnings from equity method investments
|
12,450
|
|
|
8,584
|
|
|
3,866
|
|
|||
NET EARNINGS (LOSS)
|
(451,113
|
)
|
|
403,391
|
|
|
(854,504
|
)
|
|||
Net loss (earnings) attributable to noncontrolling interest
|
2,087
|
|
|
(2,646
|
)
|
|
4,733
|
|
|||
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS
|
$
|
(449,026
|
)
|
|
$
|
400,745
|
|
|
$
|
(849,771
|
)
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Gross premiums written
|
$
|
327
|
|
|
$
|
(20,877
|
)
|
|
$
|
21,204
|
|
Ceded reinsurance premiums written
|
1,849
|
|
|
1,699
|
|
|
150
|
|
|||
Net premiums written
|
$
|
2,176
|
|
|
$
|
(19,178
|
)
|
|
$
|
21,354
|
|
|
|
|
|
|
|
||||||
Gross premiums earned
|
$
|
18,078
|
|
|
$
|
83,966
|
|
|
$
|
(65,888
|
)
|
Ceded reinsurance premiums earned
|
(2,048
|
)
|
|
(7,292
|
)
|
|
5,244
|
|
|||
Net premiums earned
|
$
|
16,030
|
|
|
$
|
76,674
|
|
|
$
|
(60,644
|
)
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
Prior
Periods |
|
Current
Period |
|
Total
|
|
Prior
Periods |
|
Current
Period |
|
Total
|
||||||||||||
|
(in thousands of U.S. dollars)
|
||||||||||||||||||||||
Net losses paid
|
$
|
257,726
|
|
|
$
|
1,240
|
|
|
$
|
258,966
|
|
|
$
|
331,055
|
|
|
$
|
18,014
|
|
|
$
|
349,069
|
|
Net change in case and LAE reserves (1)
|
(176,252
|
)
|
|
1,672
|
|
|
(174,580
|
)
|
|
(97,573
|
)
|
|
19,872
|
|
|
(77,701
|
)
|
||||||
Net change in IBNR reserves (2)
|
(109,334
|
)
|
|
4,937
|
|
|
(104,397
|
)
|
|
(243,815
|
)
|
|
10,920
|
|
|
(232,895
|
)
|
||||||
Increase (reduction) in estimates of net ultimate losses
|
(27,860
|
)
|
|
7,849
|
|
|
(20,011
|
)
|
|
(10,333
|
)
|
|
48,806
|
|
|
38,473
|
|
||||||
Increase (reduction) in provisions for unallocated LAE
|
(7,479
|
)
|
|
—
|
|
|
(7,479
|
)
|
|
(15,440
|
)
|
|
265
|
|
|
(15,175
|
)
|
||||||
Amortization of deferred charge assets
|
14,630
|
|
|
—
|
|
|
14,630
|
|
|
7,064
|
|
|
—
|
|
|
7,064
|
|
||||||
Amortization of fair value adjustments
|
9,063
|
|
|
—
|
|
|
9,063
|
|
|
8,779
|
|
|
—
|
|
|
8,779
|
|
||||||
Changes in fair value - fair value option
|
(58,237
|
)
|
|
—
|
|
|
(58,237
|
)
|
|
56,041
|
|
|
—
|
|
|
56,041
|
|
||||||
Net incurred losses and LAE
|
$
|
(69,883
|
)
|
|
$
|
7,849
|
|
|
$
|
(62,034
|
)
|
|
$
|
46,111
|
|
|
$
|
49,071
|
|
|
$
|
95,182
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Operating expenses
|
$
|
48,210
|
|
|
$
|
43,992
|
|
|
$
|
4,218
|
|
Corporate expenses
|
8,120
|
|
|
16,570
|
|
|
(8,450
|
)
|
|||
General and administrative expenses
|
$
|
56,330
|
|
|
$
|
60,562
|
|
|
$
|
(4,232
|
)
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Gross premiums written
|
$
|
57,837
|
|
|
$
|
53,985
|
|
|
$
|
3,852
|
|
|
|
|
|
|
|
||||||
Net premiums written
|
$
|
48,698
|
|
|
$
|
46,499
|
|
|
$
|
2,199
|
|
|
|
|
|
|
|
||||||
Net premiums earned
|
$
|
42,370
|
|
|
$
|
38,753
|
|
|
$
|
3,617
|
|
Net incurred losses and LAE
|
(28,416
|
)
|
|
(17,214
|
)
|
|
(11,202
|
)
|
|||
Acquisition costs
|
(14,384
|
)
|
|
(13,742
|
)
|
|
(642
|
)
|
|||
Operating expenses
|
(2,877
|
)
|
|
(3,033
|
)
|
|
156
|
|
|||
Underwriting income (loss)
|
(3,307
|
)
|
|
4,764
|
|
|
(8,071
|
)
|
|||
Net investment income
|
1,525
|
|
|
1,711
|
|
|
(186
|
)
|
|||
Net realized and unrealized gains (losses) (1)
|
(5,708
|
)
|
|
2,913
|
|
|
(8,621
|
)
|
|||
Fees and commission income
|
2,543
|
|
|
1,849
|
|
|
694
|
|
|||
Other income
|
35
|
|
|
36
|
|
|
(1
|
)
|
|||
Corporate expenses
|
(3,138
|
)
|
|
(3,788
|
)
|
|
650
|
|
|||
Net foreign exchange gains (losses)
|
(2,133
|
)
|
|
825
|
|
|
(2,958
|
)
|
|||
EARNINGS (LOSS) BEFORE INCOME TAXES
|
(10,183
|
)
|
|
8,310
|
|
|
(18,493
|
)
|
|||
Income tax benefit (expense)
|
753
|
|
|
(685
|
)
|
|
1,438
|
|
|||
NET EARNINGS (LOSS)
|
(9,430
|
)
|
|
7,625
|
|
|
(17,055
|
)
|
|||
Net loss (earnings) attributable to noncontrolling interest
|
3,868
|
|
|
(3,128
|
)
|
|
6,996
|
|
|||
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS
|
$
|
(5,562
|
)
|
|
$
|
4,497
|
|
|
$
|
(10,059
|
)
|
|
|
|
|
|
|
||||||
Underwriting ratios(2):
|
|
|
|
|
|
||||||
Loss ratio
|
67.1
|
%
|
|
44.4
|
%
|
|
22.7
|
%
|
|||
Acquisition cost ratio
|
33.9
|
%
|
|
35.5
|
%
|
|
(1.6
|
)%
|
|||
Operating expense ratio
|
6.8
|
%
|
|
7.8
|
%
|
|
(1.0
|
)%
|
|||
Combined ratio
|
107.8
|
%
|
|
87.7
|
%
|
|
20.1
|
%
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Marine, Aviation and Transit
|
$
|
15,894
|
|
|
$
|
13,014
|
|
|
$
|
2,880
|
|
Binding Authorities
|
20,288
|
|
|
18,575
|
|
|
1,713
|
|
|||
Reinsurance
|
7,554
|
|
|
8,475
|
|
|
(921
|
)
|
|||
Accident and Health
|
8,184
|
|
|
9,212
|
|
|
(1,028
|
)
|
|||
Non-Marine Direct and Facultative
|
5,917
|
|
|
4,709
|
|
|
1,208
|
|
|||
Total
|
$
|
57,837
|
|
|
$
|
53,985
|
|
|
$
|
3,852
|
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Marine, Aviation and Transit
|
$
|
10,193
|
|
|
$
|
8,399
|
|
|
$
|
1,794
|
|
Binding Authorities
|
19,195
|
|
|
19,195
|
|
|
—
|
|
|||
Reinsurance
|
3,025
|
|
|
3,064
|
|
|
(39
|
)
|
|||
Accident and Health
|
4,146
|
|
|
3,919
|
|
|
227
|
|
|||
Non-Marine Direct and Facultative
|
5,811
|
|
|
4,176
|
|
|
1,635
|
|
|||
Total
|
$
|
42,370
|
|
|
$
|
38,753
|
|
|
$
|
3,617
|
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
Prior
Periods |
|
Current
Period |
|
Total
|
|
Prior
Periods |
|
Current
Period |
|
Total
|
||||||||||||
|
(in thousands of U.S. dollars)
|
||||||||||||||||||||||
Net losses paid
|
$
|
12,723
|
|
|
$
|
4,285
|
|
|
$
|
17,008
|
|
|
$
|
14,420
|
|
|
$
|
7,893
|
|
|
$
|
22,313
|
|
Net change in case and LAE reserves (1)
|
(3,034
|
)
|
|
3,173
|
|
|
139
|
|
|
(6,342
|
)
|
|
5,929
|
|
|
(413
|
)
|
||||||
Net change in IBNR reserves (2)
|
(9,315
|
)
|
|
20,446
|
|
|
11,131
|
|
|
(10,232
|
)
|
|
4,415
|
|
|
(5,817
|
)
|
||||||
Increase (reduction) in estimates of net ultimate losses
|
374
|
|
|
27,904
|
|
|
28,278
|
|
|
(2,154
|
)
|
|
18,237
|
|
|
16,083
|
|
||||||
Amortization of fair value adjustments
|
138
|
|
|
—
|
|
|
138
|
|
|
1,131
|
|
|
—
|
|
|
1,131
|
|
||||||
Net incurred losses and LAE
|
$
|
512
|
|
|
$
|
27,904
|
|
|
$
|
28,416
|
|
|
$
|
(1,023
|
)
|
|
$
|
18,237
|
|
|
$
|
17,214
|
|
|
Three Months Ended March 31, 2020
|
||||||||||
|
Atrium Net (25% of S609)
|
|
Noncontrolling Interests' Share
|
|
Enstar's share of Atrium
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Marine, Aviation and Transit
|
$
|
162
|
|
|
$
|
(66
|
)
|
|
$
|
96
|
|
Accident and Health
|
6,946
|
|
|
(2,848
|
)
|
|
4,098
|
|
|||
Non-Marine Direct and Facultative
|
1,470
|
|
|
(603
|
)
|
|
867
|
|
|||
COVID-19 net incurred losses and LAE
|
$
|
8,578
|
|
|
$
|
(3,517
|
)
|
|
$
|
5,061
|
|
•
|
StarStone Group: The repositioning of the underwriting portfolio has continued into 2020 with a focus on achieving underwriting profitability. StarStone has separated its book into "core lines" and "exited lines" to monitor performance during the repositioning phase. The exited lines represent segments or lines of business where new business has ceased and includes certain aerospace, casualty and property lines.
|
•
|
Intragroup reinsurance cessions: In partnership with StarStone's other shareholders, we have completed a number of transactions to provide strategic and capital support to StarStone in the form of capital contributions and reinsurances. The intragroup reinsurance cessions also impact comparability between periods. Refer to Note 3 - "Acquisitions" and Note 21 - "Related Party Transactions" to the consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2019 for further information. These reinsurance transactions between StarStone Group and other group entities are reflected within StarStone Intra-Group Cessions below (the "StarStone Intra-Group Cessions") and are eliminated upon consolidation.
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
StarStone Group
|
|
StarStone Intra-Group Cessions
|
|
StarStone Segment
|
|
StarStone Group
|
|
StarStone Intra-Group Cessions
|
|
StarStone Segment
|
||||||||||||
|
(in thousands of U.S. dollars)
|
||||||||||||||||||||||
Net premiums earned
|
$
|
189,791
|
|
|
$
|
8,369
|
|
|
$
|
198,160
|
|
|
$
|
175,382
|
|
|
$
|
37,880
|
|
|
$
|
213,262
|
|
Net incurred losses and LAE
|
(141,262
|
)
|
|
2,232
|
|
|
(139,030
|
)
|
|
(144,764
|
)
|
|
(50,288
|
)
|
|
(195,052
|
)
|
||||||
Acquisition costs
|
(42,668
|
)
|
|
(2,544
|
)
|
|
(45,212
|
)
|
|
(34,548
|
)
|
|
(17,111
|
)
|
|
(51,659
|
)
|
||||||
Operating expenses
|
(34,559
|
)
|
|
7
|
|
|
(34,552
|
)
|
|
(35,617
|
)
|
|
(377
|
)
|
|
(35,994
|
)
|
||||||
Underwriting income (loss)
|
(28,698
|
)
|
|
8,064
|
|
|
(20,634
|
)
|
|
(39,547
|
)
|
|
(29,896
|
)
|
|
(69,443
|
)
|
||||||
Net investment income
|
11,344
|
|
|
8
|
|
|
11,352
|
|
|
11,853
|
|
|
89
|
|
|
11,942
|
|
||||||
Net realized and unrealized gains (1)
|
(48,011
|
)
|
|
(6,075
|
)
|
|
(54,086
|
)
|
|
18,710
|
|
|
1,948
|
|
|
20,658
|
|
||||||
Other income
|
85
|
|
|
—
|
|
|
85
|
|
|
60
|
|
|
—
|
|
|
60
|
|
||||||
Corporate expenses
|
(574
|
)
|
|
—
|
|
|
(574
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Interest income (expenses)
|
(1,768
|
)
|
|
1,321
|
|
|
(447
|
)
|
|
(2,792
|
)
|
|
2,317
|
|
|
(475
|
)
|
||||||
Net foreign exchange (loss) gain
|
(1,855
|
)
|
|
1,265
|
|
|
(590
|
)
|
|
(242
|
)
|
|
(352
|
)
|
|
(594
|
)
|
||||||
EARNINGS (LOSS) BEFORE INCOME TAXES
|
(69,477
|
)
|
|
4,583
|
|
|
(64,894
|
)
|
|
(11,958
|
)
|
|
(25,894
|
)
|
|
(37,852
|
)
|
||||||
Income tax benefit (expense)
|
1,615
|
|
|
—
|
|
|
1,615
|
|
|
(1,259
|
)
|
|
—
|
|
|
(1,259
|
)
|
||||||
Earnings from equity method investments
|
—
|
|
|
—
|
|
|
—
|
|
|
188
|
|
|
—
|
|
|
188
|
|
||||||
NET EARNINGS (LOSS)
|
(67,862
|
)
|
|
4,583
|
|
|
(63,279
|
)
|
|
(13,029
|
)
|
|
(25,894
|
)
|
|
(38,923
|
)
|
||||||
Net loss (earnings) attributable to noncontrolling interest
|
27,262
|
|
|
(495
|
)
|
|
26,767
|
|
|
5,346
|
|
|
2,576
|
|
|
7,922
|
|
||||||
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS
|
$
|
(40,600
|
)
|
|
$
|
4,088
|
|
|
$
|
(36,512
|
)
|
|
$
|
(7,683
|
)
|
|
$
|
(23,318
|
)
|
|
$
|
(31,001
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Underwriting ratios(2):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss ratio
|
74.4
|
%
|
|
(26.7
|
)%
|
|
70.2
|
%
|
|
82.5
|
%
|
|
132.8
|
%
|
|
91.5
|
%
|
||||||
Acquisition cost ratio
|
22.5
|
%
|
|
30.4
|
%
|
|
22.8
|
%
|
|
19.7
|
%
|
|
45.2
|
%
|
|
24.2
|
%
|
||||||
Operating expense ratio
|
18.2
|
%
|
|
(0.1
|
)%
|
|
17.4
|
%
|
|
20.3
|
%
|
|
1.0
|
%
|
|
16.9
|
%
|
||||||
Combined ratio
|
115.1
|
%
|
|
3.6
|
%
|
|
110.4
|
%
|
|
122.5
|
%
|
|
178.9
|
%
|
|
132.6
|
%
|
(1)
|
Many insurance companies predominantly use AFS accounting where unrealized amounts are recorded directly to shareholders’ equity and therefore do not impact earnings. Unrealized amounts would only become realizable in the event of a sale of the specific securities prior to maturity or a credit default. We have historically utilized trading accounting, where unrealized amounts are reflected in earnings. However, from October 1, 2019 we have been electing to use AFS accounting for all new acquisitions and, where permissible, as trading fixed maturity securities mature, we are reinvesting the proceeds into AFS securities for the StarStone segment.
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
Core Lines
|
|
Exited Lines
|
|
StarStone Group
|
|
Core Lines
|
|
Exited Lines
|
|
StarStone Group
|
||||||||||||
|
(in thousands of U.S. dollars)
|
||||||||||||||||||||||
Net premiums earned
|
$
|
183,403
|
|
|
$
|
6,388
|
|
|
$
|
189,791
|
|
|
$
|
136,540
|
|
|
$
|
38,842
|
|
|
$
|
175,382
|
|
Net incurred losses and LAE
|
(141,764
|
)
|
|
502
|
|
|
(141,262
|
)
|
|
(92,011
|
)
|
|
(52,753
|
)
|
|
(144,764
|
)
|
||||||
Acquisition costs
|
(40,152
|
)
|
|
(2,516
|
)
|
|
(42,668
|
)
|
|
(27,430
|
)
|
|
(7,118
|
)
|
|
(34,548
|
)
|
||||||
Operating expenses
|
(32,310
|
)
|
|
(2,249
|
)
|
|
(34,559
|
)
|
|
(25,519
|
)
|
|
(10,098
|
)
|
|
(35,617
|
)
|
||||||
Underwriting income (loss)
|
$
|
(30,823
|
)
|
|
$
|
2,125
|
|
|
$
|
(28,698
|
)
|
|
$
|
(8,420
|
)
|
|
$
|
(31,127
|
)
|
|
$
|
(39,547
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Underwriting ratios(1):
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loss ratio
|
77.3
|
%
|
|
(7.9
|
)%
|
|
74.4
|
%
|
|
67.4
|
%
|
|
135.8
|
%
|
|
82.5
|
%
|
||||||
Acquisition cost ratio
|
21.9
|
%
|
|
39.4
|
%
|
|
22.5
|
%
|
|
20.1
|
%
|
|
18.3
|
%
|
|
19.7
|
%
|
||||||
Operating expense ratio
|
17.6
|
%
|
|
35.2
|
%
|
|
18.2
|
%
|
|
18.7
|
%
|
|
26.0
|
%
|
|
20.3
|
%
|
||||||
Combined ratio
|
116.8
|
%
|
|
66.7
|
%
|
|
115.1
|
%
|
|
106.2
|
%
|
|
180.1
|
%
|
|
122.5
|
%
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Casualty
|
$
|
113,668
|
|
|
$
|
95,405
|
|
|
$
|
18,263
|
|
Marine
|
75,920
|
|
|
88,541
|
|
|
(12,621
|
)
|
|||
Property
|
26,873
|
|
|
28,153
|
|
|
(1,280
|
)
|
|||
Aerospace
|
25,280
|
|
|
9,112
|
|
|
16,168
|
|
|||
Workers' Compensation
|
38,113
|
|
|
30,162
|
|
|
7,951
|
|
|||
Total
|
$
|
279,854
|
|
|
$
|
251,373
|
|
|
$
|
28,481
|
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Casualty
|
$
|
94,511
|
|
|
$
|
81,717
|
|
|
$
|
12,794
|
|
Marine
|
46,833
|
|
|
56,753
|
|
|
(9,920
|
)
|
|||
Property
|
24,470
|
|
|
44,339
|
|
|
(19,869
|
)
|
|||
Aerospace
|
7,914
|
|
|
13,520
|
|
|
(5,606
|
)
|
|||
Workers' Compensation
|
24,432
|
|
|
16,933
|
|
|
7,499
|
|
|||
Total
|
$
|
198,160
|
|
|
$
|
213,262
|
|
|
$
|
(15,102
|
)
|
|
Three Months Ended March 31,
|
||||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
|
Prior
Periods |
|
Current
Period |
|
Total
|
|
Prior
Periods |
|
Current
Period |
|
Total
|
||||||||||||
|
(in thousands of U.S. dollars)
|
||||||||||||||||||||||
Net losses paid
|
$
|
105,527
|
|
|
$
|
1,027
|
|
|
$
|
106,554
|
|
|
$
|
113,625
|
|
|
$
|
1,792
|
|
|
$
|
115,417
|
|
Net change in case and LAE reserves (1)
|
(48,693
|
)
|
|
5,501
|
|
|
(43,192
|
)
|
|
(8,824
|
)
|
|
10,880
|
|
|
2,056
|
|
||||||
Net change in IBNR reserves (2)
|
(57,969
|
)
|
|
133,231
|
|
|
75,262
|
|
|
(52,834
|
)
|
|
129,258
|
|
|
76,424
|
|
||||||
Increase (reduction) in estimates of net ultimate losses
|
(1,135
|
)
|
|
139,759
|
|
|
138,624
|
|
|
51,967
|
|
|
141,930
|
|
|
193,897
|
|
||||||
Increase (reduction) in provisions for unallocated LAE
|
(1,605
|
)
|
|
2,346
|
|
|
741
|
|
|
(1,672
|
)
|
|
3,020
|
|
|
1,348
|
|
||||||
Amortization of fair value adjustments
|
(335
|
)
|
|
—
|
|
|
(335
|
)
|
|
(193
|
)
|
|
—
|
|
|
(193
|
)
|
||||||
Net incurred losses and LAE
|
$
|
(3,075
|
)
|
|
$
|
142,105
|
|
|
$
|
139,030
|
|
|
$
|
50,102
|
|
|
$
|
144,950
|
|
|
$
|
195,052
|
|
|
Three Months Ended March 31, 2020
|
||||||||||
|
StarStone Net (Segment Level)
|
|
Noncontrolling Interests' Share
|
|
Enstar's share of StarStone
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Casualty
|
$
|
14,350
|
|
|
$
|
(5,883
|
)
|
|
$
|
8,467
|
|
Marine
|
8,600
|
|
|
(3,526
|
)
|
|
5,074
|
|
|||
Property
|
9,100
|
|
|
(0.451
|
)
|
|
8,649
|
|
|||
COVID-19 net incurred losses and LAE
|
$
|
32,050
|
|
|
$
|
(9,860
|
)
|
|
$
|
22,190
|
|
|
Three Months Ended
|
|
|
||||||||
|
March 31,
|
|
|
||||||||
|
2020
|
|
2019
|
|
Change
|
||||||
|
(in thousands of U.S. dollars)
|
||||||||||
Net premiums earned
|
$
|
3,337
|
|
|
$
|
6,598
|
|
|
$
|
(3,261
|
)
|
Net incurred losses and LAE
|
(2,482
|
)
|
|
(4,956
|
)
|
|
2,474
|
|
|||
Life and Annuity Policy Benefits
|
—
|
|
|
(96
|
)
|
|
96
|
|
|||
Acquisition costs
|
(83
|
)
|
|
(232
|
)
|
|
149
|
|
|||
Underwriting income
|
772
|
|
|
1,314
|
|
|
(542
|
)
|
|||
Net investment losses
|
(2,488
|
)
|
|
(1,685
|
)
|
|
(803
|
)
|
|||
Net realized and unrealized gains
|
—
|
|
|
1,034
|
|
|
(1,034
|
)
|
|||
Other income (losses)
|
(1,971
|
)
|
|
212
|
|
|
(2,183
|
)
|
|||
Corporate expenses
|
(16,040
|
)
|
|
(8,697
|
)
|
|
(7,343
|
)
|
|||
Interest Income
|
2,931
|
|
|
1,555
|
|
|
1,376
|
|
|||
Net foreign exchange losses
|
—
|
|
|
1
|
|
|
(1
|
)
|
|||
LOSS BEFORE INCOME TAXES
|
(16,796
|
)
|
|
(6,266
|
)
|
|
(10,530
|
)
|
|||
Income tax expense
|
—
|
|
|
(85
|
)
|
|
85
|
|
|||
NET LOSS ATTRIBUTABLE TO ENSTAR
|
(16,796
|
)
|
|
(6,351
|
)
|
|
(10,445
|
)
|
|||
Dividends on preferred shares
|
(8,925
|
)
|
|
(9,139
|
)
|
|
214
|
|
|||
NET LOSS ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS
|
$
|
(25,721
|
)
|
|
$
|
(15,490
|
)
|
|
$
|
(10,231
|
)
|
|
|
March 31, 2020
|
||||||||||||||||||
|
|
Non-life
Run-off
|
|
Atrium
|
|
StarStone
|
|
Other
|
|
Total
|
||||||||||
|
|
(in thousands of U.S. dollars)
|
||||||||||||||||||
Short-term investments, trading, at fair value
|
|
$
|
15,847
|
|
|
$
|
2,402
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,249
|
|
Short-term investments, AFS, at fair value
|
|
129,085
|
|
|
—
|
|
|
9,815
|
|
|
—
|
|
|
138,900
|
|
|||||
Fixed maturities, trading, at fair value
|
|
4,777,306
|
|
|
158,763
|
|
|
708,750
|
|
|
—
|
|
|
5,644,819
|
|
|||||
Fixed maturities, AFS, at fair value
|
|
1,573,146
|
|
|
14,858
|
|
|
552,169
|
|
|
—
|
|
|
2,140,173
|
|
|||||
Funds held - directly managed
|
|
1,134,921
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,134,921
|
|
|||||
Equities, at fair value
|
|
510,580
|
|
|
20,795
|
|
|
110,475
|
|
|
—
|
|
|
641,850
|
|
|||||
Other investments, at fair value
|
|
2,241,853
|
|
|
6,016
|
|
|
79,115
|
|
|
—
|
|
|
2,326,984
|
|
|||||
Equity method investments
|
|
337,474
|
|
|
—
|
|
|
|
|
—
|
|
|
337,474
|
|
||||||
Total investments
|
|
10,720,212
|
|
|
202,834
|
|
|
1,460,324
|
|
|
—
|
|
|
12,383,370
|
|
|||||
Cash and cash equivalents (including restricted cash)
|
|
811,365
|
|
|
52,408
|
|
|
293,294
|
|
|
3,908
|
|
|
1,160,975
|
|
|||||
Funds held by reinsured companies
|
|
759,494
|
|
|
26,887
|
|
|
32,337
|
|
|
8,664
|
|
|
827,382
|
|
|||||
Total investable assets
|
|
$
|
12,291,071
|
|
|
$
|
282,129
|
|
|
$
|
1,785,955
|
|
|
$
|
12,572
|
|
|
$
|
14,371,727
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Duration (in years) (1)
|
|
4.96
|
|
|
2.13
|
|
|
2.66
|
|
|
0.00
|
|
|
4.54
|
|
|||||
Average credit rating (2)
|
|
A+
|
|
|
AA-
|
|
|
AA-
|
|
|
AAA
|
|
|
A+
|
|
|
|
December 31, 2019
|
||||||||||||||||||
|
|
Non-life
Run-off
|
|
Atrium
|
|
StarStone
|
|
Other
|
|
Total
|
||||||||||
|
|
(in thousands of U.S. dollars)
|
||||||||||||||||||
Short-term investments, trading, at fair value
|
|
$
|
50,268
|
|
|
$
|
1,222
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
51,490
|
|
Short-term investments, AFS, at fair value
|
|
121,780
|
|
|
—
|
|
|
6,555
|
|
|
—
|
|
|
128,335
|
|
|||||
Fixed maturities, trading, at fair value
|
|
5,378,533
|
|
|
155,510
|
|
|
812,286
|
|
|
—
|
|
|
6,346,329
|
|
|||||
Fixed maturities, AFS, at fair value
|
|
1,446,912
|
|
|
15,310
|
|
|
451,167
|
|
|
—
|
|
|
1,913,389
|
|
|||||
Funds held - directly managed
|
|
1,187,552
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,187,552
|
|
|||||
Equities, at fair value
|
|
576,893
|
|
|
22,079
|
|
|
130,749
|
|
|
—
|
|
|
729,721
|
|
|||||
Other investments, at fair value
|
|
2,386,776
|
|
|
7,417
|
|
|
130,227
|
|
|
—
|
|
|
2,524,420
|
|
|||||
Equity method investments
|
|
326,277
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
326,277
|
|
|||||
Total investments
|
|
11,474,991
|
|
|
201,538
|
|
|
1,530,984
|
|
|
—
|
|
|
13,207,513
|
|
|||||
Cash and cash equivalents (including restricted cash)
|
|
666,705
|
|
|
58,369
|
|
|
326,136
|
|
|
4,567
|
|
|
1,055,777
|
|
|||||
Funds held by reinsured companies
|
|
336,470
|
|
|
27,451
|
|
|
36,194
|
|
|
8,620
|
|
|
408,735
|
|
|||||
Total investable assets
|
|
$
|
12,478,166
|
|
|
$
|
287,358
|
|
|
$
|
1,893,314
|
|
|
$
|
13,187
|
|
|
$
|
14,672,025
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Duration (in years) (1)
|
|
5.24
|
|
|
1.86
|
|
|
2.53
|
|
|
0.00
|
|
|
4.76
|
|
|||||
Average credit rating (2)
|
|
A+
|
|
|
AA-
|
|
|
A+
|
|
|
AAA
|
|
|
A+
|
|
|
|
|
|
|
|
Gross Unrealized Losses
|
|
|
||||||||||||
As of March 31, 2020
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Non-Credit Related Losses
|
|
Allowance for Credit Losses(1)
|
|
Fair Value
|
||||||||||
U.S. government and agency
|
|
$
|
230,450
|
|
|
$
|
7,783
|
|
|
$
|
(14
|
)
|
|
$
|
—
|
|
|
$
|
238,219
|
|
U.K. government
|
|
33,953
|
|
|
—
|
|
|
(1,043
|
)
|
|
—
|
|
|
32,910
|
|
|||||
Other government
|
|
84,302
|
|
|
1,416
|
|
|
(2,377
|
)
|
|
—
|
|
|
83,341
|
|
|||||
Corporate
|
|
1,374,000
|
|
|
5,680
|
|
|
(30,844
|
)
|
|
(16,270
|
)
|
|
1,332,566
|
|
|||||
Municipal
|
|
16,799
|
|
|
250
|
|
|
(3
|
)
|
|
—
|
|
|
17,046
|
|
|||||
Residential mortgage-backed
|
|
153,268
|
|
|
2,943
|
|
|
(1,184
|
)
|
|
—
|
|
|
155,027
|
|
|||||
Commercial mortgage-backed
|
|
137,641
|
|
|
744
|
|
|
(7,506
|
)
|
|
(1
|
)
|
|
130,878
|
|
|||||
Asset-backed
|
|
312,169
|
|
|
195
|
|
|
(23,278
|
)
|
|
—
|
|
|
289,086
|
|
|||||
|
|
$
|
2,342,582
|
|
|
$
|
19,011
|
|
|
$
|
(66,249
|
)
|
|
$
|
(16,271
|
)
|
|
$
|
2,279,073
|
|
As of December 31, 2019
|
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
(Non-OTTI)
|
|
Fair Value
|
||||||||
U.S. government and agency
|
|
$
|
410,842
|
|
|
$
|
77
|
|
|
$
|
(607
|
)
|
|
$
|
410,312
|
|
U.K. government
|
|
15,067
|
|
|
282
|
|
|
—
|
|
|
15,349
|
|
||||
Other government
|
|
84,116
|
|
|
1,119
|
|
|
(88
|
)
|
|
85,147
|
|
||||
Corporate
|
|
1,081,713
|
|
|
4,026
|
|
|
(4,568
|
)
|
|
1,081,171
|
|
||||
Municipal
|
|
15,963
|
|
|
20
|
|
|
(111
|
)
|
|
15,872
|
|
||||
Residential mortgage-backed
|
|
127,704
|
|
|
240
|
|
|
(725
|
)
|
|
127,219
|
|
||||
Commercial mortgage-backed
|
|
98,928
|
|
|
38
|
|
|
(409
|
)
|
|
98,557
|
|
||||
Asset-backed
|
|
208,121
|
|
|
169
|
|
|
(193
|
)
|
|
208,097
|
|
||||
|
|
$
|
2,042,454
|
|
|
$
|
5,971
|
|
|
$
|
(6,701
|
)
|
|
$
|
2,041,724
|
|
|
Fair Value
|
|
Average Credit Rating
|
||
|
(in thousands of U.S. dollars)
|
|
|
||
JPMorgan Chase & Co
|
$
|
113,555
|
|
|
A
|
Citigroup Inc
|
103,799
|
|
|
A-
|
|
Morgan Stanley
|
103,030
|
|
|
A-
|
|
Bank of America Corp
|
101,697
|
|
|
A
|
|
Apple Inc
|
95,761
|
|
|
AA+
|
|
Wells Fargo & Co
|
83,174
|
|
|
A
|
|
Comcast Corp
|
74,609
|
|
|
A-
|
|
Oracle Corp
|
56,810
|
|
|
A-
|
|
Walmart Inc
|
56,240
|
|
|
AA
|
|
HSBC Holdings PLC
|
53,738
|
|
|
A
|
|
|
$
|
842,413
|
|
|
|
|
|
Three Months Ended March 31, 2019
|
||||||||||||||||||
|
|
Non-life
Run-off
|
|
Atrium
|
|
StarStone
|
|
Other
|
|
Total
|
||||||||||
|
|
(in thousands of U.S. dollars)
|
||||||||||||||||||
Net investment income:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturities and cash and cash equivalents
|
|
$
|
64,249
|
|
|
$
|
1,467
|
|
|
$
|
11,382
|
|
|
$
|
380
|
|
|
$
|
77,478
|
|
Equity securities
|
|
2,878
|
|
|
15
|
|
|
487
|
|
|
—
|
|
|
3,380
|
|
|||||
Other investments and other
|
|
3,054
|
|
|
297
|
|
|
784
|
|
|
(2,021
|
)
|
|
2,114
|
|
|||||
Gross investment income
|
|
70,181
|
|
|
1,779
|
|
|
12,653
|
|
|
(1,641
|
)
|
|
82,972
|
|
|||||
Investment expenses
|
|
(3,453
|
)
|
|
(68
|
)
|
|
(711
|
)
|
|
(44
|
)
|
|
(4,276
|
)
|
|||||
Net investment income (expense)
|
|
$
|
66,728
|
|
|
$
|
1,711
|
|
|
$
|
11,942
|
|
|
$
|
(1,685
|
)
|
|
$
|
78,696
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net realized and unrealized gains and losses:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fixed maturity securities
|
|
$
|
222,277
|
|
|
$
|
2,130
|
|
|
$
|
21,808
|
|
|
$
|
(64
|
)
|
|
$
|
246,151
|
|
Equity securities
|
|
11,798
|
|
|
356
|
|
|
(2,223
|
)
|
|
—
|
|
|
9,931
|
|
|||||
Other investments
|
|
202,111
|
|
|
427
|
|
|
1,073
|
|
|
1,098
|
|
|
204,709
|
|
|||||
Net realized and unrealized gains (losses)
|
|
$
|
436,186
|
|
|
$
|
2,913
|
|
|
$
|
20,658
|
|
|
$
|
1,034
|
|
|
$
|
460,791
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Annualized income from cash and fixed maturities
|
|
$
|
256,996
|
|
|
$
|
5,868
|
|
|
$
|
45,528
|
|
|
$
|
1,520
|
|
|
$
|
309,912
|
|
Average aggregate fixed maturities and cash and cash equivalents, at cost (1)
|
|
8,460,668
|
|
|
260,350
|
|
|
1,664,717
|
|
|
158,239
|
|
|
10,543,974
|
|
|||||
Annualized Investment Book Yield
|
|
3.04
|
%
|
|
2.25
|
%
|
|
2.73
|
%
|
|
0.96
|
%
|
|
2.94
|
%
|
|||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total financial statement return (2)
|
|
$
|
502,914
|
|
|
$
|
4,624
|
|
|
$
|
32,600
|
|
|
$
|
(651
|
)
|
|
$
|
539,487
|
|
Average aggregate invested assets, at fair value (1)
|
|
10,739,085
|
|
|
268,250
|
|
|
1,798,585
|
|
|
173,807
|
|
|
12,979,727
|
|
|||||
Financial Statement Portfolio Return
|
|
4.68
|
%
|
|
1.72
|
%
|
|
1.81
|
%
|
|
(0.37
|
)%
|
|
4.16
|
%
|
•
|
Net realized and unrealized losses on fixed income securities, including fixed income securities within our funds held portfolios, of $283.4 million for the three months ended March 31, 2020, compared to gains of $246.2 million for the three months ended March 31, 2019, a decrease of $529.5 million. Losses in the current period were primarily attributable to a decrease in the valuation of our fixed maturity investments due to a widening in investment grade and high yield credit spreads, which was partially offset by declining interest rates due to the recent disruption in global financial markets associated with the COVID-19 pandemic. Gains in the prior period were primarily attributable to higher valuations of our fixed maturity investments due to declining interest rates and tightening credit spreads.
|
•
|
Net realized and unrealized losses on equity securities of $93.0 million for the three months ended March 31, 2020, compared to gains of $9.9 million for the three months ended March 31, 2019, a decrease of $103.0 million. Losses in the current period were primarily the result of significant volatility in global financial markets associated with the COVID-19 pandemic. Gains in the prior period were primarily driven by favorable movements in global equity markets.
|
•
|
Net realized and unrealized losses on other investments of $258.1 million for the three months ended March 31, 2020, compared to gains of $204.7 million for the three months ended March 31, 2019, representing a decrease of $462.8 million. Losses in the current period primarily comprised unrealized losses in our equity funds, hedge funds, fixed income funds, CLO equities and CLO equity funds due to the recent disruption in global financial markets associated with the COVID-19 pandemic. Given the unique circumstances of the COVID-19 pandemic, we have recorded an estimate of losses for certain other investments that are typically reported on a lag basis. For further information on investment valuation methodologies, refer to Note 10 - "Fair Value Measurements" to our unaudited condensed consolidated financial statements included within Item 1 of this Quarterly Report on Form 10-Q. Prior period gains primarily comprised unrealized gains in our hedge funds, equity funds, fixed income funds and private equity funds, principally driven by tightening credit spreads and favorable movement in international equity markets in 2019.
|
|
|
March 31,
2020 |
|
December 31,
2019 |
|
Change
|
||||||
|
|
(in thousands of U.S. dollars)
|
||||||||||
Ordinary shareholders' equity
|
|
$
|
3,766,599
|
|
|
$
|
4,332,183
|
|
|
$
|
(565,584
|
)
|
Series D and E Preferred Shares
|
|
510,000
|
|
|
510,000
|
|
|
—
|
|
|||
Total Enstar Shareholders' Equity (A)
|
|
4,276,599
|
|
|
4,842,183
|
|
|
(565,584
|
)
|
|||
Noncontrolling interest
|
|
13,405
|
|
|
14,168
|
|
|
(763
|
)
|
|||
Total Shareholders' Equity (B)
|
|
4,290,004
|
|
|
4,856,351
|
|
|
(566,347
|
)
|
|||
|
|
|
|
|
|
|
||||||
Senior Notes
|
|
842,437
|
|
|
842,216
|
|
|
221
|
|
|||
Revolving credit facility
|
|
350,000
|
|
|
—
|
|
|
350,000
|
|
|||
Term loan facility
|
|
349,117
|
|
|
348,991
|
|
|
126
|
|
|||
Total debt (C)
|
|
1,541,554
|
|
|
1,191,207
|
|
|
350,347
|
|
|||
|
|
|
|
|
|
|
||||||
Redeemable noncontrolling interest (D)
|
|
392,773
|
|
|
438,791
|
|
|
(46,018
|
)
|
|||
|
|
|
|
|
|
|
||||||
Total capitalization = (B) + (C) + (D)
|
|
$
|
6,224,331
|
|
|
$
|
6,486,349
|
|
|
$
|
(262,018
|
)
|
|
|
|
|
|
|
|
||||||
Total capitalization attributable to Enstar = (A) + (C)
|
|
$
|
5,818,153
|
|
|
$
|
6,033,390
|
|
|
$
|
(215,237
|
)
|
|
|
|
|
|
|
|
||||||
Debt to total capitalization
|
|
24.8
|
%
|
|
18.4
|
%
|
|
6.4
|
%
|
|||
Debt and Series D and E Preferred Shares to total capitalization
|
|
33.0
|
%
|
|
26.2
|
%
|
|
6.8
|
%
|
|||
|
|
|
|
|
|
|
||||||
Debt to total capitalization attributable to Enstar
|
|
26.5
|
%
|
|
19.7
|
%
|
|
6.8
|
%
|
|||
Debt and Series D and E Preferred Shares to total capitalization available to Enstar
|
|
35.3
|
%
|
|
28.2
|
%
|
|
7.1
|
%
|
|
|
Three Months Ended March 31,
|
|
|
||||||||
|
|
2020
|
|
2019
|
|
Change
|
||||||
|
|
(in thousands of U.S. dollars)
|
||||||||||
Cash provided by (used in):
|
|
|
|
|
|
|
||||||
Operating activities
|
|
$
|
158,112
|
|
|
$
|
107,138
|
|
|
$
|
50,974
|
|
Investing activities
|
|
(388,180
|
)
|
|
(173,007
|
)
|
|
(215,173
|
)
|
|||
Financing activities
|
|
328,549
|
|
|
232,861
|
|
|
95,688
|
|
|||
Effect of exchange rate changes on cash
|
|
6,717
|
|
|
(3,925
|
)
|
|
10,642
|
|
|||
Net increase in cash and cash equivalents
|
|
105,198
|
|
|
163,067
|
|
|
(57,869
|
)
|
|||
Cash and cash equivalents, beginning of period
|
|
1,055,777
|
|
|
982,584
|
|
|
73,193
|
|
|||
Cash and cash equivalents, end of period
|
|
$
|
1,160,975
|
|
|
$
|
1,145,651
|
|
|
$
|
15,324
|
|
Facility
|
|
Origination Date
|
|
Term
|
|
March 31,
2020 |
|
December 31,
2019 |
||||
4.50% Senior Notes due 2022
|
|
March 10, 2017
|
|
5 years
|
|
$
|
348,794
|
|
|
$
|
348,616
|
|
4.95% Senior Notes due 2029
|
|
May 28, 2019
|
|
10 years
|
|
493,643
|
|
|
493,600
|
|
||
Total Senior Notes
|
|
|
|
|
|
842,437
|
|
|
842,216
|
|
||
EGL Revolving Credit Facility
|
|
August 16, 2018
|
|
5 years
|
|
350,000
|
|
|
—
|
|
||
2018 EGL Term Loan Facility
|
|
December 27, 2018
|
|
3 years
|
|
349,117
|
|
|
348,991
|
|
||
Total debt obligations
|
|
|
|
$
|
1,541,554
|
|
|
$
|
1,191,207
|
|
|
Total
|
|
Less than or equal to 1 year
|
|
More than 1 year - less than or equal to 3 years
|
|
More than 3 years - less than or equal to 5 years
|
|
More than 5 years - less than or equal to 10 years
|
|
More than
10 years |
||||||||||||
|
(in millions of U.S. dollars)
|
||||||||||||||||||||||
Operating Activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Estimated gross reserves for losses and LAE (1)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Asbestos
|
$
|
1,846.5
|
|
|
$
|
161.2
|
|
|
$
|
278.1
|
|
|
$
|
228.8
|
|
|
$
|
364.4
|
|
|
$
|
814.0
|
|
Environmental
|
342.3
|
|
|
38.3
|
|
|
65.9
|
|
|
52.9
|
|
|
75.5
|
|
|
109.7
|
|
||||||
General Casualty
|
922.5
|
|
|
197.7
|
|
|
240.9
|
|
|
188.4
|
|
|
185.9
|
|
|
109.6
|
|
||||||
Workers' compensation/personal accident
|
2,191.1
|
|
|
182.6
|
|
|
295.3
|
|
|
349.0
|
|
|
491.7
|
|
|
872.5
|
|
||||||
Marine, aviation and transit
|
396.2
|
|
|
120.8
|
|
|
124.9
|
|
|
57.7
|
|
|
49.9
|
|
|
42.9
|
|
||||||
Construction defect
|
118.5
|
|
|
32.5
|
|
|
42.8
|
|
|
21.1
|
|
|
12.9
|
|
|
9.2
|
|
||||||
Professional indemnity/ Directors & Officers
|
864.4
|
|
|
213.0
|
|
|
270.9
|
|
|
141.0
|
|
|
130.9
|
|
|
108.6
|
|
||||||
Motor
|
1,093.1
|
|
|
289.8
|
|
|
337.9
|
|
|
177.9
|
|
|
145.1
|
|
|
142.4
|
|
||||||
Property
|
177.3
|
|
|
72.7
|
|
|
58.9
|
|
|
22.2
|
|
|
14.1
|
|
|
9.4
|
|
||||||
Other
|
378.3
|
|
|
103.5
|
|
|
81.3
|
|
|
50.1
|
|
|
60.7
|
|
|
82.7
|
|
||||||
Total Non-Life Run-off
|
8,330.2
|
|
|
1,412.1
|
|
|
1,796.9
|
|
|
1,289.1
|
|
|
1,531.1
|
|
|
2,301.0
|
|
||||||
Atrium
|
237.4
|
|
|
93.3
|
|
|
86.2
|
|
|
34.8
|
|
|
19.3
|
|
|
3.8
|
|
||||||
StarStone
|
1,918.3
|
|
|
664.4
|
|
|
690.3
|
|
|
283.4
|
|
|
199.6
|
|
|
80.6
|
|
||||||
Other
|
22.5
|
|
|
5.5
|
|
|
7.3
|
|
|
2.9
|
|
|
6.8
|
|
|
—
|
|
||||||
ULAE
|
353.8
|
|
|
63.2
|
|
|
80.6
|
|
|
51.5
|
|
|
60.8
|
|
|
97.7
|
|
||||||
Estimated gross reserves for losses and LAE (1)
|
10,862.2
|
|
|
2,238.5
|
|
|
2,661.3
|
|
|
1,661.7
|
|
|
1,817.6
|
|
|
2,483.1
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating lease obligations(2)
|
53.1
|
|
|
13.4
|
|
|
17.1
|
|
|
11.5
|
|
|
9.1
|
|
|
2.0
|
|
||||||
Investing Activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment commitments to private equity funds
|
773.6
|
|
|
330.1
|
|
|
320.8
|
|
|
94.2
|
|
|
28.5
|
|
|
—
|
|
||||||
Investment commitments to equity method investments
|
110.5
|
|
|
110.5
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Financing Activities
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Loan repayments (including estimated interest payments)
|
1,866.5
|
|
|
60.6
|
|
|
792.0
|
|
|
402.5
|
|
|
611.4
|
|
|
—
|
|
||||||
Total
|
$
|
13,665.9
|
|
|
$
|
2,753.1
|
|
|
$
|
3,791.2
|
|
|
$
|
2,169.9
|
|
|
$
|
2,466.6
|
|
|
$
|
2,485.1
|
|
(1)
|
The reserves for losses and LAE represent management’s estimate of the ultimate cost of settling losses. The estimation of losses is based on various complex and subjective judgments. Actual losses paid may differ, perhaps significantly, from the reserve estimates reflected in our financial statements. Similarly, the timing of payment of our estimated losses is not fixed and there may be significant changes in actual payment activity. The assumptions used in estimating the likely payments due by period are based on our historical claims payment experience and industry payment patterns, but due to the inherent uncertainty in the process of estimating the timing of such payments, there is a risk that the amounts paid in any such period can be significantly different from the amounts disclosed above. The amounts in the above table represent our estimates of known liabilities as of March 31, 2020 and do not take into account corresponding reinsurance balance recoverable amounts that would be due to us. Furthermore, certain of the reserves included in the unaudited condensed consolidated financial statements as of March 31, 2020 were acquired by us and initially recorded at fair value with subsequent amortization, whereas the expected payments by period in the table above are the estimated payments at a future time and do not reflect the fair value adjustment in the amount payable.
|
•
|
risks associated with implementing our business strategies and initiatives;
|
•
|
the adequacy of our loss reserves and the need to adjust such reserves as claims develop over time;
|
•
|
risks relating to our acquisitions, including our ability to evaluate opportunities, successfully price acquisitions, address operational challenges, support our planned growth and assimilate acquired companies into our internal control system in order to maintain effective internal controls, provide reliable financial reports and prevent fraud;
|
•
|
risks relating to our active underwriting businesses, including unpredictability and severity of catastrophic and other major loss events, failure of risk management and loss limitation methods, the risk of a ratings downgrade or withdrawal, and cyclicality of demand and pricing in the insurance and reinsurance markets;
|
•
|
risks relating to the performance of our investment portfolio and our ability to structure our investments in a manner that recognizes our liquidity needs;
|
•
|
changes and uncertainty in economic conditions, including interest rates, inflation, currency exchange rates, equity markets and credit conditions, which could affect our investment portfolio, our ability to finance future acquisitions and our profitability;
|
•
|
risks relating to the evolving COVID-19 global pandemic and the significant disruption and economic and financial turmoil that has taken place as a result of government measures to protect public health;
|
•
|
the risk that ongoing or future industry regulatory developments will disrupt our business, affect the ability of our subsidiaries to operate in the ordinary course or to make distributions to us, or mandate changes in industry practices in ways that increase our costs, decrease our revenues or require us to alter aspects of the way we do business;
|
•
|
risks relating to the variability of statutory capital requirements and the risk that we may require additional capital in the future, which may not be available or may be available only on unfavorable terms;
|
•
|
risks relating to the availability and collectability of our reinsurance;
|
•
|
losses due to foreign currency exchange rate fluctuations;
|
•
|
increased competitive pressures, including the consolidation and increased globalization of reinsurance providers;
|
•
|
emerging claim and coverage issues;
|
•
|
lengthy and unpredictable litigation affecting the assessment of losses and/or coverage issues;
|
•
|
loss of key personnel;
|
•
|
the ability of our subsidiaries to distribute funds to us and the resulting impact on our liquidity;
|
•
|
our ability to comply with covenants in our debt agreements;
|
•
|
changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at management’s discretion;
|
•
|
operational risks, including system, data security or human failures and external hazards;
|
•
|
risks relating to our ability to obtain regulatory approvals, including the timing, terms and conditions of any such approvals, and to satisfy other closing conditions in connection with our acquisition agreements, which could affect our ability to complete acquisitions;
|
•
|
risks relating to our subsidiaries with liabilities arising from legacy manufacturing operations;
|
•
|
tax, regulatory or legal restrictions or limitations applicable to us or the insurance and reinsurance business generally;
|
•
|
changes in tax laws or regulations applicable to us or our subsidiaries, or the risk that we or one of our non-U.S. subsidiaries become subject to significant, or significantly increased, income taxes in the United States or elsewhere;
|
•
|
changes in Bermuda law or regulation or the political stability of Bermuda; and
|
•
|
changes in accounting policies or practices.
|
|
|
Interest Rate Shift in Basis Points
|
||||||||||||||||||
As of March 31, 2020
|
|
-100
|
|
-50
|
|
—
|
|
+50
|
|
+100
|
||||||||||
|
|
(in millions of U.S. dollars)
|
||||||||||||||||||
Total Market Value
|
|
$
|
10,099
|
|
|
$
|
9,856
|
|
|
$
|
9,618
|
|
|
$
|
9,380
|
|
|
$
|
9,164
|
|
Market Value Change from Base
|
|
5.0
|
%
|
|
2.5
|
%
|
|
—
|
|
|
(2.5
|
)%
|
|
(4.7
|
)%
|
|||||
Change in Unrealized Value
|
|
$
|
481
|
|
|
$
|
238
|
|
|
$
|
—
|
|
|
$
|
(238
|
)
|
|
$
|
(454
|
)
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
As of December 31, 2019
|
|
-100
|
|
-50
|
|
—
|
|
+50
|
|
+100
|
||||||||||
Total Market Value
|
|
$
|
10,757
|
|
|
$
|
10,490
|
|
|
$
|
10,227
|
|
|
$
|
9,976
|
|
|
$
|
9,736
|
|
Market Value Change from Base
|
|
5.2
|
%
|
|
2.6
|
%
|
|
—
|
|
|
(2.5
|
)%
|
|
(4.8
|
)%
|
|||||
Change in Unrealized Value
|
|
$
|
530
|
|
|
$
|
263
|
|
|
$
|
—
|
|
|
$
|
(251
|
)
|
|
$
|
(491
|
)
|
|
|
Credit Spread Shift in Basis Points
|
||||||||||
As at March 31, 2020
|
|
—
|
|
+50
|
|
+100
|
||||||
|
|
(in millions of U.S. dollars)
|
||||||||||
Total Market Value
|
|
$
|
9,618
|
|
|
$
|
9,391
|
|
|
$
|
9,171
|
|
Market Value Change from Base
|
|
|
|
(2.4
|
)%
|
|
(4.7
|
)%
|
||||
Change in Unrealized Value
|
|
|
|
$
|
(227
|
)
|
|
$
|
(447
|
)
|
||
|
|
|
|
|
|
|
||||||
As at December 31, 2019
|
|
—
|
|
+50
|
|
+100
|
||||||
Total Market Value
|
|
$
|
10,227
|
|
|
$
|
9,999
|
|
|
$
|
9,777
|
|
Market Value Change from Base
|
|
|
|
(2.2
|
)%
|
|
(4.4
|
)%
|
||||
Change in Unrealized Value
|
|
|
|
$
|
(228
|
)
|
|
$
|
(450
|
)
|
Credit rating
|
March 31, 2020
|
|
December 31, 2019
|
|
Change
|
|||
AAA
|
26.4
|
%
|
|
27.1
|
%
|
|
(0.7
|
)%
|
AA
|
12.2
|
%
|
|
12.9
|
%
|
|
(0.7
|
)%
|
A
|
35.7
|
%
|
|
34.3
|
%
|
|
1.4
|
%
|
BBB
|
20.6
|
%
|
|
21.4
|
%
|
|
(0.8
|
)%
|
Non-investment grade
|
3.9
|
%
|
|
4.1
|
%
|
|
(0.2
|
)%
|
Not rated
|
1.2
|
%
|
|
0.2
|
%
|
|
1.0
|
%
|
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|||
Average credit rating
|
A+
|
|
|
A+
|
|
|
|
|
March 31,
2020 |
|
December 31,
2019 |
|
Change
|
||||||
|
(in millions of U.S. dollars)
|
||||||||||
Publicly traded equity investments in common and preferred stocks
|
$
|
240.9
|
|
|
$
|
327.9
|
|
|
$
|
(87.0
|
)
|
Privately held equity investments in common and preferred stocks
|
270.0
|
|
|
268.8
|
|
|
1.2
|
|
|||
Private equity funds
|
309.2
|
|
|
329.9
|
|
|
(20.7
|
)
|
|||
Equity funds
|
320.0
|
|
|
410.1
|
|
|
(90.1
|
)
|
|||
Call options on equity
|
—
|
|
|
0.1
|
|
|
(0.1
|
)
|
|||
Fair value of equities at risk
|
$
|
1,140.1
|
|
|
$
|
1,336.8
|
|
|
$
|
(196.7
|
)
|
|
|
|
|
|
|
||||||
Impact of 10% decline in fair value
|
$
|
114.0
|
|
|
$
|
133.7
|
|
|
$
|
(19.7
|
)
|
|
|
AUD
|
|
CAD
|
|
EUR
|
|
GBP
|
|
Other
|
|
Total
|
||||||||||||
As of March 31, 2020
|
|
(in millions of U.S. dollars)
|
||||||||||||||||||||||
Total net foreign currency exposure
|
|
$
|
(11.2
|
)
|
|
$
|
1.8
|
|
|
$
|
(17.8
|
)
|
|
$
|
(17.1
|
)
|
|
$
|
1.8
|
|
|
$
|
(42.5
|
)
|
Pre-tax impact of a 10% movement of the U.S. dollar(1)
|
|
$
|
(1.1
|
)
|
|
$
|
0.2
|
|
|
$
|
(1.8
|
)
|
|
$
|
(1.7
|
)
|
|
$
|
0.2
|
|
|
$
|
(4.3
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
As of December 31, 2019
|
|
|
||||||||||||||||||||||
Total net foreign currency exposure
|
|
$
|
20.2
|
|
|
$
|
(10.6
|
)
|
|
$
|
12.9
|
|
|
$
|
(11.9
|
)
|
|
$
|
0.6
|
|
|
$
|
11.2
|
|
Pre-tax impact of a 10% movement of the U.S. dollar(1)
|
|
$
|
2.0
|
|
|
$
|
(1.1
|
)
|
|
$
|
1.3
|
|
|
$
|
(1.2
|
)
|
|
$
|
0.1
|
|
|
$
|
1.1
|
|
(1)
|
Assumes 10% change in the U.S. dollar relative to other currencies.
|
•
|
Investments. Due in large part to the uncertainty caused by the COVID-19 pandemic in global financial markets, our investment portfolio has experienced significant unrealized losses (largely due to widening credit spreads on fixed income investments and changes in the fair value of our equity investments), increased volatility, heightened credit risk, and declines in yields on our fixed income investments. Our investment portfolios may continue to be adversely impacted by unfavorable market conditions caused by the COVID-19 pandemic, which could cause continued volatility in our results of operations and negatively impact our financial condition.
|
•
|
Debt and Equity Financing. As a result of the economic conditions caused by the COVID-19 pandemic, capital and credit markets continue to experience volatility that could negatively impact our ability to raise additional capital through the debt or equity markets or through bank or other debt financing. If we are unable obtain adequate capital on suitably attractive terms, or at all, we may be unable to implement our future growth or operating plans and our business, financial condition, and results of operations could be materially adversely affected.
|
•
|
Liquidity. Due to the change in fair value of our investments caused by the COVID-19 pandemic, we and our insurance and reinsurance subsidiaries may need additional capital to maintain compliance with regulatory capital requirements and/or be required to post additional collateral under existing reinsurance arrangements, which could reduce our liquidity. Due to current market conditions, we may not be able to secure letters of credit to satisfy certain of our existing collateral obligations, including through the extension or renewal of existing facilities, or such letters of credit may only be available on unfavorable terms. In addition, we may experience a reduction in the amount of available distribution or dividend capacity from our regulated insurance and reinsurance subsidiaries, which would also reduce liquidity.
|
•
|
Acquisitions and New Business. Our ability to complete acquisitions of companies and portfolios of insurance and reinsurance business in our Non-life Run-off segment may be adversely impacted by circumstances created by the COVID-19 pandemic, including as a result of the limited availability of external financing or funding to acquire new business, the willingness of counterparties to engage in transactions in light of uncertain economic conditions or financial stress, and the additional scrutiny of regulators whose approval is required to complete transactions due to the uncertain economic conditions, as well as other factors that we are unable to predict.
|
•
|
Active Underwriting Segments. We have experienced underwriting losses relating to the COVID-19 pandemic in our Atrium and StarStone segments across various lines of business. Although we have established reserves against these losses as of March 31, 2020, given the uncertainty surrounding the COVID-19 pandemic and its impact on the insurance industry, our preliminary estimates of losses and loss adjustment expenses and estimates of reinsurance recoverable arising from the COVID-19 pandemic may materially change. Unanticipated issues relating to claims and coverage may emerge, which could adversely affect our business by increasing the scope of coverage beyond our intent and/or increasing the frequency and severity of claims.
|
•
|
Operational Disruptions. We rely on the continued productivity of our senior executive team, our employees, and our agents, brokers, third party administrators, suppliers and outsourcing providers to carry out our operations. If any of these people are unable to continue to work productively, or at all, due to illness, government restrictions, remote working conditions, or other disruptions related to the COVID-19 pandemic, our ability to conduct our operations may be adversely affected. In addition, like many other companies, the vast majority of our employees are working remotely, and we are therefore more dependent on our information technology systems and the continued access by our employees and service providers to reliable internet and telecommunications systems. We will be adversely affected if these systems do not function effectively or are disrupted due to heightened demand, cybersecurity attacks and data security incidents, or for any other related reason. These types of operational disruptions that impact our people and/or systems and others we may not foresee, would negatively impact our ability to settle claims efficiently, complete acquisitions, integrate our acquired businesses, manage our investments, or otherwise conduct our business.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
|
|
Maximum Number (or Approximate Dollar Value) of Shares that May Yet be Purchased Under the Program
|
||||||
January 1, 2020 - January 31, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
February 1, 2020 - February 29, 2020
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
March 1, 2020 - March 31, 2020
|
|
92,510
|
|
$
|
135.40
|
|
|
92,510
|
|
|
$
|
—
|
|
|
|
|
92,510
|
|
|
|
|
92,510
|
|
|
$
|
—
|
|
(1)
|
Ordinary shares repurchased pursuant to the Company's Board-approved ordinary share repurchase program announced on March 9, 2020, which authorized the repurchase of up to $150.0 million of ordinary shares. The share repurchase plan was suspended on March 23, 2020 in light of the current uncertainty in the global financial markets resulting from the COVID-19 pandemic.
|
Exhibit No.
|
|
Description
|
|
Memorandum of Association of Enstar Group Limited (incorporated by reference to Exhibit 3.1 of the Company’s Form 10-K/A filed on May 2, 2011).
|
|
|
|
|
|
Fifth Amended and Restated Bye-Laws of Enstar Group Limited (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on June 13, 2019).
|
|
|
|
|
|
Certificate of Designations of Series C Participating Non-Voting Perpetual Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on June 17, 2016).
|
|
|
|
|
|
Certificate of Designations of 7.00% fixed-to-floating rate perpetual non-cumulative preference shares, Series D (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on June 27, 2018).
|
|
|
|
|
|
Certificate of Designations of 7.00% perpetual non-cumulative preference shares, Series E (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on November 21, 2018).
|
|
|
|
|
|
Joint Share Ownership Agreement, dated January 21, 2020, between the Company, Dominic F. Silvester and Zedra Trust Company, as trustee (incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K filed on January 27, 2020).
|
|
|
|
|
|
Amended and Restated Employment Agreement dated January 21, 2020 between the Company and Dominic Silvester (incorporated by reference to Exhibit 10.2 of the Company’s Form 8-K filed on January 27, 2020).
|
|
|
|
|
|
Amended and Restated Employment Agreement dated January 21, 2020 between the Company and Paul O'Shea (incorporated by reference to Exhibit 10.3 of the Company’s Form 8-K filed on January 27, 2020).
|
|
|
|
|
|
Amended and Restated Employment Agreement dated January 21, 2020 between the Company and Orla Gregory (incorporated by reference to Exhibit 10.4 of the Company’s Form 8-K filed on January 27, 2020).
|
|
|
|
|
|
2020 Form of Performance Share Unit Award Agreement (3-Year Cycle) (incorporated by reference to Exhibit 10.5 of the Company’s Form 8-K filed on January 27, 2020).
|
|
|
|
|
31.1*
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted under Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1**
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2**
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
104
|
|
Cover page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)
|
|
ENSTAR GROUP LIMITED
|
|
|
By:
|
/S/ GUY BOWKER
|
|
Guy Bowker
Chief Financial Officer, Authorized Signatory, Principal Financial Officer and Principal Accounting Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Enstar Group Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/S/ DOMINIC F. SILVESTER
|
Dominic F. Silvester
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Enstar Group Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/S/ GUY BOWKER
|
Guy Bowker
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/S/ DOMINIC F. SILVESTER
|
Dominic F. Silvester
|
Chief Executive Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/S/ GUY BOWKER
|
Guy Bowker
|
Chief Financial Officer
|