AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit rating of “a+” for Cavello Bay Reinsurance, a Bermuda-based subsidiary of Enstar. The outlook for both ratings is stable.
According to AM Best, the ratings reflect Cavello Bay’s balance sheet strength, which is assessed as very strong.
The affirmation follows the acquisition of Enstar by Sixth Street Partners, LLC. AM Best noted that the company’s capital position remains solid under the new ownership structure. While ownership has changed, expectations are that Enstar’s business model will remain broadly consistent.
Cavello Bay operates within the non-life runoff market. The company has also expanded into areas such as short-tailed risks and insurance-linked securities solutions.
Last year, AM Best also assigned the same ratings to Cavello Bay, citing its position as the primary operating entity holding the majority of Enstar’s consolidated assets and liabilities.
In a move that expanded its Bermuda presence, Cavello Bay acquired a Class 3B insurer and segregated accounts company in late 2024. The acquired entity brought with it $66 million in shareholders’ equity.
“The deal structure eliminates collateral requirements, demonstrating the benefit of Cavello Bay’s strong balance sheet and financial strength rating,” CEO Dominic Silvester (pictured above) said.
As part of the transaction, a consolidated retrocession agreement was executed, removing collateral requirements and streamlining the integration under Cavello Bay’s balance sheet.
In May, Cavello Bay also completed a $2.3 billion loss-portfolio transfer with AXIS Capital, covering 75% of reserves associated with certain pre-2022 US casualty insurance liabilities. The transaction reinforced Cavello Bay’s capacity to underwrite large-scale runoff portfolios and manage legacy exposures, aligning with its operational role within Enstar.
January also saw Enstar entering a ground-up loss portfolio transfer (LPT) agreement with Atrium Syndicate 609, managed by Atrium Underwriters Limited.
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