Enstar has revealed that one of its wholly-owned subsidiaries has signed an agreement with an Australian subsidiary of Zurich Insurance Group to reinsure its New South Wales motor vehicle Compulsory Third Party (CTP) insurance business.
Under the reinsurance, effective as of 1 January 2018, Enstar's subsidiary will assume gross reinsurance reserves of approximately AUD$350mn (approximately $275mn) relating to the CTP insurance business.
Following the initial reinsurance, which will transfer the economics of the CTP insurance business to Enstar’s subsidiary, the parties will pursue a portfolio transfer of the CTP insurance business under Division 3A of Part III of Australia’s Insurance Act 1973 (Cth), which would provide legal finality for Zurich.
The Division 3A transfer is subject to court, regulatory and other approvals.
Commenting on the transaction, Dominic Silvester, Enstar's CEO, said: “This transaction with Zurich builds on Enstar’s successful management of other large Australian legacy portfolios. It significantly enhances our footprint in Australia as we continue to grow our non-life run-off operations in key insurance markets. We appreciate the opportunity to partner with Zurich to offer a reinsurance solution for its CTP portfolio.”