Enstar Group Limited · OTC:ESGOF
Enstar — Q4 2022 Earnings Presentation
24 slides from Enstar's earnings presentation, Mar 1, 2023
Slide 1: Q4 2022 Review
Enstargroup.com Q4 2022 Review March 2023 Enstar Group Overview Realising Value
Slide 2: Information Regarding Forward-Looking Statements
Property of Enstar Group – Not for Distribution 2 INFORMATION REGARDING FORWARD-LOOKING STATEMENTS This presentation, and oral statements made with respect to information contained in this presentation, may include certain forward-looking statements regarding our views with respect to our business,
Slide 3: Value Proposition
enstargroup.com 3Property of Enstar Group – Not for Distribution VALUE PROPOSITION Leading global insurance group with a proven, 29-year record of successfully acquiring and managing run-off business while creating value for our shareholders Market leader in run-off liability management Competitive
Slide 4: Leading Global Provider of Capital Relief Solutions
enstargroup.com Deliver Capital Release and Risk Management Solutions to Insurance Market Industry founder and largest standalone provider Generate Positive Claims Outcomes "Enstar Effect” drives decades of Run-off Liability Earnings Growing Asset Base Using Origination Capabilities $19.5bn investab
Slide 5: Competitive Landscape
enstargroup.com Run-off Focused Diversified Business Catalina Riverstone Int. DARAG Premia Compre Swiss Re NICO Longevity (>20yrs in Operation) Presence in Global Run-off Markets Experience in All Types of Run-off Transactions Deals Announced Since Inception1 117 ~31 ~34 ~60 ~9 ~56 N.A. N.A. Shareho
Slide 6: Significant Growing Run-off Market
enstargroup.com P&C Rates Continue to Strengthen for Primary Insurers Major Loss Events Including Recent CATs and COVID-19 Solvency II & Capital Efficiency Business Transfer Legislation Increased Consolidation Reserve Releases Declining Key Market Drivers Source: PwC Global Insurance Run-off Survey
Slide 7: Financial Highlights Full Year 2022
enstargroup.com Total Assets$22.2bn Run-off Liability Earnings $756mNet Loss (results driven by unrealized losses) 1. Includes losses and loss adjustment expenses, future policyholder benefits, defendant A&E liabilities. 2. The average credit ratings calculation includes cash and cash equivalents, s
Slide 8: Consistent Economic Model
enstargroup.com Enstar Run-off Business Model Leverage our industry relationships and position to source new business opportunities Fully-integrated M&A and Claims units provide ground-up view of risk Source, Diligence and Acquire New Portfolios Redeploy Capital Apply claims management strategies to
Slide 9: Robust Transaction Pipeline
enstargroup.com Data from January 2020 – February 1, 2023 1. Excludes Enhanzed Re. 186 opportunities reviewed $64.9bn of net reserves 15 1 deals completed $8.1bn1 of reserves Executing on opportunities that meet our risk parameters and profitability hurdles 9Property of Enstar Group – Not for Distri
Slide 10: Return on Equity (ROE) Components
enstargroup.com 1. TIR and RLE leverage factors are calculated as average investable assets and average net loss reserves, respectively, for the year ended December 31, 2022, divided by opening equity as of December 31, 2021. 2. Non-cash items include amortization of net deferred charge assets. TOTA
Slide 11: A Growing Balance Sheet
enstargroup.com Investable Assets1 ($bn) Net Loss Reserves ($bn) CAGR 16.9% 11Property of Enstar Group – Not for Distribution 1. Investable Assets is the sum of total investments, cash and cash equivalents, restricted cash and cash equivalents and funds held. CAGR 14.1% A GROWING BALANCE SHEET A pla
Slide 12: The Enstar Effect
enstargroup.com THE ENSTAR EFFECT 12Property of Enstar Group – Not for Distribution CLAIMS DIRECTLY MANAGED EARLY TRIAGE OF CLAIMS PORTFOLIO • Detailed on a claim-by-claim basis BESPOKE SETTLEMENT STRATEGY FOR EVERY CLAIM • Data-driven approach provides comprehensive top-down, bottom-up view WORK CL
Slide 13: Loss Reserve Outperformance
enstargroup.com 13Property of Enstar Group – Not for Distribution LOSS RESERVE OUTPERFORMANCE Enstar Loss Reserve Outperformance vs US P&C Industry1,2 Five Years Ended 2021 Enstar delivered 2.7% better net loss reserve outcomes on our Run-off segment General Casualty $4.3 Workers' Compensation $2.2
Slide 14: History of Enhancing Book Value
enstargroup.com 29 year history operating in run-off space 115 total acquisitive transactions completed to date 14Property of Enstar Group – Not for Distribution 15 18 27 32 38 46 59 73 85 94 106 120 131 153 170 165 209 294 329 246 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 201
Slide 15: 5-Year ROE and Adjusted ROE
enstargroup.com 15Property of Enstar Group – Not for Distribution (5.0)% 25.5 % 38.4 % 7.9 % (15.6)% 10.2 % 2.4 % 18.8 % 41.9 % 10.1 % (1.1)% 14.4 % 2018 2019 2020 2021 2022 Average 2018- 2022 Return on Equity and Adjusted Return on Equity* Return on Equity Adjusted Return on Equity* Targeting long-
Slide 16: Liquidity, Capital and Capacity
enstargroup.com Significant Liquidity to Support Growth • $1.3bn of cash and cash equivalents • $600m of unused revolving credit facility capacity Well-Capitalized with Moderate Leverage • 28.0% financial leverage, in line with 25% - 30% long-term target • Leverage ratio increase due to unrealized l
Slide 17: Management Team
enstargroup.com 25 years Average Industry Experience: Paul O’Shea President, Co-founder Years at Enstar: 28 Industry Experience: 35+ years Age: 65 Dominic Silvester CEO & Co-founder Years at Enstar: 29 Industry Experience: 40+ years Age: 62 Orla Gregory Chief Financial Officer Years at Enstar: 19 In
Slide 18: Appendix
18Property of Enstar Group – Not for Distribution APPENDIX enstargroup.com
Slide 19: Investable Assets Composition
enstargroup.com 19Property of Enstar Group – Not for Distribution $19.5bn Total Investable Assets 1 $14.2bn Investment Portfolio 2 $1.3bn Cash and restricted cash 4.40 yrs Average Duration 3 2.47% Book Yield A+ Average Investment Portfolio Credit Rating 4 Investable Assets (As of December 31, 2022)
Slide 20: Summary Income Statement
enstargroup.com 20Property of Enstar Group – Not for Distribution $ millions Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 Year Ended December 31, 2022 Year Ended December 31, 2021 Net premiums earned $ 14 $ 41 $ 66 $ 245 Net investment income and net realized and unreali
Slide 21: Financial Data: Summary Balance Sheet
enstargroup.com 21Property of Enstar Group – Not for Distribution $ millions December 31, 2022 December 31, 2021 Assets Investable assets $ 19,540 $ 21,708 Reinsurance balances recoverable 1,131 1,517 Net deferred charge assets 658 598 Other 825 833 Total Assets $ 22,154 $ 24,656 Liabilities Losses
Slide 22: Non-GAAP Measures
enstargroup.com 22Property of Enstar Group – Not for Distribution NON-GAAP MEASURES Non-GAAP Measure Definition Purpose of Non-GAAP Measure over GAAP Measure Adjusted return on equity (%) Adjusted operating income (loss) attributable to Enstar ordinary shareholders divided by adjusted opening Enstar
Slide 23: Non-GAAP Reconciliation Notes
enstargroup.com 23Property of Enstar Group – Not for Distribution (1) Net (loss) earnings comprises net (loss) earnings attributable to Enstar ordinary shareholders, prior to any non-GAAP adjustments. Opening equity comprises Enstar ordinary shareholders' equity, which is calculated as opening Ensta
Slide 24: Adjusted ROE Reconciliation 2018-2019
enstargroup.com 24Property of Enstar Group – Not for Distribution For the Year Ended December 31, 2019 2018 Net earnings (1) Opening Equity (1) (6) (Adj) ROE Net (loss) earnings (1) Opening Equity (1) (6) (Adj) ROE (in millions of U.S. dollars) Net (loss) earnings/Opening equity/ROE (1) $ 906 $ 3,54