Enstar Group Limited · OTC:ESGOF
Enstar — FY2021 Earnings Presentation
31 slides from Enstar's earnings presentation, Feb 24, 2022
Slide 1: Investor Financial Supplement December 31, 2021
enstargroup.com ENSTAR GROUP LIMITED Investor Financial Supplement December 31, 2021
Slide 2: Table of Contents
| enstargroup.com 2 Table of Contents Page Explanatory Notes 3 Financial Highlights 5 Book Value Per Share & Return On Equity 7 Consolidated Results by Segment 8 Prior Period Development (“PPD”) by Acquisition Year 12 Ultimate Losses % Acquired Losses by Acquisition Year 13 Adjusted PPD by Acquisiti
Slide 3: Explanatory Notes
| enstargroup.com 3 Explanatory Notes About Enstar Enstar is a NASDAQ-listed leading global (re)insurance group that offers innovative capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other internat
Slide 4: Explanatory Notes (continued)
| enstargroup.com 4 Explanatory Notes (continued) Non-GAAP Financial Measures In addition to our key financial measures presented in accordance with GAAP, we present other non-GAAP financial measures that we use to manage our business, compare our performance against prior periods and against our pe
Slide 5: Financial Highlights: Key Metrics, Three Months and Year Ended 2021
| enstargroup.com 5 Three Months Ended Year Ended December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2020 Key Earnings Metrics Annualized return on equity 5.2 % 61.9 % 7.1 % 39.7 % Annualized adjusted return on equity (1) 6.1 % 54.4 % 9.2 % 43.6 % Key Run-off Metrics Average net loss
Slide 6: Financial Highlights: Five-Year Key Metrics
| enstargroup.com 6 Year Ended December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 (2) December 31, 2017 (2) Key Earnings Metrics Return on equity 7.1 % 39.7 % 26.6 % (5.2) % 11.1 % Adjusted return on equity (1) 9.2 % 43.6 % 19.6 % 2.5 % 11.0 % Key Run-off Metrics Average net los
Slide 7: Book Value Per Share & Return on Equity - Five Years
| enstargroup.com 7 Book Value Per Share & Return on Equity - Five Years Growth in Book Value Per Ordinary Share and Adjusted Book Value Per Ordinary Share* Annual % Change $161.63 $158.06 $201.39 $286.45 $316.34 $159.19 $155.94 $197.93 $281.20 $310.80 Book Value Per Ordinary Share Adjusted Book Val
Slide 8: Consolidated Results by Segment - Q4 2021
| enstargroup.com 8 Consolidated Results by Segment - Q4 2021 Three Months Ended December 31, 2021 Run-off Enhanzed Re Investments Legacy Underwriting Corporate & Other (1) Total in millions of U.S. dollars INCOME Net premiums earned $ 28 $ 5 $ — $ 8 $ — $ 41 Net investment income — — 79 2 — 81 Net
Slide 9: Consolidated Results by Segment - Q4 2020
| enstargroup.com 9 Consolidated Results by Segment - Q4 2020 Three Months Ended December 31, 2020 Run-off Investments Legacy Underwriting Corporate & Other (1) Total in millions of U.S. dollars INCOME Net premiums earned $ 15 $ — $ 93 $ — $ 108 Net investment income — 55 7 — 62 Net realized gains —
Slide 10: Consolidated Results by Segment - 2021
| enstargroup.com 10 Consolidated Results by Segment - 2021 Year Ended December 31, 2021 Run-off Enhanzed Re Investments Legacy Underwriting Corporate & Other (1) Total in millions of U.S. dollars INCOME Net premiums earned $ 182 $ 5 $ — $ 58 $ — $ 245 Net investment income — — 309 3 312 Net realize
Slide 11: Consolidated Results by Segment - 2020
| enstargroup.com 11 Consolidated Results by Segment - 2020 Year Ended December 31, 2020 Run-off Investments Legacy Underwriting Corporate & Other (1) Total in millions of U.S. dollars INCOME Net premiums earned $ 59 $ — $ 513 $ — $ 572 Net investment income — 270 33 — 303 Net realized gains — 17 2
Slide 12: Prior Period Development by Acquisition Year
| enstargroup.com 12 Prior Period Development (“PPD”) by Acquisition year PPD in Year Ended December 31, Acquisition Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (in millions of U.S. dollars) (unaudited) 2011 and prior $ 261 $ 211 $ 237 $ 226 $ 117 $ 81 $ 50 $ 70 $ 38 $ 28 2012 (23) 48 22
Slide 13: Ultimate Losses % Acquired Losses by Acquisition Year
| enstargroup.com 13 Ultimate Losses % Acquired Losses by Acquisition Year Ultimate Losses for the Years Ended December 31, Assumed and Acquired net losses and LAE Acquisition Year Third Party Related Party Total 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (in millions of U.S. dollars) (Unaudi
Slide 14: Adjusted PPD by Acquisition Year
| enstargroup.com 14 Adjusted PPD by Acquisition Year* Adjusted PPD* in Year Ended December 31, Acquisition Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (in millions of U.S. dollars) (Unaudited) 2011 and prior $ 248 $ 203 $ 221 $ 212 $ 84 $ 77 $ 61 $ 71 $ 43 $ 24 2012 (27) 42 21 13 10 7 10
Slide 15: Adjusted Ultimate Losses % Acquired Losses
| enstargroup.com 15 Adjusted Ultimate Losses % Acquired Losses* Adjusted Assumed and Acquired net losses and LAE* Adjusted Ultimate Losses* for the Years Ended December 31, (1) Acquisition Year Third Party Related Party Total 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (in millions of U.S. do
Slide 16: Capital Position & Credit Ratings
| enstargroup.com 16 Capital position December 31, 2021 December 31, 2020 Change Ordinary shareholders' equity $ 5,586 $ 6,164 $ (578) Series D and E preferred shares 510 510 — Total Enstar Group Limited shareholders' equity 6,096 6,674 (578) Noncontrolling interest 230 14 216 Total shareholders' eq
Slide 17: Non-GAAP Measures
| enstargroup.com 17 Non-GAAP Measures Non-GAAP Measure Definition Purpose of Non-GAAP Measure over GAAP Measure Adjusted book value per ordinary share Total Enstar ordinary shareholders' equity, adjusted to add: -proceeds from assumed exercise of warrants Divided by Number of ordinary shares outsta
Slide 18: Non-GAAP Measures (continued)
| enstargroup.com 18 Non-GAAP Measures (continued) Non-GAAP Measure Definition Purpose of Non-GAAP Measure over GAAP Measure Adjusted run-off liability earnings (%) Adjusted PPD divided by average adjusted net loss reserves Calculating the RLE as a percentage of our adjusted average net loss reserve
Slide 19: Reconciliation to Adjusted Book Value Per Share
| enstargroup.com 19 Reconciliation to Adjusted Book Value Per Share For the Year Ended December 31, 2021 2020 2019 Equity (1) Ordinary Shares Per Share Amount Equity (1) Ordinary Shares Per Share Amount Equity (1) Ordinary Shares Per Share Amount (in millions of U.S. dollars, except share and per s
Slide 20: Reconciliation to Adjusted Return on Equity - 2021, 2020 and 2019
| enstargroup.com 20 Reconciliation to Adjusted Return on Equity - 2021, 2020 and 2019 For the Three Months Ended December 31, For the Year Ended December 31, 2021 2020 2021 2020 2019 Net earnings (1) Opening Equity (1) Ratio Net earnings (1) Opening Equity (1) Ratio Net earnings (1) Opening Equity
Slide 21: Reconciliation to Adjusted Return on Equity - 2018 and 2017
| enstargroup.com 21 Reconciliation to Adjusted Return on Equity - 2018 and 2017 For the Year Ended December 31, 2018 2017 Net earnings (1) Opening Equity (1) (5) Ratio Net earnings (1) (5) Opening Equity (1) (5) Ratio (in millions of U.S. dollars) Net earnings/Opening equity/ROE (1) $ (163) $ 3,137
Slide 22: Reconciliation to Adjusted Total Investment Return
| enstargroup.com 22 Reconciliation to Adjusted Total Investment Return For the Three Months Ended December 31, For the Year Ended December 31, 2021 2020 2021 2020 2019 2018 2017 (3) (in millions of U.S. dollars) Investment results Net investment income $ 81 $ 62 $ 312 $ 303 $ 308 $ 262 $ 209 Total
Slide 23: Reconciliation to Adjusted Run-off Liability Earnings - QTD 2021 and 2020
| enstargroup.com 23 Reconciliation to Adjusted Run-off Liability Earnings - QTD 2021 and 2020 As at PPD December 31, 2021 Net loss reserves September 31, 2021 Net loss reserves Average net loss reserves RLE % (in millions of U.S. dollars) PPD/Net loss reserves/RLE $ 94 $ 11,555 $ 11,962 $ 11,759 3.
Slide 24: Reconciliation to Adjusted Run-off Liability Earnings - 2021 and 2020
| enstargroup.com 24 Reconciliation to Adjusted Run-off Liability Earnings - 2021 and 2020 As of December 31, 2020 2020 2019 2020 2020 PPD Net loss reserves Net loss reserves Average net loss Reserves RLE % (in millions of U.S. dollars) PPD/Net loss reserves/RLE $ (11) $ 8,544 $ 7,680 $ 8,112 (0.1)
Slide 25: Reconciliation to Adjusted Run-off Liability Earnings - 2019 and 2018
| enstargroup.com 25 Reconciliation to Adjusted Run-off Liability Earnings - 2019 and 2018 As of December 31, 2019 2019 2018 2019 2019 PPD Net loss reserves Net loss reserves Average net loss reserves RLE % (in millions of U.S. dollars) PPD/Net loss reserves/RLE $ (34) $ 7,680 $ 7,254 $ 7,467 (0.5)
Slide 26: Reconciliation to Adjusted Run-off Liability Earnings - 2017
| enstargroup.com 26 Reconciliation to Adjusted Run-off Liability Earnings - 2017 For the Year Ended December 31, 2017 2017 2016 2017 2017 PPD (2) Net loss reserves (2) Net loss reserves (2) Average net loss reserves (2) RLE % (in millions of U.S. dollars) PPD/Net loss reserves/RLE $ 244 $ 5,448 $ 4
Slide 27: Reconciliation of PPD by Acquisition Year
| enstargroup.com 27 Reconciliation of PPD by Acquisition Year PPD in year ended December 31 Acquisition year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (in millions of U.S. dollars) 2011 PPD $ 261 $ 211 $ 237 $ 226 $ 117 $ 81 $ 50 $ 70 $ 38 $ 28 FVA 26 34 22 20 24 14 17 14 7 5 ULAE run-off (
Slide 28: Reconciliation of PPD by Acquisition Year (continued)
| enstargroup.com 28 Reconciliation of PPD by Acquisition Year (continued) PPD in year ended December 31 Acquisition year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 (in millions of U.S. dollars) 2018 PPD $ — $ — $ — $ — $ — $ — $ 31 $ 35 $ 17 $ 44 Legacy — — — — — — 2 (1) (1) — FVO — — — — —
Slide 29: Reconciliation of Assumed and Acquired Reserves
| enstargroup.com 29 Reconciliation of Assumed and Acquired Reserves Non-GAAP Adjustments (2): Adjusted Assumed and Acquired net losses and LAE* Acquisition year Assumed and Acquired net losses and LAE Enhanzed Re Legacy Underwriting ULAE Fair value adjustments - acquired companies Fair value adjust
Slide 30: Investable Assets - Management's View 2021
| enstargroup.com 30 Investable Assets - Management’s View 2021* * Non-GAAP financial measures, refer to the explanatory notes on page 18 for further details. Consolidated Balance Sheet View 2021 Exchange traded funds backed by fixed income securities Bonds, CLO equities and private debt held in equ
Slide 31: Investable Assets - Management's View 2020
| enstargroup.com 31 Investable Assets - Management’s View 2020* Consolidated Balance Sheet View 2020 Exchange traded funds backed by fixed income securities Bond fund held in equity format Equities, privately held equity, private credit and real estate held in fund format Real estate held in other