Enstar Group Limited · OTC:ESGOF
Enstar — Investor Presentation (March 2022)
30 slides from Enstar's investor presentation, Mar 7, 2022
Slide 1: Enstar Group Limited AIFA March 2022
enstargroup.com ENSTAR GROUP LIMITED AIFA March 2022
Slide 2: Disclaimer
DISCLAIMER enstargroup.com Property of Enstar Group – Not for Distribution 2 Cautionary Statement This presentation contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements regarding the intent, belief
Slide 3: Presenters
enstargroup.com Orla Gregory Chief Operating Officer & Acting Chief Financial Officer PRESENTERS 3Property of Enstar Group – Not for Distribution Matthew Kirk Group Treasurer Dominic Silvester CEO & Co-founder David Ni EVP & Head of M&A
Slide 4: Global provider of run-off solutions
enstargroup.com 4Property of Enstar Group – Not for Distribution Operating across the world’s major insurance hubs, Enstar provides capital solutions to our partners while creating shareholder value UK Australia Bermuda Executive Team United States Europe: Belgium, Italy, Liechtenstein Operating fro
Slide 5: History and track record
enstargroup.com 5Property of Enstar Group – Not for Distribution HISTORY AND TRACK RECORD 27+ year history operating in run-off space 110+ total acquisitive transactions completed to date 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 CUMULATIVE BOOK VALUE SINCE 2010 8% NASDAQ Insurance
Slide 6: Financial highlights as of 2021 year end
enstargroup.com FINANCIAL HIGHLIGHTS AS OF 2021 YEAR END Total Cash & Investments Capital Redundancy at S&P3 Total Gross Reserves1Net Earnings Prior Period Development2 Total Assets Total Shareholders’ Equity $34.9m $22.1bn $11.4bn $284.72 1$22.1bn $22.1bn 6.8% Investment Book Yield S&P ICR4 and Fit
Slide 7: Economic model
enstargroup.com ECONOMIC MODEL Redeploy Capital Enstar Run-off Business Model Leveraging our industry relations and position to source new business opportunities Acquire New Business Redeploy Capital Applying our claims management strategies to generate run-off liability earnings and manage investme
Slide 8: Total Investment Return income streams
enstargroup.com Total Investment Return (“TIR”) INCOME STREAMS 8Property of Enstar Group – Not for Distribution Our business of supplying capital release solutions generates two drivers of Return on Equity Run-off Liability Earnings (“RLE”) Return on Equity
Slide 9: Run-off liability earnings (RLE)
enstargroup.com RLE is prior period development as a percentage of average Net Loss Reserves (“NLR”) Adjusted RLE1 includes the management of defendant liabilities but excludes certain accounting adjustments Future impact to RLE: Continuing disciplined claims management expertise Seasoning
Slide 10: Total investment return (TIR)
enstargroup.com TOTAL INVESTMENT RETURN (“TIR”) 10Property of Enstar Group – Not for Distribution 4.9% -1.0% 10.0% 14.1% 2.5% 4.0% 1.3% 6.3% 12.4% 3.6% 2017 2018 2019 2020 2021 TIR Adjusted TIR 1,2 8.34 10.33 13.76 15.44 20.84 8.30 10.39 13.65 15.15 20.56 2017 2018 2019 2020 2021 Avg Total Investabl
Slide 11: Return on equity (ROE)
enstargroup.com RETURN ON EQUITY (“ROE”) 11Property of Enstar Group – Not for Distribution 11.1% -5.2% 26.6% 39.7% 7.1% 11.0% 2.5% 19.6% 43.6% 9.2% 2017 2018 2019 2020 2021 ROE Adjusted ROE 1 5yr average ROE was 15.9% 5yr average adjusted ROE1, which removes net realized and unrealized gains and
Slide 12: Non-life run-off market
enstargroup.com NON-LIFE RUN-OFF MARKET 12Property of Enstar Group – Not for Distribution Global run-off liabilities are estimated at $864bn NORTH AMERICA $402bn UK & CONTINENTAL EUROPE $302bn REST OF WORLD $160bn Business Transfer Legislation Increased Consolidation Major Cat Loss Solvency II & Cap
Slide 13: Pipeline of transactions
enstargroup.com PIPELINE OF TRANSACTIONS 13Property of Enstar Group – Not for Distribution 146 deals reviewed $43.9bn of reserves 13 deals announced / completed $7.8bn1 of reserves Healthy transaction pipeline with each opportunity diligently analyzed to drive value for shareholders Data from Januar
Slide 14: Capacity for M&A
enstargroup.com CAPACITY FOR M&A Property of Enstar Group – Not for Distribution 14 Strong position provides capacity to execute additional transactions Liquidity at 12/31/2021 • $2.1bn of cash and cash equivalents • $600m of unused revolving credit facility capacity Capital and Leverage • 21.7% fin
Slide 15: Competition
enstargroup.com COMPETITION 15Property of Enstar Group – Not for Distribution Run-off Focused Diversified Business Catalina Riverstone Marco Premia Swiss Re NICO Longevity (>20yrs in Operation) Presence in Global Run- off Markets Experience in All Types of Run-off Transactions Publicly Traded Deals
Slide 16: Leadership team
enstargroup.com LEADERSHIP TEAM 16Property of Enstar Group – Not for Distribution Paul O’Shea President, Co-founder Years at Enstar: 27 Industry Experience: 30+ years Age: 63 Dominic Silvester CEO & Co-founder Years at Enstar: 29 Industry Experience: 30+ years Age: 61 Orla Gregory COO & Acting CFO Y
Slide 17: Environmental, Social and Governance
enstargroup.com • EGL Board ESG focus areas: Investments, Climate Change, and Human Capital. • Governance structures implemented. • Group Sustainability Accounting Standards Board Report in 1Q 2022. • ESG considerations in EGL’s Investment Policy, fund manager monitoring process, and ERM Framework.
Slide 18: Key highlights
enstargroup.com KEY HIGHLIGHTS • 27+ year history • Over 110 companies and portfolios of business acquired since inception • Total assets of $24.4bn and total shareholders’ equity of $6.3bn as of Dec. 31, 2021 • Steady increase in run-off assets over life of the company • S&P ICR: BBB (Positive)1 •
Slide 19: Appendix
APPENDIX Property of Enstar Group – Not for Distribution 19
Slide 20: Financial data: summary income statement
enstargroup.com 20Property of Enstar Group – Not for Distribution $ millions Year Ended December 31, 2021 Year Ended December 31, 2020 Net premiums earned $245 $572 Net investment income and net realized and unrealized gains 429 1,945 Other income 42 140 Net gain on purchase or sales of subsidiaries
Slide 21: Financial data: summary balance sheet
enstargroup.com 21Property of Enstar Group – Not for Distribution FINANCIAL DATA Summary Balance Sheet $ millions December 31, 2021 December 31, 2020 Assets Investable assets $21,708 $17,266 Reinsurance balances recoverable 1,517 2,089 Insurance balances recoverable 213 250 Other 991 2,022 Total Ass
Slide 22: Non-GAAP measures
enstargroup.com 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 outstanding
Slide 23: Non-GAAP measures (continued)
enstargroup.com 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 reserves pro
Slide 24: Reconciliation to adjusted book value per share
enstargroup.com 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 share
Slide 25: Reconciliation to adjusted return on equity 2021, 2020, 2019
enstargroup.com Reconciliation to Adjusted Return on Equity - 2021, 2020 and 2019 For the Year Ended December 31, 2021 2020 2019 Net earnings (1) Opening Equity(1) Ratio Net earnings (1) Opening Equity (1) Ratio Net earnings (1) Opening Equity (1) (6) Ratio (in millions of U.S. dollars) Net earnings
Slide 26: Reconciliation to adjusted return on equity 2018 and 2017
enstargroup.com 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 (5.2
Slide 27: Reconciliation to adjusted total investment return
enstargroup.com Reconciliation to Adjusted Total Investment Return For the Year Ended December 31, 2021 2020 2019 2018 2017 (3) (in millions of U.S. dollars) Investment results Net investment income $ 312 $ 303 $ 308 $ 262 $ 209 Total net realized (losses) gains (61) 19 5 (1) 1 Total net unrealized
Slide 28: Reconciliation to adjusted run-off liability earnings 2021 and 2020
enstargroup.com 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)% Non-
Slide 29: Reconciliation to adjusted run-off liability earnings 2019 and 2018
enstargroup.com 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) % Non
Slide 30: Reconciliation to adjusted run-off liability earnings 2017
enstargroup.com 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 $ 4,505