Enstar Group Limited · OTC:ESGOF
Enstar — FY2022 Earnings Presentation
31 slides from Enstar's earnings presentation, Mar 1, 2023
Slide 1: Investor Financial Supplement December 31, 2022
enstargroup.com ENSTAR GROUP LIMITED Investor Financial Supplement December 31, 2022
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)
4 Explanatory Notes (continued) Non-GAAP Financial Measures (continued) We have changed our non-GAAP measures in 2022 as follows: • The opening GAAP balances of our 2021 and 2020 Adjusted BVPS*, Adjusted ROE* and Adjusted RLE* measures have been retrospectively adjusted for a change in accounting pr
Slide 5: Financial Highlights
| enstargroup.com 5 Three Months Ended Year Ended December 31, 2022 December 31, 2021 December 31, 2022 December 31, 2021 Key Earnings Metrics ROE 5.9 % 2.1 % (15.6) % 7.9 % Adjusted ROE (1) 4.2 % 2.5 % (1.1) % 10.1 % Basic net earnings (loss) per share $ 13.34 $ 6.74 $ (52.65) $ 25.33 Diluted net e
Slide 6: Financial Highlights - Five Years
| enstargroup.com 6 Year Ended December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 December 31, 2018 (2) Key Earnings Metrics Return on equity (15.6) % 7.9 % 38.4 % 25.5 % (5.0) % Adjusted return on equity (1) (1.1) % 10.1 % 41.9 % 18.8 % 2.4 % 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 $165.23 $208.73 $293.97 $329.20 $246.20 $162.98 $205.11 $288.56 $323.43 $243.09 Book Value Per Ordinary Share Adjusted Book Val
Slide 8: Consolidated Results by Segment - Q4 2022
| enstargroup.com 8 Consolidated Results by Segment - Q4 2022 Three Months Ended December 31, 2022 Run-off Assumed Life Investments Legacy Underwriting Corporate and other (1) Total INCOME Net premiums earned $ 13 $ — $ — $ 1 $ — $ 14 Net investment income — — 151 2 — 153 Net realized losses — — (24
Slide 9: Consolidated Results by Segment - Q4 2021
| enstargroup.com 9 Consolidated Results by Segment - Q4 2021 Three Months Ended December 31, 2021 Run-off Assumed Life Investments Legacy Underwriting Corporate and other (1) Total INCOME Net premiums earned $ 28 $ 5 $ — $ 8 $ — $ 41 Net investment income — — 80 1 — 81 Net realized losses — — (62)
Slide 10: Consolidated Results by Segment - 2022
| enstargroup.com 10 Consolidated Results by Segment - 2022 Year Ended December 31, 2022 Run-off Assumed Life Investments Legacy Underwriting Corporate and other (1) Total INCOME Net premiums earned $ 40 $ 17 $ — $ 9 $ — $ 66 Net investment income — — 445 10 — 455 Net realized losses — — (135) — — (
Slide 11: Consolidated Results by Segment - 2021
| enstargroup.com 11 Consolidated Results by Segment - 2021 Year Ended December 31, 2021 Run-off Assumed Life Investments Legacy Underwriting Corporate and other (1) Total INCOME Net premiums earned $ 182 $ 5 $ — $ 58 $ — $ 245 Net investment income — — 309 3 — 312 Net realized gains — — (61) — — (6
Slide 12: Prior Period Development (PPD) by Acquisition Year
| enstargroup.com 12 Prior Period Development (“PPD”) by Acquisition year PPD in Year Ended December 31, Acquisition Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (in millions of U.S. dollars) (unaudited) 2012 and prior $ 259 $ 259 $ 239 $ 128 $ 90 $ 61 $ 72 $ 44 $ 34 $ 15 2013 (2) 30 43 32
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 and Transfers Between Acquisition Years Total 2013 2014 2015 2016 2017 2018 2019 2020 2021 20
Slide 14: Adjusted PPD by Acquisition Year
| enstargroup.com 14 Adjusted PPD by Acquisition Year* Adjusted PPD* in Year Ended December 31, Acquisition Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (in millions of U.S. dollars) (Unaudited) 2012 and prior $ 293 $ 281 $ 254 $ 152 $ 104 $ 78 $ 86 $ 51 $ 39 $ 27 2013 (30) 10 21 19 22 30
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 and Transfers Between Acquisition Years Total 2013 2014 2015 2016 2017 2018 201
Slide 16: Capital Position & Credit Ratings
| enstargroup.com 16 Capital Position & Credit Ratings Credit ratings (1) Standard and Poor’s Fitch Ratings Long-term issuer BBB (Outlook: Positive) BBB+ (Outlook: Stable) 2029 Senior Notes BBB BBB 2031 Senior Notes BBB- BBB 2040 and 2042 Junior Subordinated Notes BB+ BBB- Series D and E Preferred S
Slide 17: Non-GAAP Measures
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 Divided by Number of ordinary shares outstanding, adjusted for: -the ultimate effect of any dilutive securities on the numb
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, 2022 2021 2020 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 - Q4 2022 and Q4 2021
| enstargroup.com 20 Reconciliation to Adjusted Return on Equity - Q4 2022 and Q4 2021 Three Months Ended December 31, 2022 2021 Net (loss) earnings (1) Opening equity (1) (Adj) ROE Net (loss) earnings (1) Opening equity (1) (Adj) ROE Net (loss) earnings/Opening equity/ROE (1) $ 227 $ 3,866 5.9 % $
Slide 21: Reconciliation to Adjusted Return on Equity - 2022, 2021 and 2020
| enstargroup.com 21 Reconciliation to Adjusted Return on Equity - 2022, 2021 and 2020 (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 calcul
Slide 22: Reconciliation to Adjusted Return on Equity - 2019 and 2018
| enstargroup.com 22 Reconciliation to Adjusted Return on Equity - 2019 and 2018 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 (
Slide 23: Reconciliation to Adjusted Run-off Liability Earnings - 2022 and 2021
| enstargroup.com 23 Reconciliation to Adjusted Run-off Liability Earnings - 2022 and 2021 Year Ended As of Year Ended December 31, 2021 December 31, 2021 December 31, 2020 December 31, 2021 December 31, 2021 PPD Net loss reserves Net loss reserves Average net loss reserves RLE % (in millions of U.S
Slide 24: Reconciliation to Adjusted Run-off Liability Earnings - 2020 and 2019
| enstargroup.com 24 Reconciliation to Adjusted Run-off Liability Earnings - 2020 and 2019 Year Ended As of Year Ended December 31, 2020 December 31, 2020 December 31, 2019 December 31, 2020 December 31, 2020 PPD Net loss reserves Net loss reserves Average net loss reserves RLE % (in millions of U.S
Slide 25: Reconciliation to Adjusted Run-off Liability Earnings - 2018
| enstargroup.com 25 Reconciliation to Adjusted Run-off Liability Earnings - 2018 Year Ended As of Year Ended December 31, 2018 December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2018 PPD Net loss reserves (2) Net loss reserves (2) Average net loss reserves (2) RLE % (in millions of
Slide 26: Reconciliation to Adjusted Total Investment Return
| enstargroup.com 26 Reconciliation to Adjusted Total Investment Return For the Three Months Ended December 31, For the Year Ended December 31, 2022 2021 2022 2021 2020 2019 2018 Investment results Net investment income $ 153 $ 81 $ 455 $ 312 $ 303 $ 308 $ 262 Net realized (losses) gains (24) (62) (
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 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (in millions of U.S. dollars) 2012 and prior PPD 259 259 239 128 90 61 72 44 34 15 FVA 34 22 15 24 14 17 14 7 5 12 2012 and prior Adjusted P
Slide 28: Reconciliation of PPD by Acquisition Year (continued)
| enstargroup.com 28 Reconciliation of PPD by Acquisition Year (continued) * Non-GAAP financial measure. Cumulative Adjusted PPD on page 14 is merely the sum of the relevant numbers in the table above. PPD in year ended December 31 Acquisition year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 (
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 Fair value adjustments - acquired companies Fair value adjustments
Slide 30: Investment Composition - 2022
| enstargroup.com 30 Investment Composition - 2022 Other Investments Equities Cash(2) December 31, 2022 Hedge Funds Fixed income funds Equity funds Private equity funds CLO equities CLO equity funds Private credit funds Real estate debt fund Other(1) Publicly traded equities Exchange- traded funds P
Slide 31: Investment Composition - 2021
| enstargroup.com 31 Investment Composition - 2021 Other Investments Equities December 31, 2021 Hedge Funds Fixed income funds Equity funds Private equity funds CLO equities CLO equity funds Private credit funds Real estate debt fund Publicly traded equities Exchange- traded funds Privately held equ