Enstar Group Limited · OTC:ESGOF
Enstar — Investor Presentation (June 2011)
22 slides from Enstar's investor presentation, Jun 15, 2011
Slide 1: Enstar Investor Presentation
Enstar Investor Presentation Harvard Club, New York, NY June 15, 2011
Slide 2: Disclaimer
Your strategic partner 2 Disclaimer This presentation includes certain forward-looking statements regarding our expected performance for future periods and actual results for such periods may materially differ. These statements are intended as "forward-looking statements" under the Private Securitie
Slide 3: Company overview
Your strategic partner Company overview Founded in Bermuda in 1993 Headquartered in Bermuda with 11 offices in 9 countries and 343 employees Largest stand alone run-off company; second largest run-off company behind Berkshire Hathaway Sale, or reinsurance, of run-off exposures enables sellers to fre
Slide 4: Run-off Market overview
Your strategic partner Run-off Market overview United States US run-off market is current focus for Enstar Most run-off liabilities are embedded in ongoing groups rather than stand alone entities - will likely result in more portfolio reinsurance transactions Size of run-off liabilities has been quo
Slide 5: Balance Sheets 2004 to 2011
Enstar Group Limited Balance Sheets 2004 to 2011 ‘aaiAues STebliow Reseves OTenINetGnek Van OTesiMeoty ews eneteip con ‘Your stg pas
Slide 6: Acquisitions (in $ millions)
Your strategic partner 6 Acquisitions (in $ millions) 2007 Total 2008 Total 2009 Total 2010 Total Q1 - 2011 Total 2007 to Q1 11 Total Net Assets Acquired Investments & Cash 600.9 2,914.1 198.2 988.9 158.5 4,979.2 Insurances Receivables 175.3 598.2 57.3 544.5 55.6 1,414.3 Other Assets 16.6 115.8 14.1
Slide 7: 2010 & 2011 Acquisitions
Your strategic partner 7 2010 & 2011 Acquisitions (in $ millions) Type of Deal Total Assets Total Liabilities Capital Required Knapton Insurance Company $279.5 $235.5 $44.0 Assuransinvest Company 59.6 48.5 11.1 Lloyds' RITC RITC 338.4 338.4 65.8 Allianz Portfolio Transfer 112.6 112.6 ---- Bosworth P
Slide 8: Need for Additional Capital
Need for Additional Capital In early fall 2010 we concluded the following: Significant 2010 and committed 2011 transactions had created a need for additional capital. The medium term pipeline of run-off opportunities was likely to be greater than our internally generated free cash, thus requiring ad
Slide 9: Need for Additional Capital - cont'd
Need for Additional Capital - cont'd We commenced a process of considering capital raising alternatives based on internal analysis and external advice. Working with external advisors, we concluded that private placement of debt was not an attractive alternative until such time as our equity base was
Slide 10: Need for Additional Capital - Public Offering
Need for Additional Capital - Public Offering External advisors counseled us that a public offering would: raise no more than between $100m to $150m of pure equity need to be supplemented with convertible debt Internal considerations of a public offering took into account our 2008 share offering. We
Slide 11: Need for Additional Capital - Private Offering
Need for Additional Capital - Private Offering Enstar commenced discussions with Goldman Sachs in the fall of 2010. Negotiations with Goldman Sachs were impacted by a significant increase in Enstar's share price over the course of the negotiations We concluded that an issue price of $86 per share pl
Slide 12: Summary of Goldman Sachs Investment
Your strategic partner 12 Summary of Goldman Sachs Investment Tranche Voting Common Shares Preferred Shares Total Shares Amount Warrant Shares (thousands) (thousands) (thousands) ($'m) (thousands) 1 531 750 1,281 $ 110.2 341 2 134 828 962 $ 82.7 0.0 3 0.0 1,148 1,148 $ 98.8 0.0 Total 665 2,726 3,391
Slide 13: Enstar's Business Model
Your strategic partner 13 Enstar's Business Model Acquiring Runoff Companies and Managing Third Party Liabilities Enstar Sources Deals and Performs Due Diligence Acquire Business / Portfolio Manage Third Party Runoff Negative Goodwill Acquires runoff businesses at or below Net Asset Value If purchas
Slide 14: Shareholders' Equity Future Benefits
Your strategic partner 14 Shareholders' Equity Future Benefits At Acquisition Reserve Adjustments & Commutation Shareholders' Equity Assets Liabilities Assets Liabilities Value Proposition Value Creation Negative Goodwill
Slide 15: Financial Historical Data Summary: Balance Sheet Data
Your strategic partner 15 March 31, 2011 December 31, 2010 December 31, 2009 December 31, 2008 December 31, 2007 December 31, 2006 Assets Investments & Cash 3,844.7 3,884.5 3,321.1 3,487.9 1,800.5 1,261.1 Reinsurance 1,006.6 961.4 638.3 672.7 465.3 408.1 Other 379.7 390.0 211.4 197.6 151.3 105.1 Tot
Slide 16: Financial Historical Data Summary: Statement of Earnings
Your strategic partner 16 Financial Historical Data Summary Statement of Earnings - December 31, 2006 - March 31, 2011 (in $ Millions) 3 Months Ended Mar 31, 2011 3 Months Ended Mar 31, 2010 Dec 31, 2010 Dec 31, 2009 Dec 31, 2008 Dec 31, 2007 Dec 31, 2006 Consulting fee income 4.0 14.1 23.0 16.1 25.
Slide 17: Growth in Fully Diluted Book Value Per Share
Your strategic partner 17 Growth in Fully Diluted Book Value Per Share December 31, 2004 - December 31, 2010 CAGR 25.9%
Slide 18: Loss Reserves
Your strategic partner 18 Loss Reserves Our gross loss reserves provide Enstar's imbedded value With the application of disciplined claims management and completion of successful commutations, our gross loss reserves at December 31, 2010 of $3.3 billion should produce significant savings over time T
Slide 19: Investments Constraints and Strategy
Your strategic partner 19 Investments Constraints We are likely to have negative cash flows from operations driven primarily by commutations Our portfolio is split amongst all our regulated entities subject to local regulatory and bank loan constraints Current economic environment provides for low y
Slide 20: Investments
Your strategic partner 20 Investments The following table provides a breakdown of the fair value of our cash and Investment portfolio at March 31, 2011: Type of Investment Fair Value $M Percent of Cash and Investments U. S. Government and agency 265.0 6.9% Non U.S. government 452.4 11.8% Corporate 1
Slide 21: Reinsurance Asset
Your strategic partner 21 Reinsurance Asset The following table provides a summary of our reinsurance asset and bad debt provision at March 31, 2011: The following table provides a summary of our reinsurance asset, showing split by our reinsurers ratings, and bad debt provision at March 31, 2011: Re
Slide 22: Contact
Your strategic partner 22 Contact Enstar Principal Locations Bermuda Windsor Place 3rd Floor 18 Queen Street Hamilton HM 11 Tel: +1 441 292 3645 enquiries@enstargroup.bm USA 7901 4th Street N. #203 St.Petersburg FL 33702 200 Metro Center Boulevard Unit #8 Warwick RI 02886 Tel: +1 727 576 1621 enquir