Enstar Group Limited · OTC:ESGOF
Enstar — Q2 2023 Earnings Presentation
27 slides from Enstar's earnings presentation, Aug 2, 2023
Slide 1: Q2 2023 Mid-Year Review: Enstar Group Overview
Property of Enstar Group – Not for Distribution enstargroup.com Q2 2023 Mid-Year Review August 2023 Enstar Group Overview
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: Key Messages
3Property of Enstar Group – Not for Distribution KEY MESSAGES
Slide 4: YTD Highlights
4Property of Enstar Group – Not for Distribution YTD HIGHLIGHTS Six months ended June 30, 2023 Ratings Received upgrade from S&P to BBB+ on long-term issuer credit rating Share Repurchase Purchased $341 million of non-voting convertible ordinary shares1 Liquidity Upsized revolving credit agreement t
Slide 5: Business and Market
5Property of Enstar Group – Not for Distribution BUSINESS AND MARKET
Slide 6: 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 $19.2bn investab
Slide 7: Competitive Landscape
enstargroup.com Run-off Focused Diversified Business 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 ~37 ~60 ~9 ~52 Not Published Not Published Sh
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 – June 2023 1. Excludes Enhanzed Re. 216 opportunities reviewed ~$71.1bn of net reserves 17 1 deals completed $10.3bn1 of reserves Executing on opportunities that meet our risk parameters and profitability hurdles 9Property of Enstar Group – Not for Distributio
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 six months ended June 30, 2023, divided by opening equity as of December 31, 2022. 2. Non-cash items include amortization of net deferred charge assets. TO
Slide 11: Performance
11Property of Enstar Group – Not for Distribution PERFORMANCE
Slide 12: Financial Highlights
enstargroup.com Total Assets$21.9bn Run-off Liability Earnings $20mNet Earnings 1. Includes losses and loss adjustment expenses and defendant A&E liabilities. 2. The average credit ratings calculation includes cash and cash equivalents, short-term investments, fixed maturities and the fixed maturiti
Slide 13: A Growing Balance Sheet
enstargroup.com $7.9 $8.8 $11.9 $12.0 $12.9 2019 2020 2021 2022 Q2 2023 $14.1 $17.3 $21.7 $19.5 $19.2 2019 2020 2021 2022 Q2 2023 Investable Assets1 ($bn) Net Loss Reserves ($bn) CAGR 11.5% 13Property of Enstar Group – Not for Distribution 1. Investable Assets is the sum of total investments, cash a
Slide 14: The Enstar Effect
enstargroup.com THE ENSTAR EFFECT 14Property 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 15: Enstar Effect Enables Outperformance
enstargroup.com 15Property of Enstar Group – Not for Distribution Enstar Loss Reserve Outperformance vs US P&C Industry Weighted Average of Latest Five Years Ended 2022 2.9% 6.5% 8.6% General Casualty Workers' Compensation Asbestos & Environmental ENSTAR EFFECT ENABLES OUTPERFORMANCE Enstar delivere
Slide 16: History of Enhancing Book Value
enstargroup.com 30 year history operating in run-off space 117 total acquisitive transactions completed to date 16Property of Enstar Group – Not for Distribution 15 18 27 32 38 46 59 73 85 94 106 120 131 153 170 165 209 294 329 262 285 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 17: Significant Liquidity to Support Growth
enstargroup.com Significant Liquidity to Support Growth • $1.2bn of cash, cash equivalents and restricted cash • $800m of unused revolving credit facility capacity Well-Capitalized with Moderate Leverage • 27.1% financial leverage, in line with 25% - 30% long-term target • Over 5-years, BSCR (solven
Slide 18: Appendix
18Property of Enstar Group – Not for Distribution APPENDIX enstargroup.com
Slide 19: Investment Portfolio Composition
enstargroup.com 19Property of Enstar Group – Not for Distribution INVESTMENT PORTFOLIO COMPOSITION $19.2bn Total Investable Assets1 $14.5bn Investment Portfolio 2 $1.2bn Cash and restricted cash 3.76 yrs Average Duration 3 3.78% Book Yield A+ Average Investment Portfolio Credit Rating 4 Investable A
Slide 20: Management Well-Aligned with Shareholders
enstargroup.com 20Property of Enstar Group – Not for Distribution MANAGEMENT WELL-ALIGNED WITH SHAREHOLDERS Seasoned leadership with exceptional track record of value creation 24 yearsAverage Industry Experience: 212+ yearsCollective Industry Experience: Orla Gregory President Years at Enstar: 19 In
Slide 21: Financial Data: Summary Income Statement
enstargroup.com 21Property of Enstar Group – Not for Distribution FINANCIAL DATA Summary Income Statement $ millions Three Months Ended June 30, 2023 Three Months Ended June 30, 2022 Six Months Ended June 30, 2023 Six Months Ended June 30, 2022 Net premiums earned $ 7 $ 14 $ 15 $ 48 Net investment i
Slide 22: Financial Data: Summary Balance Sheet
enstargroup.com 22Property of Enstar Group – Not for Distribution FINANCIAL DATA Summary Balance Sheet $ millions June 30, 2023 December 31, 2022 Assets Investable assets 19,219 19,540 Reinsurance balances recoverable 1,093 1,131 Net deferred charge assets 797 658 Other 752 825 Total Assets 21,861 2
Slide 23: Non-GAAP Measure Definitions
enstargroup.com 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 provides a more meaningful and c
Slide 24: Reconciliation to Adjusted Run-off Liability Earnings – YTD Q2 2023
enstargroup.com 24Property of Enstar Group – Not for Distribution RECONCILIATION TO ADJUSTED RUN-OFF LIABILITY EARNINGS – YTD Q2 2023 (1) Comprises the discount rate and risk margin components. * Non-GAAP financial measure. Six Months Ended As of Six Months Ended June 30, 2023 June 30, 2023 December
Slide 25: Reconciliation to Adjusted Run-off Liability Earnings – 2022 and 2021
enstargroup.com 25Property of Enstar Group – Not for Distribution 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 Averag
Slide 26: Reconciliation to Adjusted Run-off Liability Earnings – 2020 and 2019
enstargroup.com 26Property of Enstar Group – Not for Distribution 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 Averag
Slide 27: Reconciliation to Adjusted Run-off Liability Earnings – 2018
enstargroup.com 27Property of Enstar Group – Not for Distribution 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