Enstar Group LTD [ESGRO] Filings

10-Q 1 esgr-20240630.htm 10-Q esgr-20240630

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

Commission File Number 001-33289

ENSTAR GROUP LIMITED

(Exact name of Registrant as specified in its charter)


BERMUDA			N/A
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

A.S. Cooper Building, 4th Floor, 26 Reid Street, Hamilton HM 11, Bermuda

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (441) 292-3645

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Ordinary shares, par value $1.00 per share	ESGR	The NASDAQ Stock Market	LLC
Depositary Shares, Each Representing a 1/1,000th Interest in a 7.00%	ESGRP	The NASDAQ Stock Market	LLC
Fixed-to-Floating Rate Perpetual Non-Cumulative Preferred Share, Series D, Par Value $1.00 Per Share
Depositary Shares, Each Representing a 1/1,000th Interest in a 7.00%	ESGRO	The NASDAQ Stock Market	LLC
Perpetual Non-Cumulative Preferred Share, Series E, Par Value $1.00 Per Share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As at July 30, 2024, the registrant had outstanding 15,231,654 voting ordinary shares, par value $1.00 per share.

Table of Contents

Enstar Group Limited

Quarterly Report on Form 10-Q

For the Period Ended June 30, 2024

Table of Contents


		Page
	Glossary of Key Terms	3

PART I

Item 1.	Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	59
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	104
Item 4.	Controls and Procedures	104

PART II

Item 1.	Legal Proceedings	105
Item 1A.	Risk Factors	105
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	108
Item 3.	Defaults Upon Senior Securities	108
Item 4.	Mine Safety Disclosures	108
Item 5.	Other Information	109
Item 6.	Exhibits	110

Table of Contents

GLOSSARY OF KEY TERMS



A&E						Asbestos and environmental

Acquisition costs						Costs that are directly related to the successful efforts of acquiring new insurance contracts or renewing existing insurance contracts, and which principally consist of incremental costs such as: commissions, brokerage expenses, premium taxes and other fees incurred at the time that a contract or policy is issued.

ADC						Adverse development cover – A retrospective reinsurance arrangement that will insure losses in excess of an established reserve and provide protection up to a contractually agreed amount.

Adjusted RLE						Adjusted run-off liability earnings - Non-GAAP financial measure calculated by dividing adjusted prior period development by average adjusted net loss reserves. See “Non-GAAP Financial Measures” for reconciliation.
Adjusted ROE						Adjusted return on equity - Non-GAAP financial measure calculated by dividing adjusted operating income (loss) attributable to Enstar ordinary shareholders by adjusted opening Enstar ordinary shareholders’ equity. See “Non-GAAP Financial Measures” for reconciliation.
Adjusted Term SOFR						Adjusted forward-looking term rate based on the Secured Overnight Financing Rate.
Adjusted TIR						Adjusted total investment return - Non-GAAP financial measure calculated by dividing adjusted total investment return by average adjusted total investable assets. See “Non-GAAP Financial Measures” for reconciliation.
AFS						Available-for-sale


ALAE						Allocated loss adjustment expenses
Allianz						Allianz SE
AmTrust						AmTrust Financial Services, Inc.
Annualized						Calculation of the quarterly result or year-to-date result multiplied by four and then divided by the number of quarters elapsed within the applicable year-to-date period.
AOCI						Accumulated other comprehensive income
APIC						Additional Paid-in Capital


ASC						Accounting Standards Codification
ASU						Accounting Standards Update
Arden						Arden Reinsurance Company Ltd.





Atrium						Atrium Underwriting Group Limited
bps						Basis point(s)
BMA						Bermuda Monetary Authority


BSCR						Bermuda Solvency Capital Requirement
BVPS						Book value per ordinary share - GAAP financial measure calculated by dividing Enstar ordinary shareholders’ equity by the number of ordinary shares outstanding.
Cavello						Cavello Bay Reinsurance Limited, a wholly-owned subsidiary


CODM						Chief operating decision maker
Citco						Citco III Limited
CLO						Collateralized loan obligation





Core Specialty						Core Specialty Insurance Holdings, Inc.

CPP Investments						Canada Pension Plan Investment Board
DCo						DCo LLC

Defendant A&E liabilities						Defendant asbestos and environmental liabilities - Non-insurance liabilities relating to amounts for indemnity and defense costs for pending and future claims, as well as amounts for environmental liabilities associated with properties.
DCA						Deferred charge asset - The amount by which estimated ultimate losses payable exceed the consideration received at the inception of a retroactive reinsurance agreement and that are subsequently amortized over the estimated loss settlement period.

Table of Contents

GLOSSARY OF KEY TERMS


DGL						Deferred gain liability - The amount by which consideration received exceeds estimated ultimate losses payable at the inception of a retroactive reinsurance agreement and that are subsequently amortized over the estimated loss settlement period.


EB Trust						Enstar Group Limited Employee Benefit Trust










Enhanzed Re						Enhanzed Reinsurance Ltd.
Enstar						Enstar Group Limited and its consolidated subsidiaries
Enstar Finance						Enstar Finance LLC

Exchange Transaction						The exchange of a portion of our indirect interest in Northshore for all of the Trident V Funds’ indirect interest in StarStone U.S.
FAL						Funds at Lloyd's - A deposit in the form of cash, securities, letters of credit or other approved capital instrument that satisfies the capital requirement to support the Lloyd's syndicate underwriting capacity.


FDBVPS						Fully diluted book value per ordinary share - Non-GAAP financial measure calculated by dividing Enstar ordinary shareholders’ equity by the number of ordinary shares outstanding, adjusted for equity awards granted and not yet vested (similar to the calculation of diluted earnings per share). See “Non-GAAP Financial Measures” in Item 7 for reconciliation.
Funds held						The account created with premium due to the reinsurer pursuant to the reinsurance agreement, the balance of which is credited with investment income and losses paid are deducted.
Funds held by reinsured companies						Funds held, as described above, where we receive a fixed crediting rate of return or other contractually agreed return on the assets held.
Funds held - directly managed						Funds held, as described above, where we receive the actual investment portfolio return on the assets held.
Future policyholder benefits						The liability relating to life reinsurance contracts, which are based on the present value of anticipated future cash flows and mortality rates.





GCM Fund						GCM Blue Sails Infrastructure Offshore Opportunities Fund, L.P.
Go-shop						A 35-day period immediately following the date of the Merger Agreement during which the Company's Board of Directors and advisors may solicit alternative acquisition proposals from third parties.
IBNR						Incurred but not reported - The estimated liability for unreported claims that have been incurred, as well as estimates for the possibility that reported claims may settle for amounts that differ from the established case reserves as well as the potential for closed claims to re-open.



ILS						Insurance Linked Securities
Investable assets						The sum of total investments, cash and cash equivalents, restricted cash and cash equivalents and funds held
JSOP						Joint Share Ownership Plan
LAE						Loss adjustment expenses





Lloyd's						This term may refer to either the society of individual and corporate underwriting members that pool and spread risks as members of one or more syndicates, or the Corporation of Lloyd’s, which regulates and provides support services to the Lloyd’s market
LOC						Letter of credit
LPT						Loss Portfolio Transfer - Retroactive reinsurance transaction in which loss obligations that are already incurred are ceded to a reinsurer, subject to any stipulated limits

Merger						Series of mergers resulting in the Company surviving the Merger as a wholly-owned subsidiary of Elk Bidco Limited, an exempted company limited by shares existing under the laws of Bermuda
Merger Agreement						Enstar Group Limited entered into an Agreement and Plan of Merger with Elk Bidco Limited, which is backed by equity commitments from investment vehicles managed or advised by affiliates of Sixth Street Partners, LLC.
Monument Midco						Monument Midco Limited, a wholly owned subsidiary of Monument Re
Monument Re						Monument Insurance Group Limited

Morse TEC						Morse TEC LLC



NAV						Net asset value
NCI						Noncontrolling interests

Table of Contents

GLOSSARY OF KEY TERMS


New business						Material transactions, which generally take the form of reinsurance or direct business transfers, or business acquisitions.





NIFO						Net investment in foreign operation
Northshore						Northshore Holdings Limited
OLR						Outstanding loss reserves - Provisions for claims that have been reported and accrued but are unpaid at the balance sheet date.
Parent						Elk Bidco Limited


pps						Percentage point(s)
PPD						Prior period development - Changes to loss estimates recognized in the current calendar year that relate to loss reserves established in previous calendar years.

Private equity funds						Investments in limited partnerships and limited liability companies




QBE						QBE Insurance Group Limited

RACQ						RACQ Insurance Limited
Reinsurance to close (RITC)						A business transaction to transfer estimated future liabilities attached to a given year of account of a Lloyd's syndicate into a later year of account of either the same or different Lloyd's syndicate in return for a premium.

Reserves for losses and LAE						Management's best estimate of the ultimate cost of settling losses as of the balance sheet date. This includes OLR and IBNR.

Retroactive reinsurance						Contracts that provide indemnification for losses and LAE with respect to past loss events.
RLE						Run-off liability earnings – GAAP-based financial measure calculated by dividing prior period development by average net loss reserves.
RNCI						Redeemable noncontrolling interests
ROE						Return on equity - GAAP-based financial measure calculated by dividing net income (loss) attributable to Enstar ordinary shareholders by opening Enstar ordinary shareholders’ equity
Run-off						A line of business that has been classified as discontinued by the insurer that initially underwrote the given risk
Run-off portfolio						A group of insurance policies classified as run-off.


SEC						U.S. Securities and Exchange Commission
SGL No. 1						SGL No. 1 Limited



Sixth Street						Sixth Street Partners, LLC
SSHL						StarStone Specialty Holdings Limited
StarStone International						StarStone's non-U.S. operations
StarStone U.S.						StarStone U.S. Holdings, Inc. and its subsidiaries

Stone Point						Stone Point Capital LLC


TIR						Total investment return - GAAP financial measure calculated by dividing total investment return, including other comprehensive income, for the applicable period by average total investable assets
Trident V Funds						Trident V, L.P., Trident V Parallel Fund, L.P. and Trident V Professionals Fund, L.P.



U.S. GAAP						Accounting principles generally accepted in the United States of America
ULAE						Unallocated loss adjustment expenses - Loss adjustment expenses relating to run-off costs for the estimated payout of the run-off, such as internal claim management or associated operational support costs.
Unearned premium						The unexpired portion of policy premiums that will be earned over the remaining term of the insurance contract.
VIE						Variable interest entity

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report and the documents incorporated by reference herein contain statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to our financial condition, results of operations, business strategies, operating efficiencies, competitive positions, growth opportunities, plans and objectives of our management, as well as the markets for our securities and the insurance and reinsurance sectors in general.

Statements that include words such as "estimate," "project," "plan," "intend," "expect," "anticipate," "believe," "would," "should," "could," "seek," "may" and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise.

All forward-looking statements are necessarily estimates or expectations, and not statements of historical fact, reflecting the best judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements.

These forward looking statements should, therefore, be considered in light of various important factors, including those set forth in this report and in our Annual Report on Form 10-K for the year ended December 31, 2023, which could cause actual results to differ materially from those suggested by the forward-looking statements. These risk factors include:

•the completion of the Merger (as defined herein) on the anticipated terms and timing;

•the satisfaction of other conditions to the completion of the Merger, including obtaining required shareholder and regulatory approvals;

•the risk that our stock price may fluctuate during the pendency of the Merger and may decline if the Merger is not completed;

•potential litigation relating to the Merger that could be instituted against us or our directors, managers or officers, including the effects of any outcomes related thereto;

•the risk that disruptions from the Merger (including the ability of certain customers to terminate or amend contracts upon a change of control) will harm our business, including current plans and operations, including during the pendency of the Merger;

•our ability to retain and hire key personnel;

•the diversion of management’s time and attention from ordinary course business operations to completion of the Merger and integration matters;

•potential adverse reactions or changes to business relationships resulting from the announcement or completion of the Merger;

•legislative, regulatory and economic developments;

•potential business uncertainty, including changes to existing business relationships, during the pendency of the Merger that could affect our financial performance;

•certain restrictions during the pendency of the proposed transaction that may impact our ability to pursue certain business opportunities or strategic transactions;

•unpredictability and severity of catastrophic events, including but not limited to acts of terrorism, outbreaks of war or hostilities or global pandemics, as well as management’s response to any of the aforementioned factors;

•the possibility that the Merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events;

•unexpected costs, liabilities or delays associated with the Merger;

•the response of competitors to the Merger;

•the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger, including in circumstances requiring us to pay a termination fee;

•the risk that an active trading market for the newly issued preferred shares that our holders of the depositary shares representing our preferred shares will receive in the Merger does not exist and may not develop;

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

•the adequacy of our loss reserves and the need to adjust such reserves as claims develop over time, including due to the impact of emerging claim and coverage issues and disputes that could impact reserve adequacy;

•risks relating to our acquisitions, including our ability to evaluate opportunities, successfully price acquisitions, address operational challenges, support our planned growth and assimilate acquired portfolios and companies into our internal control system in order to maintain effective internal controls, provide reliable financial reports and prevent fraud;

•risks relating to climate change and its potential impact on the returns from our run-off business and our investments;

•changes in tax laws or regulations applicable to us or our subsidiaries, including the Bermuda Corporate Income Tax, or the risk that we or one of our non-U.S. subsidiaries become subject to significant, or significantly increased, income taxes in the U.S. or elsewhere;

•the risk that U.S. persons who own our ordinary shares might become subject to adverse U.S. tax consequences as a result of related person insurance income;

•risks relating to our ability to obtain regulatory approvals, including the timing, terms and conditions of any such approvals, and to satisfy other closing conditions in connection with our acquisition agreements, which could affect our ability to complete acquisitions;

•risks relating to the variability of statutory capital requirements and the risk that we may require additional capital in the future, which may not be available or may be available only on unfavorable terms;

•the risk that our reinsurance subsidiaries may not be able to provide the required collateral to ceding companies pursuant to their reinsurance contracts, including through the use of letters of credit;

•risks relating to the availability and collectability of our ceded reinsurance;

•the ability of our subsidiaries to distribute funds to us and the resulting impact on our liquidity;

•losses due to foreign currency exchange rate fluctuations;

•the risk that the value of our investment portfolios and the investment income that we receive from these portfolios may decline materially as a result of market fluctuations and economic conditions, including those related to interest rates, credit spreads and equity prices (including the risk that we may realize losses related to declines in the value of our investments portfolios if we elect to, or are required to, sell investments with unrealized losses);

•risks relating to our ability to structure our investments in a manner that recognizes our liquidity needs;

•risks relating to our strategic investments in alternative asset classes and joint ventures, which are illiquid and may be volatile;

•risks relating to our ability to accurately value our investments, which requires methodologies, estimates and assumptions that can be highly subjective, and the inaccuracy of which could adversely affect our financial condition;

•risks relating to our liquidity demands and the structure of our investment portfolios, which may adversely affect the performance of our investment portfolio and financial results;

•risks relating to the complex regulatory environment in which we operate, including that ongoing or future industry regulatory developments will disrupt our business, affect the ability of our subsidiaries to operate in the ordinary course or to make distributions to us, or mandate changes in industry practices in ways that increase our costs, decrease our revenues or require us to alter aspects of the way we do business;

•risks relating to laws and regulations regarding sanctions and foreign corrupt practices, the violation of which could adversely affect our financial condition and results of operations;

•the risk that some of our directors, large shareholders and their affiliates have interests that can create conflicts of interest through related party transactions;

•the risk that outsourced providers could breach their obligations to us which could adversely affect our business and results of operations;

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

•operational risks, including cybersecurity events, external hazards, human failures or other difficulties with our information technology systems that could disrupt our business or result in the loss of critical and confidential information, increased costs; and

•risks relating to the ownership of our shares resulting from certain provisions of our bye-laws and our status as a Bermuda company.

The factors listed above should not be construed as exhaustive and should be read in conjunction with the Risk Factors that are included in our Annual Report on Form 10-K for the year ended December 31, 2023 and this Quarterly Report on Form 10-Q for the quarter ended June 30, 2024. We undertake no obligation to publicly update or review any forward-looking statement, whether to reflect any change in our expectations with regard thereto, or as a result of new information, future developments or otherwise, except as required by law.

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS


CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			Page
Unaudited Condensed Consolidated Balance Sheets as of June 3 0 , 2024 and December 31, 2023			10
Unaudited Condensed Consolidated Statements of Operations for the Three and Six months ended June 30, 2024 and 2023			11
Unaudited Condensed Consolidated Statements of Comprehensive Income for the T hree and Six months ended June 30, 2024 and 2023			12
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the T hree and Six months ended June 30, 2024 and 2023			14
Unaudited Condensed Consolidated Statements of Cash Flows for the Six months ended June 30, 2024 and 2023			15
Notes to the Unaudited Condensed Consolidated Financial Statements			17
Note 1 - Merger Agreement			17
Note 2 - Basis of Presentation			18
Note 3 - Significant New Business			20
Note 4 - Segment Information			21

Note 5 - Investments			23
Note 6 - Derivatives and Hedging Instruments			30
Note 7 - Deferred Charge Assets and Deferred Gain Liabilities			33

Note 8 - Losses and Loss Adjustment Expenses			33
Note 9 - Future Policyholder Benefits			37
Note 10 - Defendant Asbestos and Environmental Liabilities			39
Note 1 1 - Fair Value Measurements			40
Note 1 2 - Variable Interest Entities			48



Note 1 3 - Noncontrolling Interests			49
Note 1 4 - Shareholders' Equity			50
Note 1 5 - Earnings Per Share			54


Note 1 6 - Related Party Transactions			55
Note 1 7 - Commitments and Contingencies			58

Enstar Group Limited | Second Quarter 2024 | Form 10-Q 9

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ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30, 2024 and December 31, 2023


	June 30, 2024		December 31, 2023
	(expressed in millions of U.S. dollars, except share data)
ASSETS
Short-term investments, trading, at fair value	$	9	$	2
Short-term investments, available-for-sale, at fair value (amortized cost: 2024 — $45; 2023 — $62)	45		62
Fixed maturities, trading, at fair value	1,698		1,949

Fixed maturities, available-for-sale, at fair value (amortized cost: 2024 — $5,381; 2023 — $5,642; net of allowance: 2024 — $14; 2023 — $16)	4,971		5,261
Funds held	4,730		5,251
Equities, at fair value (cost: 2024 — $602; 2023 — $615)	761		701
Other investments, at fair value (includes consolidated variable interest entity: 2024 - $101; 2023 - $59)	4,091		3,853

Equity method investments	318		334
Total investments (Note 5 and Note 1 1)	16,623		17,413
Cash and cash equivalents (includes consolidated variable interest entity: 2023 — $8)	469		564
Restricted cash and cash equivalents	283		266
Accrued interest receivable	63		71



Reinsurance balances recoverable on paid and unpaid losses (net of allowance: 2024 — $119; 2023 — $131)	582		740
Reinsurance balances recoverable on paid and unpaid losses, at fair value (Note 1 1)	199		217
Insurance balances recoverable (net of allowance: 2024 — $4; 2023 — $5) (Note 10)	169		172




Net deferred charge assets (Note 7)	687		731
Other assets	821		739

TOTAL ASSETS	$	19,896	$	20,913

LIABILITIES
Losses and loss adjustment expenses (Note 8)	$	10,148	$	11,196
Losses and loss adjustment expenses, at fair value (Note 8 and Note 1 1)	1,056		1,163

Defendant asbestos and environmental liabilities (Note 10)	540		567

Insurance and reinsurance balances payable	32		43

Debt obligations	1,832		1,831

Other liabilities (includes consolidated variable interest entity: 2024 and 2023 — $1)	408		465

TOTAL LIABILITIES	14,016		15,265

COMMITMENTS AND CONTINGENCIES (Note 1 7)


SHAREHOLDERS’ EQUITY (Note 1 4)

Voting ordinary shares (par value $1 each, issued and outstanding 2024: 15,230,911; 2023: 15,196,685)	15		15




Preferred Shares:
Series C Preferred Shares (issued and held in treasury 2024 and 2023: 388,571)	—		—
Series D Preferred Shares (issued and outstanding 2024 and 2023: 16,000; liquidation preference $400)	400		400
Series E Preferred Shares (issued and outstanding 2024 and 2023: 4,400; liquidation preference $110)	110		110
Treasury shares, at cost:
Series C Preferred shares (2024 and 2023: 388,571)	(422)		(422)
Joint Share Ownership Plan (voting ordinary shares, held in trust 2024 and 2023: 565,630)	(1)		(1)
Additional paid-in capital	591		579
Accumulated other comprehensive loss	(357)		(336)
Retained earnings	5,435		5,190
Total Enstar Shareholders’ Equity	5,771		5,535
Noncontrolling interests (Note 1 3)	109		113
TOTAL SHAREHOLDERS’ EQUITY	5,880		5,648
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	19,896	$	20,913

See accompanying notes to the unaudited condensed consolidated financial statements.

Enstar Group Limited | Second Quarter 2024 | Form 10-Q 10

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ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2024 and 2023


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(expressed in millions of U.S. dollars, except share and per share data)
REVENUES
Net premiums earned	$	5	$	7	$	16	$	15

Net investment income	155		172		315		328
Net realized losses	(9)		(25)		(15)		(43)
Fair value changes in trading securities, funds held and other investments	86		(2)		171		204
Other (loss) income	(1)		2		(1)		282

Total revenues	236		154		486		786

EXPENSES
Net incurred losses and loss adjustment expenses
Current period	4		3		9		13
Prior periods	(62)		(10)		(86)		(20)
Total net incurred losses and loss adjustment expenses	(58)		(7)		(77)		(7)

Amortization of net deferred charge assets	29		24		59		41
Acquisition costs	1		4		2		6
General and administrative expenses	98		85		185		174
Interest expense	23		22		45		45
Net foreign exchange losses (gains)	1		5		(8)		(1)
Total expenses	94		133		206		258

INCOME BEFORE INCOME TAXES	142		21		280		528
Income tax benefit (expense)	2		4		(3)		5
(Loss) income from equity method investments	(8)		14		(13)		25


NET INCOME	136		39		264		558
Less: Net income attributable to noncontrolling interests	(1)		(9)		(1)		(95)
NET INCOME ATTRIBUTABLE TO ENSTAR	135		30		263		463
Dividends on preferred shares	(9)		(9)		(18)		(18)
NET INCOME ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS	$	126	$	21	$	245	$	445

Earnings per ordinary share attributable to Enstar Ordinary Shareholders:
Basic	$	8.59	$	1.36	$	16.72	$	27.44



Diluted	$	8.49	$	1.34	$	16.49	$	27.19



Weighted average ordinary shares outstanding:
Basic	14,664,767		15,460,318		14,652,962		16,216,080
Diluted	14,846,505		15,660,981		14,854,673		16,366,517

See accompanying notes to the unaudited condensed consolidated financial statements.

Enstar Group Limited | Second Quarter 2024 | Form 10-Q 11

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ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Six Months Ended June 30, 2024 and 2023


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
	(expressed in millions of U.S. dollars)
NET INCOME	$	136	$	39	$	264	$	558

Other comprehensive income (loss), net of income taxes:
Unrealized (losses) gains on fixed maturities, available-for-sale arising during the period	(3)		(34)		(36)		23
Reclassification adjustment for change in allowance for credit losses recognized in net income	(2)		5		(1)		(4)
Reclassification adjustment for net realized losses included in net income	10		20		15		47

Unrealized gains (losses) arising during the period, net of reclassification adjustments	5		(9)		(22)		66



Reclassification adjustment for remeasurement of future policyholder benefits included in net income	—		—		—		(363)
Change in currency translation adjustment	2		(3)		1		2
Change in net liability for losses and LAE at fair value - Instrument-specific credit risk	—		21		—		21

Total other comprehensive income (loss)	7		9		(21)		(274)

Comprehensive income	143		48		243		284
Less: Comprehensive loss attributable to noncontrolling interests	(1)		(10)		(1)		(7)
COMPREHENSIVE INCOME ATTRIBUTABLE TO ENSTAR	$	142	$	38	$	242	$	277

See accompanying notes to the unaudited condensed consolidated financial statements.

Enstar Group Limited | Second Quarter 2024 | Form 10-Q 12

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ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Three Months Ended June 30, 2024 and 2023


	Share Capital (1)
			Preferred Shares			Treasury Shares
	Voting Ordinary Shares			Series D		Series E		Series C Preferred Shares		JSOP		APIC		AOCI		Retained Earnings		Total Enstar Shareholders' Equity		NCI		Total Shareholders' Equity
	(in millions of U.S. dollars)
Three Months Ended June 30, 2024
Balance as at March 31, 2024	$	15		$	400	$	110	$	(422)	$	(1)	$	585	$	(364)	$	5,309	$	5,632	$	114	$	5,746
Net income attributable to Enstar or noncontrolling interests	—			—		—		—		—		—		—		135		135		1		136
Dividends on preferred shares	—			—		—		—		—		—		—		(9)		(9)		—		(9)

Amortization of share-based compensation	—			—		—		—		—		8		—		—		8		—		8
Acquisition of noncontrolling shareholders' interest in subsidiary	—			—		—		—		—		—		—		—		—		(6)		(6)

Other comprehensive income, net of tax	—			—		—		—		—		—		7		—		7		—		7
Other	—			—		—		—		—		(2)		—		—		(2)		—		(2)
Balance as at June 30, 2024	$	15		$	400	$	110	$	(422)	$	(1)	$	591	$	(357)	$	5,435	$	5,771	$	109	$	5,880

Three Months Ended June 30, 2023
Balance as at March 31, 2023	$	16		$	400	$	110	$	(422)	$	(1)	$	440	$	(496)	$	4,830	$	4,877	$	7	$	4,884
Net income attributable to Enstar or noncontrolling interests (excludes redeemable non controlling interests)	—			—		—		—		—		—		—		30		30		1		31
Dividends on preferred shares	—			—		—		—		—		—		—		(9)		(9)		—		(9)

Amortization of share-based compensation	—			—		—		—		—		8		—		—		8		—		8
Acquisition of noncontrolling shareholders' interest in subsidiary	—			—		—		—		—		—		—		—		—		(1)		(1)
Other comprehensive income, net of tax	—			—		—		—		—		—		8		—		8		—		8
Other	—			—		—		—		—		(1)		—		—		(1)		4		3
Balance as at June 30, 2023	$	16		$	400	$	110	$	(422)	$	(1)	$	447	$	(488)	$	4,851	$	4,913	$	11	$	4,924

(1) Series C non-voting convertible shares, Series E non-voting convertible shares and Series C convertible participating non-voting shares were excluded from these tables as all amounts were less than $1 million.

See accompanying notes to the unaudited condensed consolidated financial statements.

Enstar Group Limited | Second Quarter 2024 | Form 10-Q 13

Table of Contents

ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Six Months Ended June 30, 2024 and 2023


	Share Capital (1)
			Non-voting Convertible Ordinary Shares		Preferred Shares					Treasury Shares
	Voting Ordinary Shares		Series C			Series D		Series E			Series C Preferred Shares		JSOP		APIC		AOCI		Retained Earnings	Total Enstar Shareholders' Equity	NCI	Total Shareholders' Equity
	(in millions of U.S. dollars)
Six Months Ended June 30, 2024
Balance as at December 31, 2023	$	15	$	—		$	400	$	110		$	(422)	$	(1)	$	579	$	(336)	$

Enstar Group LTD [ESGRO] Filings
Enstar Group LTD [ESGR] Filings
Enstar Group LTD [ESGRP] Filings
10-Q	[2024-07-31]
10-Q	[2024-05-02]
10-K	[2024-02-22]
10-Q	[2023-11-07]
10-Q	[2023-08-02]
10-Q	[2023-05-04]
10-K	[2023-03-01]
10-Q	[2022-11-03]
10-Q	[2022-08-09]
10-Q	[2022-05-05]
10-K	[2022-02-24]
10-Q	[2021-11-04]
10-Q	[2021-08-05]
10-Q	[2021-05-07]
10-K	[2021-03-01]
10-Q	[2020-11-06]
10-Q	[2020-08-10]
10-Q	[2020-05-07]
10-K	[2020-02-27]
10-Q	[2019-11-07]
10-Q	[2019-08-06]
10-Q	[2019-05-08]
10-K	[2019-03-01]
10-Q	[2018-11-08]
10-Q	[2018-08-02]
10-Q	[2018-05-08]
10-K	[2018-02-28]
10-Q	[2017-11-08]
10-Q	[2017-08-03]
10-Q	[2017-05-08]
10-K	[2017-02-27]
10-Q	[2016-11-08]
10-Q	[2016-08-05]
10-Q	[2016-05-06]
10-K	[2016-02-29]
10-Q	[2015-11-09]
10-Q	[2015-08-07]
10-Q	[2015-05-11]
10-K	[2015-03-02]
10-Q	[2014-11-10]
10-Q	[2014-08-11]
10-Q	[2014-05-09]
10-K	[2014-03-03]
10-Q	[2013-11-07]
10-Q	[2013-08-09]
10-Q	[2013-05-10]
10-K	[2013-03-01]
10-Q	[2012-11-08]
10-Q	[2012-08-02]
10-Q	[2012-05-04]
10-K	[2012-02-24]

Enstar Group LTD [ESGRO] Filings

Enstar Group LTD [ESGR] Filings

Enstar Group LTD [ESGRP] Filings