Markel Group and Enstar Enter Adverse Development Cover Reinsurance Agreement
Markel Group Inc. (NYSE: MKL) has announced an adverse development cover (ADC) reinsurance agreement with Enstar to manage its run-off global reinsurance business and certain exited insurance lines for underwriting years 2025 and prior. The deal involves $4.8 billion in subject reserves, with Markel retaining the first $2.6 billion and retroceding $2.3 billion to Enstar via its subsidiary, Cavello Bay Reinsurance Limited. Under the terms of the agreement, Markel will pay a $120 million risk premium to obtain $1.2 billion in adverse loss development coverage above the subject reserves. The transaction is intended to provide financial certainty and allow Markel to focus on growing its core specialty insurance business. Management expects the net impact on fourth-quarter underwriting results to be immaterial. The deal is subject to regulatory approval and is expected to close by the end of the fourth quarter of 2026. Markel will maintain control over claims throughout the process.
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Topics: adverse development cover reinsurance risk management run-off business