The counterparty to the $350mn ILS legacy deal struck by Enstar that was disclosed in July was AlphaCat, Insurance Insider ILS has learned.
The deal was disclosed by Enstar with no named ILS counterparty in its Q2 earnings release, noting the carrier would reinsure certain 2019 and 2020 business written by an ILS platform.
Enstar received $350mn in premium for the AlphaCat portfolio.
The deal will have freed up capital trapped by the ILS platform against possible loss development, according to the parameters of buffer loss tables set in the 2019 and 2020 ILS transactions.
The ILS market has exploited hard market negotiations in the past couple of years to tighten buffer loss thresholds, wordings on trust agreements and time clauses in favour of investors. The development was welcome after years of capital trapping according to conservative buffer loss parameters, which was taking a heavy toll on investor sentiment toward the ILS asset class.
However, legacy solutions have also been sought in order to clear up remaining assets linked to older-year portfolios.
The AlphaCat platform was acquired by RenaissanceRe as part of its $3bn takeover of Validus Re from AIG in May 2023.
In February of this year, RenRe noted in its FY 2023 10-K disclosure that substantially all AlphaCat funds had received full redemption notices from their investors ahead of the acquisition.
AlphaCat’s assets under management (AuM) stood at $3.1bn as of 31 December, 2022, per AIG’s Q4 2022 disclosure.
Enstar’s legacy deal covering the AlphaCat business closed on 25 July.
RenRe and Enstar declined to comment.