Enstar Group Ltd (ESGR) 2024 Q1 法說會逐字稿

Hello, everyone. I'm Peter Kalaev, Group Treasurer. Thank you for listening to Enstar's first-quarter 2024 earnings audio review with CEO, Dominic Silvester; and CFO, Mac Kirk.

大家好。我是集團財務主管彼得‧卡拉耶夫。感謝您收聽 Enstar 執行長 Dominic Silvester 的 2024 年第一季收益音訊回顧；和財務長麥克柯克。

Before we begin, I'd like to remind everyone that this presentation contains forward-looking statements and non-GAAP financial measures. Forward-looking statements in this presentation include, but are not limited to, statements about Enstar's expectations for future and pending transactions, run-off liability earnings, the performance of its investment portfolio, and the impact of changing interest rates on Enstar's business.

在開始之前，我想提醒大家，本簡報包含前瞻性陳述和非公認會計準則財務指標。本簡報中的前瞻性陳述包括但不限於有關 Enstar 對未來和未決交易的預期、徑流負債收益、投資組合績效以及利率變動對 Enstar 業務影響的陳述。

These statements are inherently subject to risks uncertainties and assumptions that may cause actual results to differ materially from the statements being made as of the date of this update or in the future. Additional information regarding these statements and our non-GAAP financial measures is outlined in a text that appears below the link to this recording.

這些陳述本質上受到風險不確定性和假設的影響，可能導致實際結果與截至本更新之日或未來的陳述有重大差異。有關這些報表和我們的非公認會計準則財務指標的更多資訊在本記錄連結下方的文本中概述。

With that, I will turn it over to Dominic.

這樣，我就把它交給多明尼克了。

Thank you, Peter. After a strong end to 2023, we maintained our momentum into the first quarter. We delivered solid results from our investment portfolio and generated positive performance from our one-off liability earnings. This led to a return on equity of 2.4% and growth in book value per share of 1.7%. Matt will cover our financial performance in more detail shortly. But in summary, the results reflect continued progress against our strategy as we stay focused on meeting the growing risk management needs of the reinsurance sector and creating long-term value for our shareholders.

謝謝你，彼得。在 2023 年強勁結束後，我們在第一季保持了這一勢頭。我們的投資組合取得了堅實的業績，並從一次性負債收益中取得了積極的業績。這導致股本回報率達到 2.4%，每股帳面價值成長 1.7%。馬特很快就會更詳細地介紹我們的財務表現。但總而言之，結果反映了我們的策略不斷取得進展，因為我們始終專注於滿足再保險行業日益增長的風險管理需求並為股東創造長期價值。

Turning to some strategic highlights. Following the end of the quarter, we announced a loss portfolio transfer agreement with SiriusPoint to reinsure $400 million of workers' compensation business for the underwriting years 2018 through 2023. SiriusPoint will cede net reserves of approximately $400 million, and Enstar will provide $200 million of cover in excess of the ceded reserves.

轉向一些戰略亮點。本季末後，我們宣布與 SiriusPoint 達成損失組合轉讓協議，為 2018 年至 2023 年承保年度的 4 億美元工人賠償業務進行再保險。SiriusPoint 將割讓約 4 億美元的淨儲備金，Enstar 將提供超出割讓儲備金的 2 億美元。

This transaction expands our industry-leading workers' compensation line of business, one of our largest and one where we have deep experience and proven success in managing. Further it is another example of Enstar versatility in providing bespoke legacy and strategic solutions for our partners.

這項交易擴大了我們行業領先的工人賠償業務範圍，這是我們最大的業務範圍之一，我們在管理方面擁有豐富的經驗和成功的經驗。此外，這是 Enstar 為我們的合作夥伴提供客製化傳統和策略解決方案的多功能性的另一個例子。

Our strong capital position was endorsed by S&P during the quarter as our primary reinsurer, Cavello Bay, was assigned an insurer financial strength rating of A with stable outlook. S&P recognized our status as a leader in the legacy market while citing our world-class claims management capabilities. The rating was a welcome validation of the resilience of our business model, and we believe it will provide us with additional flexibility to structure future legacy transactions.

我們強大的資本狀況在本季度得到了標準普爾的認可，我們的主要再保險公司 Cavello Bay 被授予 A 級保險公司財務實力評級，前景穩定。標準普爾認可了我們作為傳統市場領導者的地位，同時讚揚了我們世界一流的索賠管理能力。該評級是對我們業務模式彈性的認可，我們相信它將為我們提供額外的靈活性來建立未來的遺留交易。

We remain optimistic about the continuing growth of our pipeline of M&A opportunities but maintain our highly disciplined approach to ensure we continue to deliver attractive risk-adjusted return for Enstar and our shareholders. We remain mindful of the persistent macro and geopolitical challenges and continue to take them into account as we pursue growth. In summary, we've had a good start to the year and look forward to taking advantage of opportunities across our business through 2024.

我們對併購機會的持續成長保持樂觀，但仍保持高度紀律的方法，以確保我們繼續為 Enstar 和我們的股東提供有吸引力的風險調整回報。我們仍然關注持續存在的宏觀和地緣政治挑戰，並在追求成長時繼續將其考慮在內。總而言之，我們今年開了個好頭，並期待在 2024 年之前充分利用我們業務中的機會。

Over to you, Matt.

交給你了，馬特。

Thanks, Dominic. With a positive first quarter recording $190 million of net income attributable to Enstar ordinary shareholders with a return on equity or ROE of 2.4% and adjusted ROE of 2.6%. Adjusted ROE is a performance measure that primarily excludes net realized gains and losses and fair value changes on fixed maturity investments and funds held, which we previously called unrealized gains and losses in the income statement.

謝謝，多米尼克。第一季度，歸屬於 Enstar 普通股股東的淨利潤為 1.9 億美元，股本回報率或 ROE 為 2.4%，調整後的 ROE 為 2.6%。調整後股本回報率是一項績效衡量指標，主要不包括固定期限投資和持有基金的已實現淨損益以及公允價值變動，我們之前在損益表中將其稱為未實現損益。

In addition, we continued to deliver on our history of strong book value accretion. We grew book value by 1.7% and fully diluted book value per share growth by 1.4% to $349.41 and $341.53 respectively. First-quarter results were largely driven by positive total investment returns of $222 million. We generated $160 million of net investment income due to the considerations received from the QBE, RACQ and AIG transactions, as well as our existing fixed income portfolio, which includes floating rate assets tied to SOFR with interest rates currently above 5%.

此外，我們持續保持帳面價值強勁成長的歷史。我們的帳面價值成長了 1.7%，完全攤薄後每股帳面價值成長了 1.4%，分別達到 349.41 美元和 341.53 美元。第一季業績主要得益於 2.22 億美元的總投資回報。由於 QBE、RACQ 和 AIG 交易以及我們現有的固定收益投資組合（其中包括與 SOFR 掛鉤、目前利率高於 5% 的浮動利率資產）收到的對價，我們產生了 1.6 億美元的淨投資收入。

We also experienced favorable returns on our other investments, including non-core equity of $104 million, primarily driven by continued strong global equity market performance and the tightening of high-yield and leveraged loan credit spreads. Our cumulative unrealized loss in other comprehensive income at fair value changes in our fixed maturity portfolio at funds held stands at $789 million, which has adversely impacted book value by approximately $54 per share. As these assets provide liquidity for the settlement of our claims liabilities, we generally hold them to maturity with a view that the unrealized losses and fair value changes will naturally reverse as the securities approach maturity.

我們的其他投資也獲得了良好的回報，包括 1.04 億美元的非核心股權，這主要是由於全球股市表現持續強勁以及高收益和槓桿貸款信用利差收緊所致。我們持有的固定期限投資組合中以公允價值變動計算的其他綜合收益累計未實現損失為 7.89 億美元，這對每股帳面價值產生了約 54 美元的不利影響。由於這些資產為我們的索賠負債的結算提供流動性，我們通常將其持有至到期日，以期隨著證券臨近到期，未實現損失和公允價值變動將自然逆轉。

We recorded runoff liability earnings or RLE of $24 million, driven primarily from favorable claims experience across a number of classes, including general liability, asbestos, professional indemnity, and director and officer lines of business. Partially offsetting this was adverse development in our environmental and casualty lines of business, driven by a small number of larger losses on excess policies across multiple portfolios. Consistent with prior years, most of our annual reserve reviews occur in the fourth quarter, and this is where we have historically seen the largest movements in our RLE and adjusted RLE metrics.

我們記錄的徑流責任收益或 RLE 為 2,400 萬美元，這主要得益於多個類別的良好索賠經驗，包括一般責任、石棉、專業賠償以及董事和高階主管業務範圍。我們的環境和傷亡業務的不利發展部分抵消了這一影響，這是由多個投資組合中的少數超額保單造成的較大損失所推動的。與往年一樣，我們的大部分年度儲備審查發生在第四季度，這是我們歷來看到 RLE 和調整後的 RLE 指標變動最大的地方。

Our capital and liquidity position remains strong to support future transactions. Our $800 million revolving credit agreement remains fully unutilized and available to us as of March 31. We continue to maintain a solid group solvency ratio after allocating to recent transactions, and we closed Q1 with an estimated group capital solvency ratio of 195%.

我們的資本和流動性狀況仍然強勁，可以支持未來的交易。截至 3 月 31 日，我們的 8 億美元循環信貸協議仍未完全使用，可供我們使用。在分配近期交易後，我們繼續保持穩健的集團償付能力比率，第一季結束時，我們預計集團資本償付能力比率為 195%。

In conclusion, we continue to execute on our core strategy of delivering attractive and innovative legacy solutions to first-class partners across the globe. We maintain our disciplined approach toward acquiring and completing profitable legacy solutions and our best-in-class team of experts remain well positioned to take advantage of our robust pipeline and create additional long-term value for our shareholders.

總而言之，我們繼續執行我們的核心策略，為全球一流的合作夥伴提供有吸引力和創新的傳統解決方案。我們保持嚴格的方法來獲取和完成可獲利的遺留解決方案，並且我們一流的專家團隊仍然處於有利位置，可以利用我們強大的管道並為股東創造額外的長期價值。

Thank you for your time and your continued interest in Enstar.

感謝您抽出時間以及對 Enstar 的持續關注。