AM Best assigns Enstar subsidiary Cavello Bay A rating

By Isha Marathe

March 7 - (The Insurer) - AM Best has assigned a financial strength rating of A and a long-term issuer credit rating of “a-plus” to Enstar subsidiary Cavello Bay Reinsurance Limited.

Cavello Bay, a Class 3B reinsurer, is Enstar's primary non-life run-off consolidator.

The ratings, which have been given a stable outlook, reflect Cavello Bay’s "very strong" balance sheet strength. The ratings also reflect its strong operating performance, favourable business profile and appropriate enterprise risk management.

As a part of Enstar's 2024 acquisition by Sixth Street, AM Best has reviewed the group’s prospective capital actions and believes its balance sheet strength should remain at the current level throughout the close of the transaction and the remainder of 2025.

Enstar CFO Matt Kirk said the rating reflects the company's "established standing in the global legacy market and is further confirmation of our strong capital position and the resilience of our business model".

"The 'A' rating for Cavello Bay, our primary Bermuda reinsurer, affirms our commitment to insurance ratings and will enhance our ability to structure insurance transactions that support the strategic objectives of our partners," he added.

Should Enstar’s balance sheet strength deviate materially from its provided plans, AM Best said it would revise the ratings of Cavello Bay.

Enstar's Sixth Street acquisition, which was “overwhelmingly” approved by its shareholders in a $5.1 billion deal, is expected to close in mid-2025.

Enstar offers capital release solutions through its network of group companies in Bermuda, the US, the UK, Continental Europe, Australia, and other international locations. It has acquired more than 120 companies and portfolios since its formation in 2001.