A reinsurance agreement with Markel Group will not affect the credit ratings of Enstar Group subsidiary Cavello Bay Reinsurance, AM Best has reported.

Bermudian-based Enstar last week entered an agreement with Markel to reinsure Markel’s global reinsurance reserves and certain exited lines within its insurance operations, including 2025 and prior underwriting years, within a $4.8 billion portfolio.

Markel will retain the first $2.6 billion, ceding the next $2.3 billion to Enstar on a last-to-pay basis. Enstar will receive $2.4 billion to assume the reserves from Markel and will also provide $1.2 billion of adverse development cover, attaching above the $4.8 billion in reserves.

AM Best said in a statement that it does not expect Enstar’s balance sheet strength or its risk-adjusted capitalisation measured by the Best’s capital adequacy ratio to materially deviate from the projected BCAR score at 99.6 per cent value-at-risk for 2026.

The transaction is expected to close by the end of fourth-quarter 2026 and is subject to regulatory approval and satisfaction of customary conditions precedent to closing the deal.

Enstar is the largest global consolidator of re/insurance liabilities in the market with $19.9 billion assets and $12.3 billion insurance liabilities and more than 130 transactions executed.