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Enstar earnings slide

Enstar Group Ltd's net income plunged by more than two thirds on investment losses.

The Bermuda-based insurer, which specialises in buying companies or units that have stopped writing new business and managing their assets and ongoing obligations, made $14.5 million in net income for the April-through-July quarter.

The earnings broke down to 75 cents per share and compared to $51.8 million, or $2.68 per share, in the corresponding quarter of last year.

For the first six months of this year, Enstar made net earnings of $59.4 million, compared to $81.4 million in 2014.

Net premiums earned were flat during the second quarter at $212 million, compared to $217 million in 2014.

The net realised and unrealised investment loss of $11.25 million, compared to a gain of $38.4 million in the prior-year period was the principal reason Enstar's earnings fell.

Many Bermuda insurers have suffered mark-to-market losses on fixed-income investment holdings as interest rates rose in the second quarter.

Enstar's shareholders' equity has climbed by nearly $100 million this year, from $2.305 billion at the end of 2014 to $2.399 billion at June 30.

During the second quarter, Enstar completed the acquisition of two Delaware-based subsidiaries of Bermuda-based life reinsurer Wilton Re for $173.1 million.

Enstar said the first instalment of $89.1 million was paid on closing and was financed in part by borrowings. The second instalment of $83.9 million, due on the first anniversary of closing — May 5 next year — is expected to be funded from cash on hand.

Enstar: Earnings plunged on investment losses

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Published August 10, 2015 at 9:00 am (Updated August 09, 2015 at 8:13 pm)

Enstar earnings slide

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