Enstar's Cavello Bay covers $2.3 billion of Markel run-off reserves

Enstar Group's Cavello Bay Reinsurance unit will reinsure the last-to-pay $2.3 billion of reserves inside a $4.8 billion Markel run-off portfolio, receiving $2.4 billion in consideration under an adverse development cover.

The transaction, reported by Royal Gazette Bermuda Re, covers Markel's run-off global reinsurance portfolio and certain discontinued lines within its insurance operations, for underwriting years 2025 and prior. Markel retains the first $2.6 billion of the $4.8 billion of subject reserves and keeps administrative and claims-handling responsibility.

For investors comparing legacy-transfer risk with catastrophe bonds, this deal is prior-year reserve risk, not event risk. Enstar's layer attaches only after Markel's $2.6 billion retention is exhausted, and any losses would arrive as prior-year strengthening rather than as a storm or earthquake.

Above the $4.8 billion, Enstar provides a further $1.2 billion of adverse development cover.

Enstar CEO Dominic Silvester said the agreement "will give Markel greater certainty over its legacy liabilities as it focuses on growing its core specialty insurance business."

Cavello Bay's $2.3 billion loss portfolio transfer with Axis Capital featured in AM Best's September rating rationale on that carrier, as Private Wealth Daily previously reported.

Insurance Advisory Partners LLC advised Enstar on the transaction. Aon acted as reinsurance broker and adviser to Markel. Completion is expected by the end of the fourth quarter of 2026, subject to regulatory approval and other customary closing conditions.