Richmond, Va. – October 29, 2026 -- Markel Insurance has agreed to retrocede $2.3 billion of run-off reserves to Enstar under an adverse development cover (ADC) reinsurance agreement. The deal also gives Markel $1.2 billion of protection against reserve deterioration. Markel Insurance is the insurance arm of Markel Group Inc. (NYSE: MKL).
Markel retains the first $2.6 billion of $4.8 billion in subject reserves
The agreement covers subject reserves of $4.8 billion. Markel keeps the first $2.6 billion and passes the next $2.3 billion to Enstar. Markel will pay Enstar a risk premium of $120 million for the adverse loss development cover, which sits above the $4.8 billion of subject reserves.
The reserves cover underwriting years 2025 and prior in Markel's Global Reinsurance division. They also cover exited lines within its global insurance operations: risk-managed professional liability, architects and engineers, and other run-off business. Markel keeps control of claims.
Markel expects an immaterial fourth-quarter underwriting impact
The added protection reduces the prudency management needs to build into its best estimate of ultimate losses. Markel therefore expects the net effect on fourth-quarter underwriting results to be immaterial.
Enstar's Cavello Bay Reinsurance will carry the risk
Cavello Bay Reinsurance Limited, Enstar's wholly owned subsidiary, will provide the cover. The reinsurer holds an S&P 'A' financial strength rating.
Simon Wilson, CEO of Markel Insurance, said the deal adds "additional certainty" as the liabilities run off and lets the company focus on growing its core specialty insurance business.
Closing depends on regulatory approval by end of 2026
Closing is subject to regulatory approval and other customary conditions. Markel expects it by the end of the fourth quarter of 2026. Markel lists failure or delay in obtaining approval, unmet closing conditions, termination of the agreement and adverse development of the subject reserves among the risks.