Markel Insurance has agreed to transfer part of a $4.8 billion portfolio of legacy reserves to Enstar and obtain additional protection against adverse claims development. The Markel reinsurance deal is expected to close by the end of 2026, subject to regulatory approval and other conditions.

Key Takeaways

  • Enstar will reinsure the last-to-pay $2.3 billion of reserves and provide $1.2 billion of additional cover.
  • Markel will retain claims handling and expects an immaterial fourth-quarter underwriting impact.
  • The portfolio covers underwriting years 2025 and earlier.

How the Markel reinsurance deal works

The agreement, announced October 28, 2026, covers Markel’s run-off global reinsurance business and certain discontinued insurance lines. Run-off business consists of existing obligations rather than new policies being written.

Markel will retain the first $2.6 billion of the subject reserves, while Enstar subsidiary Cavello Bay Reinsurance will reinsure the last-to-pay $2.3 billion. Enstar will also provide $1.2 billion of adverse development cover above the $4.8 billion portfolio, protecting against specified additional losses if claims develop unfavorably.

Enstar said it will receive $2.4 billion in consideration for reinsuring the reserve layer. Markel said it will pay Enstar a $120 million risk premium. Markel will keep administrative and claims-handling responsibilities.

Portfolio scope and expected earnings effect

The reserves include business written by Markel’s Global Reinsurance division and exited lines including risk-managed professional liability and architects and engineers coverage.

In its description of the expected underwriting impact, Markel said the added coverage reduces the prudence management requires in its best estimate of ultimate losses. It expects the transaction’s net impact on fourth-quarter underwriting results to be immaterial; that is an expectation, not a reported result.

Markel previously sold its reinsurance renewal rights to Nationwide as it exited the market. The new agreement addresses liabilities from earlier underwriting years while Markel focuses on its specialty insurance business.

Next milestone

The next milestone is the expected closing by the end of the fourth quarter of 2026, subject to regulatory approval and other customary conditions.

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