Enstar Group LTD - Quarter Report: 2023 September (Form 10-Q)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

Commission File Number 001-33289

ENSTAR GROUP LIMITED

(Exact name of Registrant as specified in its charter)


BERMUDA			N/A
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

Windsor Place, 3rd Floor, 22 Queen Street, Hamilton HM JX, Bermuda

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (441) 292-3645

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Ordinary shares, par value $1.00 per share	ESGR	The NASDAQ Stock Market	LLC
Depositary Shares, Each Representing a 1/1,000th Interest in a 7.00%	ESGRP	The NASDAQ Stock Market	LLC
Fixed-to-Floating Rate Perpetual Non-Cumulative Preferred Share, Series D, Par Value $1.00 Per Share
Depositary Shares, Each Representing a 1/1,000th Interest in a 7.00%	ESGRO	The NASDAQ Stock Market	LLC
Perpetual Non-Cumulative Preferred Share, Series E, Par Value $1.00 Per Share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As at November 6, 2023, the registrant had outstanding 16,039,324 voting ordinary shares, par value $1.00 per share.

Table of Contents

Enstar Group Limited

Quarterly Report on Form 10-Q

For the Period Ended September 30, 2023

Table of Contents


		Page
	Glossary of Key Terms	3

PART I

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	8
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	60
Item 1.	Financial Statements	61
Item 4.	Controls and Procedures	111

PART II

Item 1.	Legal Proceedings	112
Item 1A.	Risk Factors	112
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	112
Item 3.	Defaults Upon Senior Securities	112
Item 4.	Mine Safety Disclosures	112
Item 5.	Other Information	112
Item 6.	Exhibits	113

Table of Contents

GLOSSARY OF KEY TERMS



A&E						Asbestos and environmental

Acquisition costs						Costs that are directly related to the successful efforts of acquiring new insurance contracts or renewing existing insurance contracts, and which principally consist of incremental costs such as: commissions, brokerage expenses, premium taxes and other fees incurred at the time that a contract or policy is issued.

ADC						Adverse development cover – A retrospective reinsurance arrangement that will insure losses in excess of an established reserve and provide protection up to a contractually agreed amount.
Adjusted BVPS						Adjusted book value per ordinary share - Non-GAAP financial measure calculated by dividing Enstar ordinary shareholders’ equity by the number of ordinary shares outstanding, adjusted for equity awards granted and not yet vested. See “Non-GAAP Financial Measures” for reconciliation.
Adjusted RLE						Adjusted run-off liability earnings - Non-GAAP financial measure calculated by dividing adjusted prior period development by average adjusted net loss reserves. See “Non-GAAP Financial Measures” for reconciliation.
Adjusted ROE						Adjusted return on equity - Non-GAAP financial measure calculated by dividing adjusted operating income (loss) attributable to Enstar ordinary shareholders by adjusted opening Enstar ordinary shareholders’ equity. See “Non-GAAP Financial Measures” for reconciliation.
Adjusted TIR						Adjusted total investment return - Non-GAAP financial measure calculated by dividing adjusted total investment return by average adjusted total investable assets. See “Non-GAAP Financial Measures” for reconciliation.
AFS						Available-for-sale


Allianz						Allianz SE
AmTrust						AmTrust Financial Services, Inc.
Annualized						Calculation of the quarterly result or year-to-date result multiplied by four and then divided by the number of quarters elapsed within the applicable year-to-date period.
AOCI						Accumulated other comprehensive income


ASC						Accounting Standards Codification
ASU						Accounting Standards Update
Arden						Arden Reinsurance Company Ltd.





Atrium						Atrium Underwriting Group Limited
bps						Basis point(s)
BMA						Bermuda Monetary Authority


BSCR						Bermuda Solvency Capital Requirement
BVPS						Book value per ordinary share - GAAP financial measure calculated by dividing Enstar ordinary shareholders’ equity by the number of ordinary shares outstanding.
Cavello						Cavello Bay Reinsurance Limited, a wholly-owned subsidiary



Citco						Citco III Limited
CLO						Collateralized loan obligation





Core Specialty						Core Specialty Insurance Holdings, Inc.

DCo						DCo LLC

Defendant A&E liabilities						Defendant asbestos and environmental liabilities - Non-insurance liabilities relating to amounts for indemnity and defense costs for pending and future claims, as well as amounts for environmental liabilities associated with properties.
DCA						Deferred charge asset - The amount by which estimated ultimate losses payable exceed the consideration received at the inception of a retroactive reinsurance agreement and that are subsequently amortized over the estimated loss settlement period.



DGL						Deferred gain liability - The amount by which consideration received exceeds estimated ultimate losses payable at the inception of a retroactive reinsurance agreement and that are subsequently amortized over the estimated loss settlement period.


EB Trust						Enstar Group Limited Employee Benefit Trust

Table of Contents

GLOSSARY OF KEY TERMS


Enhanzed Re						Enhanzed Reinsurance Ltd.
Enstar						Enstar Group Limited and its consolidated subsidiaries
Enstar Finance						Enstar Finance LLC

Exchange Transaction						The exchange of a portion of our indirect interest in Northshore for all of the Trident V Funds’ indirect interest in StarStone U.S.
FAL						Funds at Lloyd's - A deposit in the form of cash, securities, letters of credit or other approved capital instrument that satisfies the capital requirement to support the Lloyd's syndicate underwriting capacity.


Funds held						The account created with premium due to the reinsurer pursuant to the reinsurance agreement, the balance of which is credited with investment income and losses paid are deducted.
Funds held by reinsured companies						Funds held, as described above, where we receive a fixed crediting rate of return or other contractually agreed return on the assets held.
Funds held - directly managed						Funds held, as described above, where we receive the actual investment portfolio return on the assets held.
Future policyholder benefits						The liability relating to life reinsurance contracts, which are based on the present value of anticipated future cash flows and mortality rates.



Gate or side-pocket						A gate is the ability to deny or delay a redemption request, whereas a side-pocket is a designated account for which the investor loses its redemption rights.

IBNR						Incurred but not reported - The estimated liability for unreported claims that have been incurred, as well as estimates for the possibility that reported claims may settle for amounts that differ from the established case reserves as well as the potential for closed claims to re-open.



Investable assets						The sum of total investments, cash and cash equivalents, restricted cash and cash equivalents and funds held
JSOP						Joint Share Ownership Plan
LAE						Loss adjustment expenses





Lloyd's						This term may refer to either the society of individual and corporate underwriting members that pool and spread risks as members of one or more syndicates, or the Corporation of Lloyd’s, which regulates and provides support services to the Lloyd’s market
LOC						Letters of credit
LPT						Loss Portfolio Transfer - Retroactive reinsurance transaction in which loss obligations that are already incurred are ceded to a reinsurer, subject to any stipulated limits

Monument Re						Monument Insurance Group Limited

Morse TEC						Morse TEC LLC



NAV						Net asset value
NCI						Noncontrolling interests


New business						Material transactions, which generally take the form of reinsurance or direct business transfers, or business acquisitions.





Northshore						Northshore Holdings Limited
OLR						Outstanding loss reserves - Provisions for claims that have been reported and accrued but are unpaid at the balance sheet date.
Parent Company						Enstar Group Limited, excluding its consolidated subsidiaries


pp						Percentage point(s)
PPD						Prior period development - Changes to loss estimates recognized in the current calendar year that relate to loss reserves established in previous calendar years.

Private equity funds						Investments in limited partnerships and limited liability companies




QBE						QBE Insurance Group Limited
QTD						Quarter-to-date
RACQ						RACQ Insurance Limited
Reinsurance to close (RITC)						A business transaction to transfer estimated future liabilities attached to a given year of account of a Lloyd's syndicate into a later year of account of either the same or different Lloyd's syndicate in return for a premium.

Table of Contents

GLOSSARY OF KEY TERMS


Reserves for losses and LAE						Management's best estimate of the ultimate cost of settling losses as of the balance sheet date. This includes OLR and IBNR.

Retroactive reinsurance						Contracts that provide indemnification for losses and LAE with respect to past loss events.
RLE						Run-off liability earnings – GAAP-based financial measure calculated by dividing prior period development by average net loss reserves.
RNCI						Redeemable noncontrolling interests
ROE						Return on equity - GAAP-based financial measure calculated by dividing net earnings (loss) attributable to Enstar ordinary shareholders by opening Enstar ordinary shareholders’ equity
Run-off						A line of business that has been classified as discontinued by the insurer that initially underwrote the given risk
Run-off portfolio						A group of insurance policies classified as run-off.


SEC						U.S. Securities and Exchange Commission
SGL No. 1						SGL No. 1 Limited



StarStone International						StarStone's non-U.S. operations
StarStone U.S.						StarStone U.S. Holdings, Inc. and its subsidiaries

Stone Point						Stone Point Capital LLC


TIR						Total investment return - GAAP financial measure calculated by dividing total investment return, including other comprehensive income, for the applicable period by average total investable assets
Trident V Funds						Trident V, L.P., Trident V Parallel Fund, L.P. and Trident V Professionals Fund, L.P.



U.S. GAAP						Accounting principles generally accepted in the United States of America
ULAE						Unallocated loss adjustment expenses - Loss adjustment expenses relating to run-off costs for the estimated payout of the run-off, such as internal claim management or associated operational support costs.
Unearned premium						The unexpired portion of policy premiums that will be earned over the remaining term of the insurance contract.
VIE						Variable interest entities
YTD						Year-to-date
2021 Repurchase Program						An ordinary share repurchase program adopted by our Board of Directors on November 29, 2021, for the purpose of repurchasing a limited number of our ordinary shares, not to exceed $100 million in aggregate. This plan was fully utilized in April 2022.
2022 Repurchase Program						An ordinary share repurchase program authorized by our Board of Directors on May 5, 2022, which was originally effective through May 5, 2023 and authorized the repurchase of a limited number of our ordinary shares, not to exceed $200 million in aggregate. On February 23, 2023, our Board of Directors authorized the repurchase of an additional $105 million of our ordinary shares, and extended the effective date through February 23, 2024. This program was terminated on March 23, 2023.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report and the documents incorporated by reference herein contain statements that constitute "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to our financial condition, results of operations, business strategies, operating efficiencies, competitive positions, growth opportunities, plans and objectives of our management, as well as the markets for our securities and the insurance and reinsurance sectors in general.

Statements that include words such as "estimate," "project," "plan," "intend," "expect," "anticipate," "believe," "would," "should," "could," "seek," "may" and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the federal securities laws or otherwise.

All forward-looking statements are necessarily estimates or expectations, and not statements of historical fact, reflecting the best judgment of our management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements.

These forward looking statements should, therefore, be considered in light of various important factors, including those set forth in this report and in our Annual Report on Form 10-K for the year ended December 31, 2022, which could cause actual results to differ materially from those suggested by the forward-looking statements. These factors include:

•the adequacy of our loss reserves and the need to adjust such reserves as claims develop over time, including due to the impact of emerging claim and coverage issues and disputes that could impact reserve adequacy;

•our acquisitions, including our ability to evaluate opportunities, successfully price acquisitions, address operational challenges, support our planned growth and assimilate acquired portfolios and companies into our internal control system in order to maintain effective internal controls, provide reliable financial reports and prevent fraud;

•increased competitive pressures, including increased competition in the market for acquisitions of run-off business;

•our ability to obtain regulatory approvals, including the timing, terms and conditions of any such approvals, and to satisfy other closing conditions in connection with our acquisition agreements, which could affect our ability to complete acquisitions;

•the variability of statutory capital requirements and the risk that we may require additional capital in the future, which may not be available or may be available only on unfavorable terms;

•our reinsurance subsidiaries may not be able to provide the required collateral to ceding companies pursuant to their reinsurance contracts, including through the use of letters of credit;

•the availability and collectability of our ceded reinsurance;

•the ability of our subsidiaries to distribute funds to us and the resulting impact on our liquidity;

•losses due to foreign currency exchange rate fluctuations;

•climate change and its potential impact on the returns from our run-off business and our investments;

•the value of our investment portfolios and the investment income that we receive from these portfolios may decline materially as a result of market fluctuations and economic conditions, including those related to interest rates, credit spreads and equity prices (including the risk that we may realize losses related to declines in the value of our investments portfolios if we elect to, or are required to, sell investments with unrealized losses);

•the effects of inflation, including its impact on our loss cost trends and operating expenses, and the effects of global economic policy responses to inflation, such as increasing interest rates and their impact on our investment portfolio;

•our ability to structure our investments in a manner that recognizes our liquidity needs;

•our strategic investments in alternative asset classes and joint ventures, which are illiquid and may be volatile;

•our ability to accurately value our investments, which requires methodologies, estimates and assumptions that can be highly subjective, and the inaccuracy of which could adversely affect our financial condition;

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

•the complex regulatory environment in which we operate, including that ongoing or future industry regulatory developments will disrupt our business, affect the ability of our subsidiaries to operate in the ordinary course or to make distributions to us, or mandate changes in industry practices in ways that increase our costs, decrease our revenues or require us to alter aspects of the way we do business;

•loss of key personnel;

•operational risks, including cybersecurity events, external hazards, human failures or other difficulties with our information technology systems that could disrupt our business or result in the loss of critical and confidential information, increased costs;

•tax, regulatory or legal restrictions or limitations applicable to us or the (re)insurance business generally;

•changes in tax laws or regulations applicable to us or our subsidiaries, or the risk that we or one of our non-U.S. subsidiaries become subject to significant, or significantly increased, income taxes in the United States or elsewhere; and

•the ownership of our shares resulting from certain provisions of our bye-laws and our status as a Bermuda company.

The factors listed above should not be construed as exhaustive and should be read in conjunction with the Risk Factors that are included in our Annual Report on Form 10-K for the year ended December 31, 2022. We undertake no obligation to publicly update or review any forward looking statement, whether to reflect any change in our expectations with regard thereto, or as a result of new information, future developments or otherwise, except as required by law.

Table of Contents

PART I — FINANCIAL INFORMATION

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless the context indicates otherwise, the terms "Enstar," "we," "us" or "our" mean Enstar Group Limited and its consolidated subsidiaries.

The following discussion and analysis of our financial condition as of September 30, 2023 and our results of operations for the three and nine months ended September 30, 2023 and 2022 should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes included elsewhere in this quarterly report and the audited consolidated financial statements and notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2022.

Some of the information contained in this discussion and analysis or included elsewhere in this quarterly report, including information with respect to our plans and strategy for our business, includes forward-looking statements that involve risks, uncertainties and assumptions. Our actual results and the timing of events could differ materially from those anticipated by these forward-looking statements as a result of many factors, including those discussed under "Cautionary Statement Regarding Forward-Looking Statements" and Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022.

Table of Contents


Section						Page
Operational Highlights						9
Consolidated Results of Operations — for the Three and Nine Months Ended September 30, 2023 and 2022						11
•Overall Measures of Performance						16
•Underwriting Results						17
•Investment Results						23
•General and Administrative Expenses						28

Non-GAAP Financial Measures						29
Other Financial Measures						38
Results of Operations by Segment — for the Three and Nine Months Ended September 30, 2023 and 2022						40

•Run-off Segment						40
•Assumed Life Segment						42
•Investments Segment						44
•Legacy Underwriting Segment						48
Corporate and Other						49
Current Outlook						51



Liquidity and Capital Resources						53

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 8

Table of Contents

Item 2 | Management's Discussion and Analysis | Operational Highlights

Operational Highlights

Our consolidated results reflect our ongoing provision of capital release solutions to our clients by acquiring and managing seasoned liabilities relating to both their continuing and discontinued portfolios.

Operational highlights for the nine months ended September 30, 2023 include:

Transactions

•In April 2023, certain of our wholly-owned subsidiaries completed a LPT agreement with certain subsidiaries of QBE Insurance Group Limited (“QBE”), relating to a diversified portfolio of business underwritten between 2010 and 2020. Upon closing, a portion of the portfolio currently underwritten via QBE’s Lloyd’s Syndicates 386 and 2999 was reinsured to Enstar’s Syndicate 2008.

As a result of this LPT transaction, we assumed net loss reserves of $2.0 billion in exchange for consideration of $1.9 billion1, and recorded a $179 million deferred charge asset (“DCA”).

•In June 2023, one of our wholly-owned subsidiaries completed an agreement with RACQ Insurance Limited (“RACQ”) to reinsure 80% of RACQ’s motor vehicle Compulsory Third Party (“CTP”) insurance liabilities, covering accident years 2021 and prior.

At closing, we assumed net loss reserves of $179 million in exchange for consideration of $179 million1.

•During the second quarter of 2023, we assumed active claims management control on a 2022 LPT transaction with Argo Group International Holdings, Ltd. (“Argo”) pursuant to terms of the agreement.

Completed Unwind of Enhanzed Re’s Reinsurance Transactions

•In November 2022, our subsidiary Enhanzed Reinsurance Ltd. (“Enhanzed Re”) completed a novation of the reinsurance of a closed block of life annuity policies to Monument Re Limited, a subsidiary of Monument Insurance Group Limited (“Monument Re”).

◦Given our one quarter lag in reporting Enhanzed Re’s results, we recognized a $275 million net gain on novation within other income in the first quarter of 2023, which was comprised of2:

▪the reclassification benefit to income of $363 million from accumulated other comprehensive income (“AOCI”) related to the settlement of the novated future policyholder benefit liabilities;

▪the loss of $39 million on the carrying value of the net assets of $133 million as of the closing date of the transaction in exchange for cash consideration of $94 million; and

▪a deferral of a portion of the net gain to be earned over the settlement period of the novated liabilities, equal to $49 million, for our preexisting 20% ownership interest in Monument Re.

◦Our net earnings attributable to Enstar were further reduced by $81 million, representing the amount attributable to Allianz SE’s (“Allianz”) 24.9% noncontrolling interest in Enhanzed Re at the time of the transaction. In total, first quarter 2023 net earnings attributable to Enstar from this novation transaction were $194 million.

•On December 28, 2022, Enhanzed Re repurchased the entire 24.9% ownership interest Allianz held in Enhanzed Re for $175 million, which was based on the final net book value of Enhanzed Re as of December 31, 2022. Following the repurchase, Enhanzed Re became a wholly-owned subsidiary of Enstar.

•The completion of these transactions resulted in the conclusion of the unwind of Enhanzed Re, achieving an inception to date return from Enhanzed Re of 24%.

1 Refer to Note 2 to our condensed consolidated financial statements for further details, including the composition of consideration received.

2 Refer to “Assumed Life” section for further details.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 9

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Item 2 | Management's Discussion and Analysis | Operational Highlights

Capital Activity

•In March 2023, we repurchased 1,597,712 of our non-voting convertible ordinary shares held by Canada Pension Plan Investment Board (“CPP Investments”) for an aggregate $341 million, representing a price per share of $213.13 and a 5% discount to the trailing 10-day volume weighted average price of our voting ordinary shares at the agreed March 2023 measurement date. The shares comprised all of our outstanding Series C and Series E non-voting ordinary shares.

•In May 2023, we amended and restated our existing revolving credit agreement to increase the total commitments under the revolving credit facility from $600 million to $800 million, with the option to request additional commitments up to an aggregate amount of $200 million. Under the amended facility, we may borrow revolving loans or request the issuance of syndicated or fronted letters of credit.

•In June 2023, we received an upgrade from Standard & Poor’s (“S&P”) on our long-term issuer credit rating to BBB+, with a stable outlook.

•In July 2023, we entered into an $800 million amended and restated letter of credit facility agreement, which replaced our existing $800 million letter of credit facility agreement under which the commitment period was due to expire in August 2023.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 10

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Consolidated Results of Operations - For the Three and Nine Months Ended September 30, 2023 and 2022

Primary GAAP Financial Measures

We use the following GAAP measures to manage the company and monitor our performance:

•Net earnings and net earnings attributable to Enstar ordinary shareholders, which collectively provide a measure of our performance focusing on underwriting, investment and expense results;

•Comprehensive income attributable to Enstar, which provides a measure of the total return, including unrealized gains and losses on fixed maturities, AFS investments, as well as other elements of other comprehensive income;

•Book value per share (“BVPS”), which we use to measure the value of our company over time;

•Return on equity (“ROE”), which measures our profitability by dividing our earnings attributable to Enstar ordinary shareholders by Enstar ordinary shareholders’ equity;

•Total investment return (“TIR”), which measures the rate of return we obtain, both realized and unrealized, on our investments; and

•Run-off liability earnings (“RLE”) and RLE %, which measure both the dollar amount of prior period development on our acquired portfolios (RLE) and the percentage of prior period development relative to average net loss reserves, calculated by dividing our prior period net incurred losses and LAE by our average net loss reserves (RLE %).

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 11

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

The following table sets forth certain condensed consolidated financial information:


	Three Months Ended										Nine Months Ended
	September 30,						$ / pp Change				September 30,							$ / pp Change
	2023			2022						2023				2022
	(in millions of U.S. dollars, except per share data)
Underwriting Results
Net premiums earned	$	14		$	4		$	10			$	29			$	52		$	(23)
Net incurred losses and LAE
Current period	5			13			(8)				18				39			(21)
Prior period	(15)			(141)			126				(35)				(476)			441
Total net incurred losses and LAE	(10)			(128)			118				(17)				(437)			420
Policyholder benefit expenses	—			7			(7)				—				25			(25)
Acquisition costs	—			—			—				6				20			(14)

Investment Results
Net investment income	143			116			27				471				302			169
Net realized losses	(14)			(36)			22				(33)				(111)			78
Net unrealized gains (losses)	20			(546)			566				200				(1,518)			1,718
(Losses) earnings from equity method investments	(3)			(20)			17				22				12			10

Other (expense) income	(2)			(4)			2				280				33			247
Amortization of net deferred charge assets	34			21			13				75				60			15
General and administrative expenses	91			66			25				265				234			31
											$	—
NET EARNINGS (LOSS)	51			(466)			517				609				(1,180)			1,789
Net (earnings) loss attributable to noncontrolling interests	(4)			43			(47)				(99)				74			(173)

NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS	$	38		$	(432)		$	470			$	483			$	(1,133)		$	1,616

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO ENSTAR	$	(35)		$	(499)		$	464			$	242			$	(1,521)		$	1,763

GAAP measures:

ROE	0.9		%	(9.4)		%	10.3		pp		10.8		%		(19.5)		%	30.3		pp
Annualized ROE											14.4		%		(26.0)		%	40.4		pp
RLE											0.3		%		4.0		%	(3.7)		pp
Annualized TIR											4.7		%		(13.0)		%	17.7		pp

Non-GAAP measures:

Adjusted ROE*	2.5		%	(2.5)		%	5.0		pp		10.8		%		(5.2)		%	16.0		pp
Annualized Adjusted ROE*											14.4		%		(6.9)		%	21.3		pp
Adjusted RLE *											0.6		%		1.9		%	(1.3)		pp
Annualized Adjusted TIR*											5.3		%		(1.0)		%	6.3		pp
											As of							$ Change
											September 30, 2023				December 31, 2022
GAAP measure:
BVPS											$	282.37			$	262.24		$	20.13

Non-GAAP measure:
Adjusted BVPS*											$	277.01			$	258.92		$	18.09

pp - Percentage point(s)

*Non-GAAP measure; refer to "Non-GAAP Financial Measures" section for reconciliation to the applicable GAAP financial measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 12

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Overall Results

Three Months Ended September 30, 2023 versus 2022:

Net earnings attributable to Enstar ordinary shareholders for the three months ended September 30, 2023 were $38 million, in comparison to a net loss of $432 million in the comparative quarter, as a result of:

•Favorable total investment returns recognized in earnings of $146 million for the three months ended September 30, 2023, in comparison to a negative total investment return recognized in earnings of $486 million for the comparative quarter, consisting of the aggregate of net investment income, net realized gains (losses), net unrealized gains (losses) and earnings (losses) from equity method investments. The total investment return was driven by:

◦Net realized and unrealized gains on our other investments, including equities of $86 million, in comparison to net realized and unrealized losses in the comparative quarter of $164 million;

◦An increase in net investment income of $27 million, consistent with the increasing investment income we have earned on a sequential quarterly basis, primarily due to reinvestment of fixed maturities at higher yields, deployment of consideration received from deals closed over the past 12 months and the impact of rising interest rates on our fixed maturities securities that are subject to floating interest rates; and

◦Net realized and unrealized losses on our fixed maturities of $80 million for the three months ended September 30, 2023, compared to net realized and unrealized losses on our fixed maturities of $418 million for the three months ended September 30, 2022. The net result for the three months ended September 30, 2023 was favorable on a comparative basis due to the less significant increase in interest rates relative to the comparative quarter.

This was partially offset by:

•A decrease of $126 million in favorable development in net incurred losses and LAE for prior periods in comparison to the three months ended September 30, 2022. Third quarter 2023 net favorable development of $15 million was primarily due to a reduction in our estimates of net ultimate losses and provisions for ULAE of $31 million, partially offset by a $12 million increase in the fair value of our 2017 and 2018 LPT liabilities where we elected the fair value option due to a modest decrease in third quarter 2023 U.K. corporate bond yields based on the mix of the underlying liabilities within such LPTs (which more than offset the impact of a modest increase in non-U.K. corporate bond yields in the same period for non U.K. LPTs). Third quarter 2022 net favorable development of $141 million was primarily due to a reduction in our estimates of net ultimate losses and provisions for ULAE of $63 million and an $82 million reduction in the fair value of liabilities where we elected the fair value option due to an increase in third quarter 2022 global corporate bond yields resulting in higher discount rates. This resulted in RLE of 0.1% for the three months ended September 30, 2023 in comparison to RLE of 1.2% in the comparative quarter.

The above factors contributed to net earnings of $51 million for the three months ended September 30, 2023 as compared to a net loss of $466 million in the comparative quarter, as well as net earnings attributable to Enstar ordinary shareholders of $38 million as compared to net losses attributable to Enstar ordinary shareholders of $432 million in the comparative quarter.

Consequently, our ROE was positive 0.9% in the current quarter as compared to negative (9.4)% for the three months ended September 30, 2022.

Comprehensive loss attributable to Enstar for the three months ended September 30, 2023 was $35 million as compared to $499 million in the comparative quarter. The third quarter 2023 comprehensive loss was primarily due to unrealized losses on fixed maturities, AFS, net of reclassification adjustments, of $82 million, partially offset by net earnings of $51 million. The unrealized losses on our fixed maturities, AFS, combined with our favorable investment results, described above, contributed to a net favorable Annualized TIR of 1.8% for the three months ended September 30, 2023, in comparison to a negative Annualized TIR of (13.1)% in the comparative quarter.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 13

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Nine Months Ended September 30, 2023 versus 2022:

Net earnings attributable to Enstar ordinary shareholders for the nine months ended September 30, 2023 were $483 million, in comparison to a net loss of $1.1 billion in the comparative period, as a result of:

•Favorable total investment returns recognized in earnings of $660 million for the nine months ended September 30, 2023, in comparison to a negative total investment return recognized in earnings of $1.3 billion for the comparative period, consisting of the aggregate of net investment income, net realized gains (losses), unrealized gains (losses) and earnings (losses) from equity method investments. The total investment return was primarily driven by:

◦Net realized and unrealized gains on our other investments, including equities of $295 million, in comparison to net realized and unrealized losses in the comparative period of $468 million, as a result of strong global equity market performance, particularly in the first quarter of 2023, and tightening high yield credit spreads for the nine months ended September 30, 2023, compared to the challenging market environment for the nine months ended September 30, 2022;

◦An increase in net investment income of $169 million, consistent with the increasing investment income we have earned on a sequential quarterly basis, primarily due to reinvestment of fixed maturities at higher yields, deployment of consideration received from deals closed over the past 12 months and the impact of rising interest rates on our fixed maturities that are subject to floating interest rates; and

◦Net realized and unrealized losses on our fixed maturities of $128 million for the nine months ended September 30, 2023, in comparison to net realized and unrealized losses in the comparative period of $1.2 billion. The net result was favorable on a comparative basis due to the less significant increase in interest rates relative to the comparative period.

•An increase in other income of $247 million, largely driven by the first quarter 2023 net gain recognized from the novation of the Enhanzed Re reinsurance of a closed block of life annuity policies.

This was partially offset by:

•A decrease of $441 million in favorable development in net incurred losses and LAE for prior periods in comparison to the prior year comparative period. Year to date 2023 net favorable development of $35 million was primarily due to a reduction in our estimates of net ultimate losses and provisions for ULAE of $72 million, partially offset by a $24 million increase in the fair value of our 2017 and 2018 LPT liabilities where we elected the fair value option predominantly driven by a second quarter 2023 out-of-period adjustment to correct the portion of the change in fair value related to the Instrument-specific credit risk from net incurred losses and LAE to AOCI, which had previously been recorded as a benefit to net incurred losses in 2022. Year to date 2022 net favorable development of $476 million was primarily due to a reduction in our estimates of net ultimate losses and provisions for ULAE of $259 million and a $228 million reduction in the fair value of liabilities where we elected the fair value option due to an increase in global corporate bond yields during the nine months ended September 30, 2022. This resulted in RLE of 0.3% for the nine months ended September 30, 2023 in comparison to RLE of 4.0% in the comparative period; and

•Net earnings attributable to noncontrolling interests of $99 million, in comparison to a net loss of $74 million in the comparative period, as a result of recording the portion of the gain on novation of the Enhanzed Re reinsurance of a closed block of life annuity policies attributable to Allianz’s equity interest in Enhanzed Re.

The above factors contributed to net earnings of $609 million for the nine months ended September 30, 2023 as compared to a net loss of $1.2 billion in the comparative period, as well as net earnings attributable to Enstar ordinary shareholders of $483 million as compared to net losses attributable to Enstar ordinary shareholders of $1.1 billion in the comparative period.

Consequently, our ROE was positive 10.8% for the nine months ended September 30, 2023 as compared to negative (19.5)% for the nine months ended September 30, 2022.

Comprehensive income attributable to Enstar for the nine months ended September 30, 2023 was $242 million as compared to comprehensive net loss of $1.5 billion in the comparative period. Year to date 2023 comprehensive income was primarily due to net earnings of $609 million, partially offset by the reclassification adjustment of $363 million associated with the novation described above and net unrealized losses on our fixed maturities, AFS, net of reclassification adjustments, of $16 million. The unrealized losses on our fixed maturities, AFS, combined with our favorable investment return, described above, contributed to a net favorable Annualized TIR of 4.7% for the nine

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 14

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

months ended September 30, 2023, in comparison to a negative Annualized TIR of (13.0)% in the comparative period.

BVPS and Adjusted BVPS* increased by 7.7% and 7.0%, respectively, from December 31, 2022 to September 30, 2023, primarily due to comprehensive income attributable to Enstar for the nine months ended September 30, 2023, which contributed 5.4% to both BVPS and Adjusted BVPS*, combined with the repurchase of all our non-voting convertible ordinary shares at a discount to year-end book value.

As described above, the significant increase in interest rates over the past two years has contributed to cumulative net unrealized losses of $1.2 billion on our fixed maturities and funds held - directly managed held as of September 30, 2023. This has adversely impacted BVPS by $79.01 per share and Adjusted BVPS* by $77.52 per share as of September 30, 2023.

BVPS and Adjusted BVPS* as of December 31, 2022 reported in this Quarterly Report on Form 10-Q reflect the impact of our adoption of ASU 2018-12, which had the effect of retrospectively increasing such measures by $16.04 and $15.83, respectively, from the amounts reported in our Annual Report on Form 10-K for the year ended December 31, 2022. The higher opening BVPS and Adjusted BVPS* for the year negatively impacted our growth in BVPS and Adjusted BVPS* for the nine months ended September 30, 2023, which would have otherwise been 14.7% and 14.0%, respectively. Our future policyholder benefit liabilities, which were adjusted for the retrospective application of ASU 2018-12, were settled in the fourth quarter of 2022 following the completion of the novation as described above, but the transaction was recognized in the first quarter of 2023 as we report the results of Enhanzed Re on a one quarter lag. Consequently, the adoption of ASU 2018-12 had no impact on our BVPS or Adjusted BVPS* as of September 30, 2023.

Similarly, at the time the repurchase of our non-voting convertible ordinary shares was negotiated, the price represented a 13.0% discount to year-end book value as reported in our Annual Report on Form 10-K for the year ended December 31, 2022. Following the adoption of ASU 2018-12 on a retrospective basis, the price paid in the repurchase transaction represented a 23.0% discount to year-end book value as reported in our Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023.

*Non-GAAP measure; refer to "Non-GAAP Financial Measures" section for reconciliation to the applicable GAAP financial measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 15

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Overall Measures of Performance

BVPS and Adjusted BVPS*


BVPS and Adjusted BVPS* increased by 7.7% and 7.0%, respectively, from December 31, 2022 to September 30, 2023, primarily as a result of comprehensive income attributable to Enstar of $242 million for the nine months ended September 30, 2023 and the repurchase of our non-voting convertible ordinary shares at a discount to year-end book value. The adoption of ASU 2018-12 impacted our BVPS and Adjusted BVPS* as of December 31, 2022, as described above. The cumulative impact of net unrealized losses on our fixed maturities and funds held - directly managed adversely impacted BVPS by $79.01 per share and Adjusted BVPS* by $77.52 per share as of September 30, 2023.

ROE and Adjusted ROE*

Three and Nine Months Ended September 30, 2023 versus 2022: ROE increased by 10.3 and 30.3 pp for the three and nine months ended September 30, 2023 compared to 2022, respectively, primarily due to:

i.decreased net realized and unrealized losses on our fixed maturities for the three and nine months ended September 30, 2023 compared to net losses for the equivalent periods ended September 30, 2022, respectively. This contributed 7.2 and 17.1 pp to the increase in ROE for the three and nine months ended September 30, 2023, respectively;

ii.net realized and unrealized gains on other investments, including equities, for the three and nine months ended September 30, 2023, respectively, compared to net losses for the equivalent periods ended September 30, 2022, respectively. This contributed 5.5 and 14.7 pp to the increase in ROE for the three and nine months ended September 30, 2023, respectively;

iii.increased other income, comprised primarily of the first quarter 2023 gain recognized on the novation of the Enhanzed Re reinsurance of a closed block of life annuity policies, which contributed 5.7 pp to the increase in ROE for the nine months ended September 30, 2023; and

iv.increased net investment income, which contributed 5.4 pp to the increase in ROE for the nine months ended September 30, 2023.

These favorable factors were partially offset by:

v. decreased favorable prior period development, or RLE, which offset the increase in ROE by 2.7 and 7.4 pp for the three and nine months ended September 30, 2023, respectively; and

vi. increased earnings attributable to noncontrolling interests, which offset the increase in ROE by 1.0 and 3.5 pp for the three and nine months ended September 30, 2023, respectively.

Adjusted ROE* increased by 5.0 and 16.0 pp for the three and nine months ended September 30, 2023, respectively, which excludes the impact of net realized and unrealized (losses) gains on our fixed maturities.

*Non-GAAP measure; refer to “Non-GAAP Financial Measures” section for reconciliation to the applicable GAAP financial measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 16

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

We discuss the results of our operations by aggregating certain captions from our condensed consolidated statements of earnings, as we believe it provides a more meaningful view of our results and eliminates repetition that would arise if captions were discussed on an individual basis.

In order to facilitate analysis, we have grouped the discussion into the following captions:

•Underwriting results: includes net premiums earned, net incurred losses and LAE, policyholder benefit expenses and acquisition costs.

•Investment results: includes net investment income, net realized (losses) gains, net unrealized gains (losses) (recorded through the condensed statements of earnings and other comprehensive income) and earnings (losses) from equity method investments.

•General and administrative results: includes general and administrative expenses.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 17

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Underwriting Results

Our strategy is focused on effectively managing (re)insurance portfolios underwritten in previous years that we assume through our provision of capital release solutions and acquisition of portfolios and businesses in run-off.

Although we have largely exited our active underwriting platforms, we still record net premiums earned and the associated current period net incurred losses and LAE and acquisition costs as a result of the run-off of unearned premiums from transactions completed in recent years.

Premiums earned in the Run-off segment are generally offset by the related current period net incurred losses and LAE and acquisition costs.

The components of underwriting results are as follows:


	Three Months Ended September 30,
	2023										2022
	Run-off		Assumed Life		Legacy Underwriting		Corporate and other		Total		Run-off		Assumed Life		Legacy Underwriting		Corporate and other		Total
	(in millions of U.S. dollars)
Net premiums earned	$	14	$	—	$	—	$	—	$	14	$	1	$	2	$	1	$	—	$	4
Net incurred losses and LAE:
Current period	5		—		—		—		5		10		—		3		—		13
Prior periods	(31)		—		—		16		(15)		(61)		—		(2)		(78)		(141)
Total net incurred losses and LAE	(26)		—		—		16		(10)		(51)		—		1		(78)		(128)
Policyholder benefit expenses	—		—		—		—		—		—		7		—		—		7
Acquisition costs	—		—		—		—		—		1		—		(1)		—		—
Underwriting results	$	40	$	—	$	—	$	(16)	$	24	$	51	$	(5)	$	1	$	78	$	125


	Nine Months Ended September 30,
	2023										2022
	Run-off		Assumed Life		Legacy Underwriting		Corporate and other		Total		Run-off		Assumed Life		Legacy Underwriting		Corporate and other		Total
	(in millions of U.S. dollars)
Net premiums earned	$	29	$	—	$	—	$	—	$	29	$	27	$	17	$	8	$	—	$	52
Net incurred losses and LAE:
Current period	18		—		—		—		18		35		—		4		—		39
Prior periods	(72)		—		—		37		(35)		(232)		(29)		2		(217)		(476)
Total net incurred losses and LAE	(54)		—		—		37		(17)		(197)		(29)		6		(217)		(437)
Policyholder benefit expenses	—		—		—		—		—		—		25		—		—		25
Acquisition costs	6		—		—		—		6		18		—		2		—		20
Underwriting results	$	77	$	—	$	—	$	(37)	$	40	$	206	$	21	$	—	$	217	$	444

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 18

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Prior Periods - RLE - Three and Nine Months Ended September 30, 2023 and 2022

The following tables summarize RLE % and Adjusted RLE %* by acquisition year, which management believes is useful in measuring and monitoring performance of our claims management activity on the portfolios that we have acquired. This permits comparability between acquisition years of different loss reserve volumes.

Three Months Ended September 30, 2023:


	Three Months Ended September 30, 2023
	RLE								Adjusted RLE*
Acquisition Year	RLE / PPD		Average net loss reserves		RLE %		Annualized RLE %		Adjusted RLE / PPD*		Average adjusted net loss reserves*		Adjusted RLE %*		Annualized Adj RLE %*
	(in millions of U.S. dollars)
2013 and prior	$	2	$	1,052					$	2	$	1,112
2014	13		397						(10)		69
2015	2		261						2		266
2016	14		638						15		702
2017	(34)		536						(27)		780
2018	2		645						9		727
2019	(5)		986						(3)		1,496
2020	1		425						1		425
2021	8		3,248						31		3,589
2022	12		2,598				1.9	%	12		2,598
2023	—		1,761						—		1,761
Total	$	15	$	12,547	0.1	%	0.5	%	$	32	$	13,525	0.2	%	0.9	%

*Non-GAAP measure; refer to “Non-GAAP Financial Measures” section for reconciliation to the applicable GAAP financial measure.

Our RLE % was 0.1%, or nearly flat, for the three months ended September 30, 2023, as favorable reductions in estimates of net ultimate losses and reductions in provisions for ULAE were partially offset by net unfavorable changes in the fair value of liabilities for which we have elected the fair value option and amortization of fair value adjustments.

Favorable RLE in the 2016 acquisition year was driven by favorable claims development on our professional indemnity/directors and officers line of business.

Adverse RLE in the 2017 acquisition year was driven by $27 million of adverse development on our all other line of business, as a result of identified deterioration on abuse claims, in addition to a $7 million increase in the fair value of liabilities for which we have elected the fair value option as a result of decreases in U.K. corporate bond yields. The corporate bond yields, which form a component of the discount rate used to calculate the fair value of the liabilities, are matched to the original currencies of the underlying loss portfolios, of which GBP is the predominant currency for those portfolios that we have elected to measure at fair value using the fair value option.

Favorable RLE in the 2021 acquisition year was driven by continued favorable claims experience on our workers’ compensation line of business.

Favorable RLE in the 2022 acquisition year was driven by favorable development on our property line of business as a result of favorable claims experience.

Our Adjusted RLE %* was positively impacted by the net reduction in estimates of net ultimate losses and reductions in provisions for ULAE relating to the Run-off segment. It also excludes the unfavorable impact of the changes in the discount rate upon the fair value of liabilities where we have elected the fair value option and the amortization of fair value adjustments relating to purchased subsidiaries.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 19

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Three Months Ended September 30, 2022:


	Three Months Ended September 30, 2022
	RLE								Adjusted RLE*
Acquisition Year	RLE / PPD		Average net loss reserves		RLE %		Annualized RLE %		Adjusted RLE / PPD*		Average adjusted net loss reserves*		Adjusted RLE %*		Annualized Adj RLE %*
	(in millions of U.S. dollars)
2013 and prior	$	8	$	733					$	7	$	658
2014	17		711						4		87
2015	7		308						7		314
2016	3		706						3		778
2017	71		592						4		805
2018	5		840						(9)		932
2019	10		1,139						12		1,672
2020	(13)		600						(13)		600
2021	29		3,892						42		4,338
2022	4		2,651						4		2,651

Total	$	141	$	12,172	1.2	%	4.6	%	$	61	$	12,835	0.5	%	1.9	%

*Non-GAAP measure; refer to “Non-GAAP Financial Measures” section for reconciliation to the applicable GAAP financial measure.

Overall, our RLE % was positively impacted by a reduction of $82 million in the fair value of liabilities for which we have elected the fair value option in the 2017 and 2018 acquisition years as a result of increases in global corporate bond yields.

Favorable development as a result of lower claim activity on our marine, aviation, and transit line of business and favorable claim settlements on our workers’ compensation line of business had a favorable impact on RLE in acquisition year 2019.

Acquisition year 2018 benefited from the favorable development on our marine, aviation and transit and workers’ compensation lines of business similar to our experience with the 2019 acquisition year, with a partially offsetting increase in estimates of net ultimate losses as a result of worse than expected claims experience and adverse development on claims in relation to our general casualty and motor lines of business. This adverse experience also impacted acquisition year 2020.

Acquisition year 2021 benefited from favorable claim settlements on our workers’ compensation line of business, with a partially offsetting adverse impact from worse than expected claims experience on our general casualty line of business.

Our Annualized Adjusted RLE %* was positively impacted by the net reduction in estimates of net ultimate losses, as described above, but excludes the favorable impact of the changes in the discount rate on the fair value of liabilities where we have elected the fair value option.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 20

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Nine Months Ended September 30, 2023:


	Nine Months Ended September 30, 2023
	RLE								Adjusted RLE*
Acquisition Year	RLE / PPD		Average net loss reserves		RLE %		Annualized RLE %		Adjusted RLE / PPD*		Average adjusted net loss reserves*		Adjusted RLE %*		Annualized Adj RLE %*
	(in millions of U.S. dollars)
2013 and prior	$	5	$	847					$	8	$	839
2014	15		524						(13)		62
2015	5		273						6		291
2016	15		654						18		721
2017	(35)		553						(25)		787
2018	(8)		696						12		781
2019	(4)		1,018						(2)		1,535
2020	15		499						15		501
2021	25		3,322						55		3,784
2022	2		2,857						2		2,863
2023	—		840						—		840
Total	$	35	$	12,083	0.3	%	0.4	%	$	76	$	13,004	0.6	%	0.8	%

*Non-GAAP measure; refer to “Non-GAAP Financial Measures” section for reconciliation to the applicable GAAP financial measure.

Our RLE % was 0.3% for the nine months ended September 30, 2023, as favorable reductions in estimates of net ultimate losses and reductions in provisions for ULAE were partially offset by net unfavorable changes in the fair value of liabilities for which we have elected the fair value option and amortization of fair value adjustments.

Favorable RLE in the 2014 acquisition year was driven by favorable movement on our professional indemnity/directors and officers, all other, and marine, aviation and transit lines of business due to favorable claims experience. The favorable RLE was partially offset by adverse development on our general casualty line of business due to reserve strengthening on several portfolios primarily due to a small number of large losses, particularly on excess business, and adverse development on our property line of business due to adverse claims experience.

Favorable RLE in the 2016 acquisition year was driven by favorable claims development on our professional indemnity/directors and officers line of business.

Adverse RLE in the 2017 and 2018 acquisition years was driven by adverse development on our all other line of business, primarily as a result of identified deterioration on abuse claims, and general casualty line of business, primarily due to a small number of large losses across several portfolios, particularly on excess business. The adverse RLE was further impacted by a $24 million increase in the fair value of liabilities for which we have elected the fair value option, predominantly driven by a second quarter 2023 out-of-period adjustment to correct the portion of the change in fair value related to the Instrument-specific credit risk from net incurred losses and LAE to AOCI which had previously been recorded as a benefit to net incurred losses in 2022. The results were partially offset by favorable development on our workers’ compensation and marine, aviation and transit lines of business as a result of continued favorable claims experience.

Favorable RLE in the 2020 acquisition year was driven by a release of $10 million relating to COVID-19 exposures on our general casualty line of business.

Favorable RLE in the 2021 acquisition year was driven by continued favorable claims experience on our workers’ compensation line of business.

Our Adjusted RLE %* was positively impacted by the net reduction in estimates of net ultimate losses and reductions in provisions for ULAE relating to the Run-off segment, as described above. It also excludes the unfavorable impact of the changes in the discount rate on the fair value of liabilities where we have elected the fair value option and the amortization of fair value adjustments relating to purchased subsidiaries.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 21

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Nine Months Ended September 30, 2022:


	Nine Months Ended September 30, 2022
	RLE								Adjusted RLE*
Acquisition Year	RLE / PPD		Average net loss reserves		RLE %		Annualized RLE %		Adjusted RLE / PPD*		Average adjusted net loss reserves*		Adjusted RLE %*		Annualized Adj RLE %*
	(in millions of U.S. dollars)
2013 and prior	$	3	$	769					$	16	$	692
2014	35		766						11		88
2015	8		317						9		324
2016	7		732						15		809
2017	190		724						12		888
2018	47		930						2		1,006
2019	14		1,181						11		1,711
2020	(10)		701						(10)		701
2021	178		4,057						167		4,549
2022	4		1,696						4		1,696

Total	$	476	$	11,873	4.0	%	5.3	%	$	237	$	12,464	1.9	%	2.5	%

*Non-GAAP measure; refer to “Non-GAAP Financial Measures” section for reconciliation to the applicable GAAP financial measure.

Our Annualized RLE % was positively impacted by a reduction of $228 million in the fair value of liabilities for which we have elected the fair value option in the 2017 and 2018 acquisition years as a result of increases in corporate bond yields.

Acquisition year 2020 was adversely impacted by worse than expected claims experience and adverse development on claims in relation to our general casualty and motor lines of business.

Acquisition year 2021 benefited from favorable claim settlements on our workers’ compensation and professional indemnity/directors and officers lines of business and favorable claim activity on the catastrophe book in the Assumed Life segment, which more than offset the adverse impact of worse than expected claims experience on our general casualty line of business.

Our Annualized Adjusted RLE %* was positively impacted by the net reduction in estimates of net ultimate losses reductions in provisions for ULAE relating to the Run-off segment, as described above, but excludes the favorable impact of the changes in the discount rate on the fair value of liabilities where we have elected the fair value option.

*Non-GAAP measure; refer to “Non-GAAP Financial Measures” section for reconciliation to the applicable GAAP financial measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 22

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Investment Results

We strive to structure our investment holdings and the duration of our investments in a manner that recognizes our liquidity needs, including our obligation to pay losses.

The components of our investment results split between our fixed income assets (which includes our short-term and fixed maturities classified as trading and AFS, funds held-directly managed, cash and cash equivalents, including restricted cash and cash equivalents, and funds held by reinsured companies, collectively our “Fixed Income” assets) and other investments (which includes equities and equity method investments and are collectively referred to as our “Other Investments”) are as follows:


	Three Months Ended September 30,
	2023									2022
	Fixed Income			Other Investments			Total			Fixed Income			Other Investments			Total
	(in millions of U.S. dollars)
Net investment income	$	128		$	15		$	143		$	94		$	22		$	116
Net realized losses	(12)			(2)			(14)			(23)			(13)			(36)
Net unrealized (losses) gains	(68)			88			20			(395)			(151)			(546)
Losses from equity method investments	—			(3)			(3)			—			(20)			(20)
Other comprehensive income:
Unrealized losses on fixed maturities, AFS, net of reclassification adjustments, excluding foreign exchange	(63)			—			(63)			(175)			—			(175)
TIR ($)	$	(15)		$	98		$	83		$	(499)		$	(162)		$	(661)
Annualized TIR %	(0.4)		%	8.1		%	1.8		%	(13.3)		%	(12.6)		%	(13.1)		%
Annualized Adjusted TIR %*	3.4		%	8.1		%	4.5		%	2.3		%	(12.6)		%	(1.3)		%


	Nine Months Ended September 30,
	2023									2022
	Fixed Income			Other Investments			Total			Fixed Income			Other Investments			Total
	(in millions of U.S. dollars)
Net investment income	$	409		$	62		$	471		$	239		$	63		$	302
Net realized (losses) gains	(62)			29			(33)			(88)			(23)			(111)
Net unrealized (losses) gains	(66)			266			200			(1,073)			(445)			(1,518)
Earnings from equity method investments	—			22			22			—			12			12
Other comprehensive income:
Unrealized gains (losses) on fixed maturities, AFS, net of reclassification adjustments, excluding foreign exchange	2			—			2			(657)			—			(657)
TIR ($)	$	283		$	379		$	662		$	(1,579)		$	(393)		$	(1,972)
Annualized TIR %	2.7		%	10.3		%	4.7		%	(14.1)		%	(10.0)		%	(13.0)		%
Annualized Adjusted TIR %*	3.6		%	10.3		%	5.3		%	2.0		%	(10.0)		%	(1.0)		%

*Non-GAAP measure; refer to “Non-GAAP Financial Measures” section for reconciliation to the applicable GAAP financial measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 23

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Net Investment Income

The below charts are in millions of U.S. dollars.

Three Months Ended September 30, 2023 versus 2022: Net investment income increased primarily due to:

•an increase in our annualized investment book yield from 2.32% to 3.53% due to a combination of reinvestment of fixed maturities at higher yields, deployment of consideration received from deals closed over the past 12 months and the impact of rising interest rates on the $3.3 billion of our average fixed maturities outstanding during the period that are subject to floating interest rates. Our floating rate investments generated net investment income of $62 million for the three months ended September 30, 2023, an increase of $20 million from the third quarter of 2022, which equates to an increase in the annualized yield of those investments of 168 basis points.

Nine Months Ended September 30, 2023 versus 2022: Net investment income increased primarily due to:

•an increase in our annualized investment book yield from 2.15% to 3.73% due to a combination of reinvestment of fixed maturities at higher yields, deployment of consideration received from deals closed over the past 12 months and the impact of rising interest rates on the $3.2 billion of our average fixed maturities outstanding during the period that are subject to floating interest rates. Our floating rate investments generated net investment income of $181 million for the nine months ended September 30, 2023, an increase of $76 million from the nine months ended September 30, 2022, which equates to an increase in the annualized yield of those investments of 269 basis points.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 24

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Net Realized and Unrealized (Losses) Gains Included in Comprehensive Income

The below charts are in millions of U.S. dollars.


Three Months Ended September 30, 2023 versus 2022: Net realized and unrealized losses included in comprehensive income decreased relative to the prior quarter primarily due to: •a decrease in net realized and unrealized losses on fixed maturities of $450 million, primarily as a result of a comparatively less significant increase in interest rates across U.S., U.K. and European markets for the three months ended September 30, 2023 relative to the prior year quarter; and •net realized and unrealized gains on other investments, including equities, of $86 million for the three months ended September 30, 2023, compared to net losses of $164 million for the comparative quarter. ◦Net gains for the three months ended September 30, 2023 were primarily driven by our private equity funds, private credit funds, CLO equities and fixed income funds, which are typically recorded on a one quarter lag, largely as a result of second quarter 2023 global equity market performance and tightening of high yield credit spreads; in comparison to ◦Net losses for the three months ended September 30, 2022 that were primarily driven by our public equities, private equity funds and hedge funds, largely as a result of global equity market declines and the widening of high yield credit spreads.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 25

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 26

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations


Nine Months Ended September 30, 2023 versus 2022: Net realized and unrealized gains included in comprehensive income increased relative to the prior period net realized and unrealized losses primarily due to: •a decrease in net realized and unrealized losses on fixed maturities of $1.7 billion, as a result of a comparatively less significant increase in interest rates across U.S., U.K. and European markets relative to the prior year period, in addition to a tightening of credit spreads, for the nine months ended September 30, 2023; and •net realized and unrealized gains on other investments, including equities, of $295 million for the nine months ended September 30, 2023, compared to net losses of $468 million for the comparative period. ◦Net gains for the nine months ended September 30, 2023 were primarily driven by our public equities, private equity funds, private credit funds and fixed income funds, largely as a result of strong global equity market performance and tightening high yield credit spreads; in comparison to ◦Net losses for the nine months ended September 30, 2022 were primarily driven by our public equities, fixed income funds, CLO equities and hedge funds, largely as a result of global equity market declines and the widening of high yield credit spreads.

(Losses) earnings from equity method investments

The below charts are in millions of U.S. dollars.

Three Months Ended September 30, 2023 versus 2022: Losses from equity method investments decreased by $17 million, primarily due to $12 million and $4 million decreases in losses from our investments in Monument Re and Core Specialty, respectively, and an increase in earnings from our investment in Citco of $1 million.

Nine Months Ended September 30, 2023 versus 2022: Earnings from equity method investments increased by $10 million, primarily due to earnings of $18 million from our investment in Core Specialty for the nine months ended September 30, 2023 in comparison to losses of $5 million in the comparative period and a $2 million increase in earnings from our investment in Citco. The increase in earnings was partially offset by a $15 million period over period decrease in earnings from our investment in Monument Re.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 27

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Item 2 | Management's Discussion and Analysis | Consolidated Results of Operations

Investable Assets

Investable assets and adjusted investable assets* decreased by 4.8% and 7.3% from December 31, 2022 to September 30, 2023, respectively, primarily due to:

•the novation of the Enhanzed Re reinsurance of a closed block of life annuity policies (and the associated assets of $949 million);

•the impact of net paid losses;

•the repurchase of our non-voting convertible ordinary shares; and

•the settlement of our participation in Atrium’s Syndicate 609 relating to the 2020 and prior underwriting years.

Partially offset by:

•consideration received for the QBE and RACQ LPT transactions; and

•net unrealized gains on our fixed maturities and other investments, including equities.

*Non-GAAP measure; refer to "Non-GAAP Financial Measures" section for reconciliation to the applicable GAAP financial measures.

Duration and average credit rating on fixed maturities and cash and cash equivalents

The fair value, duration and average credit rating of investments by segment is as follows:


	September 30, 2023				December 31, 2022
Segment	Fair Value ($) (1)		Average Duration (in years) (2)	Average Credit Rating (3)	Fair Value ($) (1)		Average Duration (in years) (2)	Average Credit Rating (3)
Investments
Run-off	$	10,334	3.67	A+	$	9,874	4.02	A+
Assumed Life	—		n/a		908		8.90	A-
Total - Investments	10,334		3.67	A+	10,782		4.44	A+
Legacy Underwriting	—		n/a		179		2.26	AA-
Total	$	10,334	3.67	A+	$	10,961	4.40	A+

(1) The fair value of our fixed maturities and cash and cash equivalents by segment does not include the carrying value of cash and cash equivalents within our funds held-directly managed portfolios.

(2) The duration calculation includes cash and cash equivalents, short-term investments and fixed maturities, as well as the fixed maturities and cash and cash equivalents within our funds held-directly managed portfolios.

(3) The average credit ratings calculation includes cash and cash equivalents, short-term investments, fixed maturities and the fixed maturities within our funds held - directly managed portfolios.

The overall decrease in the balance of our fixed maturities and cash and cash equivalents of $627 million when comparing September 30, 2023 to December 31, 2022 was primarily driven by the derecognition of the assets supporting the Enhanzed Re reinsurance of a closed block of life annuity policies that were novated during the first quarter of 2023, the impact of net paid losses, the settlement of our participation in Atrium’s Syndicate 609 relating to the 2020 and prior underwriting years and the repurchase of our non-voting convertible ordinary shares, partially offset by the consideration received in relation to the QBE and RACQ LPT transactions during the second quarter of 2023.

The decrease in the average duration of our fixed maturities and cash and cash equivalents when comparing September 30, 2023 to December 31, 2022 was primarily driven by the consideration received for the QBE and RACQ LPTs, which have a shorter average duration, increases in interest rates and the derecognition of the assets supporting the Enhanzed Re reinsurance of a closed block of life annuity policies that were novated during the first quarter of 2023.

As of both September 30, 2023 and December 31, 2022, our fixed maturities and cash and cash equivalents had an average credit quality rating of A+.

As of September 30, 2023 and December 31, 2022, our fixed maturities that were non-investment grade (i.e. rated lower than BBB- and non-rated securities) comprised $469 million, or 5.0% and $622 million, or 6.5% of our total fixed maturities portfolio, respectively.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 28

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Item 2 | Management's Discussion and Analysis | Non-GAAP Financial Measures

General and Administrative Expenses for the Three and Nine Months Ended September 30, 2023 and 2022

The below charts are in millions of U.S. dollars.

Three Months Ended September 30, 2023 versus 2022: The $25 million increase in general and administrative expenses was primarily driven by salaries and benefits expenses in the current quarter due to the absence of a reduction in expenses recorded in the third quarter 2022 related to financial performance-based long-term incentive costs, driven by the impact of actual declines in financial performance on forecasted financial performance during that period.

Nine Months Ended September 30, 2023 versus 2022: The $31 million increase in general and administrative expenses was primarily driven by salaries and benefits expenses in the current period due to the above referenced absence of a reduction in long-term incentive costs recorded in the third quarter 2022, in addition to increases in bank facility fees.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 29

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Item 2 | Management's Discussion and Analysis | Non-GAAP Financial Measures

Non-GAAP Financial Measures

In addition to our key financial measures presented in accordance with GAAP, we present other non-GAAP financial measures that we use to manage our business, compare our performance against prior periods and against our peers, and as performance measures in our incentive compensation program.

These non-GAAP financial measures provide an additional view of our operational performance over the long-term and provide the opportunity to analyze our results in a way that is more aligned with the manner in which our management measures our underlying performance.

The presentation of these non-GAAP financial measures, which may be defined and calculated differently by other companies, is used to enhance the understanding of certain aspects of our financial performance. It is not meant to be considered in isolation, superior to, or as a substitute for the directly comparable financial measures prepared in accordance with GAAP.

Some of the adjustments reflected in our non-GAAP measures are recurring items, such as the exclusion of adjustments to net realized and unrealized (gains)/losses on fixed maturity investments recognized in our income statement, the fair value of certain of our loss reserve liabilities for which we have elected the fair value option, and the amortization of fair value adjustments.

Management makes these adjustments in assessing our performance so that the changes in fair value due to interest rate movements, which are applied to some but not all of our assets and liabilities as a result of preexisting accounting elections, do not impair comparability across reporting periods.

It is important for the readers of our periodic filings to understand that these items will recur from period to period.

However, we exclude these items for the purpose of presenting a comparable view across reporting periods of the impact of our underlying claims management and investments without the effect of interest rate fluctuations on assets that we anticipate to hold to maturity and non-cash changes to the fair value of our reserves.

Similarly, our non-GAAP measures reflect the exclusion of certain items that we deem to be nonrecurring, unusual or infrequent when the nature of the charge or gain is such that it is not reasonably likely that such item may recur within two years, nor was there a similar charge or gain in the preceding two years. This includes adjustments related to bargain purchase gains on acquisitions of businesses, net gains or losses on sales of subsidiaries, net assets of held for sale or disposed subsidiaries classified as discontinued operations and other items that we separately disclose.

The following table presents more information on each non-GAAP measure. The results and GAAP reconciliations for these measures are set forth further below.

Non-GAAP Measure

Definition

Purpose of Non-GAAP Measure over GAAP Measure

Adjusted book value per ordinary share

Total Enstar ordinary shareholders' equity

Divided by

Number of ordinary shares outstanding, adjusted for:

-the ultimate effect of any dilutive securities on the number of ordinary shares outstanding

Increases the number of ordinary shares to reflect the exercise of equity awards granted but not yet vested as, over the long term, this presents both management and investors with a more economically accurate measure of the realizable value of shareholder returns by factoring in the impact of share dilution.

We use this non-GAAP measure in our incentive compensation program.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 30

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Item 2 | Management's Discussion and Analysis | Non-GAAP Financial Measures

Adjusted return on equity (%)

Adjusted operating income (loss) attributable to Enstar ordinary shareholders divided by adjusted opening Enstar ordinary shareholder's equity

Calculating the operating income (loss) as a percentage of our adjusted opening Enstar ordinary shareholders' equity provides a more consistent measure of the performance of our business by enabling comparison between the financial periods presented.

We eliminate the impact of net realized and unrealized (gains) losses on fixed maturities and funds-held directly managed and the change in fair value of insurance contracts for which we have elected the fair value option, as:

•we typically hold most of our fixed maturities until the earlier of maturity or the time that they are used to fund any settlement of related liabilities which are generally recorded at cost; and

•removing the fair value option improves comparability since there are limited acquisition years for which we elected the fair value option.

Therefore, we believe that excluding their impact on our earnings improves comparability of our core operational performance across periods.

We include fair value adjustments as non-GAAP adjustments to the adjusted operating income (loss) attributable to Enstar ordinary shareholders as they are non-cash charges that are not reflective of the impact of our claims management strategies on our loss portfolios.

We eliminate the net gain (loss) on the purchase and sales of subsidiaries and net earnings from discontinued operations, as these items are not indicative of our ongoing operations.

We use this non-GAAP measure in our incentive compensation program.

Adjusted operating income (loss) attributable to Enstar ordinary shareholders

(numerator)

Net earnings (loss) attributable to Enstar ordinary shareholders, adjusted for:

-net realized and unrealized (gains) losses on fixed maturities and funds held-directly managed,

-change in fair value of insurance contracts for which we have elected the fair value option (1),

-amortization of fair value adjustments,

-net gain/loss on purchase and sales of subsidiaries (if any),

-net earnings from discontinued operations (if any),

-tax effects of adjustments, and

-adjustments attributable to noncontrolling interests

Adjusted opening Enstar ordinary shareholders' equity (denominator)

Opening Enstar ordinary shareholders' equity, less:

-net unrealized gains (losses) on fixed maturities and funds held-directly managed,

-fair value of insurance contracts for which we have elected the fair value option (1),

-fair value adjustments, and

-net assets of held for sale or disposed subsidiaries classified as discontinued operations (if any)

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 31

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Item 2 | Management's Discussion and Analysis | Non-GAAP Financial Measures

Adjusted run-off liability earnings (%)

Adjusted PPD divided by average adjusted net loss reserves.

Calculating the RLE as a percentage of our adjusted average net loss reserves provides a more meaningful and comparable measurement of the impact of our claims management strategies on our loss portfolios across acquisition years and also to our overall financial periods.

We use this measure to evaluate the impact of our claims management strategies because it provides visibility into our ability to settle our claims obligations for amounts less than our initial estimate at the point of acquiring the obligations.

The following components of periodic recurring net incurred losses and LAE and net loss reserves are not considered key components of our claims management performance for the following reasons:

•Prior to the settlement of the contractual arrangements, the results of our Legacy Underwriting segment were economically transferred to a third party primarily through use of reinsurance and a Capacity Lease Agreement(2); as such, the results were not a relevant contribution to Adjusted RLE, which is designed to analyze the impact of our claims management strategies;

•The results of our Assumed Life segment relate only to our prior exposure to active property catastrophe business; as this business was not in run-off, the results were not a relevant contribution to Adjusted RLE;

•The change in fair value of insurance contracts for which we have elected the fair value option(1) has been removed to support comparability between the two acquisition years for which we elected the fair value option in reserves assumed and the acquisition years for which we did not make this election (specifically, this election was only made in the 2017 and 2018 acquisition years and the election of such option is irrevocable); and

•The amortization of fair value adjustments are non-cash charges that obscure our trends on a consistent basis.

We include our performance in managing claims and estimated future expenses on our defendant A&E liabilities because such performance is relevant to assessing our claims management strategies even though such liabilities are not included within the loss reserves.

We use this measure to assess the performance of our claim strategies and part of the performance assessment of our past acquisitions.

Adjusted prior period development

(numerator)

Prior period net incurred losses and LAE, adjusted to:

Remove:

-Legacy Underwriting and Assumed Life operations

-amortization of fair value adjustments,

-change in fair value of insurance contracts for which we have elected the fair value option (1),

and

Add:

-the reduction/(increase) in estimates of net ultimate liabilities and reduction in estimated future expenses of our defendant A&E liabilities.

Adjusted net loss reserves

(denominator)

Net losses and LAE, adjusted to:

Remove:

-Legacy Underwriting and Assumed Life net loss reserves

-current period net loss reserves

-net fair value adjustments associated with the acquisition of companies,

-the fair value adjustments for contracts for which we have elected the fair value option (1) and

Add:

-net nominal defendant A&E liability exposures and estimated future expenses.

Adjusted total investment return (%)

Adjusted total investment return (dollars) recognized in earnings for the applicable period divided by period average adjusted total investable assets.

Provides a key measure of the return generated on the capital held in the business and is reflective of our investment strategy.

Provides a consistent measure of investment returns as a percentage of all assets generating investment returns.

We adjust our investment returns to eliminate the impact of the change in fair value of fixed maturities (both credit spreads and interest rates), as we typically hold most of these investments until the earlier of maturity or used to fund any settlement of related liabilities which are generally recorded at cost.

Adjusted total investment return ($) (numerator)

Total investment return (dollars), adjusted for:

-net realized and unrealized (gains) losses on fixed maturities and funds held-directly managed; and

-unrealized (gains) losses on fixed maturities, AFS included within OCI, net of reclassification adjustments and excluding foreign exchange.

Adjusted average aggregate total investable assets (denominator)

Total average investable assets, adjusted for:

-net unrealized (gains) losses on fixed maturities, AFS included within AOCI

-net unrealized (gains) losses on fixed maturities, trading

(1) Comprises the discount rate and risk margin components.

(2) The reinsurance contractual arrangements (including the Capacity Lease Agreement) described in Note 5 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022 were settled during the second quarter of 2023. As a result of the settlement, we do not expect to record any transactions in the Legacy Underwriting segment in 2023.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 32

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Item 2 | Management's Discussion and Analysis | Non-GAAP Financial Measures

Reconciliation of GAAP to Non-GAAP Measures

The table below presents a reconciliation of BVPS to Adjusted BVPS*:


	September 30, 2023					December 31, 2022
	Equity (1)		Ordinary Shares	Per Share Amount		Equity (1) (2)		Ordinary Shares	Per Share Amount
	(in millions of U.S. dollars, except share and per share data)
Book value per ordinary share	$	4,367	15,465,573	$	282.37	$	4,464	17,022,420	$	262.24
Non-GAAP adjustment:

Share-based compensation plans			298,932					218,171

Adjusted book value per ordinary share*	$	4,367	15,764,505	$	277.01	$	4,464	17,240,591	$	258.92

(1) Equity comprises Enstar ordinary shareholders' equity, which is calculated as Enstar shareholders' equity less preferred shares ($510 million) prior to any non-GAAP adjustments.

(2) Enstar ordinary shareholders’ equity as of December 31, 2022 has been retrospectively adjusted for the impact of adopting ASU 2018-12. Refer to Note 8 to our condensed consolidated financial statements for further information.

The table below presents a reconciliation of ROE to Adjusted ROE* and Annualized ROE to Annualized Adjusted ROE*:


	Three Months Ended
	September 30, 2023								September 30, 2022
	Net earnings (loss) (1)		Opening equity (1)		(Adj) ROE		Annualized (Adj) ROE		Net earnings (loss) (1)		Opening equity (1)		(Adj) ROE		Annualized (Adj) ROE
	(in millions of U.S. dollars)
Net earnings (loss)/Opening equity/ROE/Annualized ROE (1)	$	38	$	4,403	0.9	%	3.5	%	$	(432)	$	4,619	(9.4)	%	(37.4)	%
Non-GAAP adjustments:

Net realized losses on fixed maturities, AFS (2) / Net unrealized losses on fixed maturities, AFS (3)	12		550						23		574
Net unrealized losses on fixed maturities, trading (2) / Net unrealized losses on fixed maturities, trading (3)	22		337						157		329
Net realized and unrealized losses on funds held - directly managed (2) / Net unrealized losses on funds held - directly managed (3)	46		166						238		342
Change in fair value of insurance contracts for which we have elected the fair value option / Fair value of insurance contracts for which we have elected the fair value option (4)	12		(312)						(82)		(239)

Amortization of fair value adjustments / Fair value adjustments	4		(116)						4		(99)


Tax effects of adjustments (5)	(6)		—						(2)		—
Adjustments attributable to noncontrolling interests (6)	—		—						(42)		—
Adjusted operating income (loss)/Adjusted opening equity/Adjusted ROE/Annualized adjusted ROE*	$	128	$	5,028	2.5	%	10.2	%	$	(136)	$	5,526	(2.5)	%	(9.8)	%

(1) Net earnings (loss) comprises net earnings (loss) attributable to Enstar ordinary shareholders, prior to any non-GAAP adjustments. Opening equity comprises Enstar ordinary shareholders' equity, which is calculated as opening Enstar shareholders' equity less preferred shares ($510 million), prior to any non-GAAP adjustments.

(2) Net realized gains (losses) on fixed maturities, AFS and funds held - directly managed are included in net realized gains (losses) in our condensed consolidated statements of earnings. Net unrealized gains (losses) on fixed maturities, trading and funds held - directly managed are included in net unrealized gains (losses) in our condensed consolidated statements of earnings.

(3) Our fixed maturities are held directly on our balance sheet and also within the "Funds held - directly managed" balance.

(4) Comprises the discount rate and risk margin components.

(5) Represents an aggregation of the tax expense or benefit associated with the specific country to which the pre-tax adjustment relates, calculated at the applicable jurisdictional tax rate.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 33

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Item 2 | Management's Discussion and Analysis | Non-GAAP Financial Measures

(6) Represents the impact of the adjustments on the net earnings (loss) attributable to noncontrolling interests associated with the specific subsidiaries to which the adjustments relate.

*Non-GAAP measure.


	Nine Months Ended
	September 30, 2023								September 30, 2022
	Net earnings (loss) (1)		Opening equity (1)(2)		(Adj) ROE		Annualized (Adj) ROE		Net earnings (loss) (1)		Opening equity (1)		(Adj) ROE		Annualized (Adj) ROE
	(in millions of U.S. dollars)
Net earnings (loss)/Opening equity/ROE/Annualized ROE (1)	$	483	$	4,464	10.8	%	14.4	%	$	(1,133)	$	5,813	(19.5)	%	(26.0)	%
Non-GAAP adjustments:


Net realized losses on fixed maturities, AFS (3) / Net unrealized losses on fixed maturities, AFS (4)	55		647						88		36
Net unrealized losses on fixed maturities, trading (3) / Net unrealized losses on fixed maturities, trading (4)	24		400						556		(134)
Net realized and unrealized losses on funds held - directly managed (3) / Net unrealized losses on funds held - directly managed (4)	49		780						517		9
Change in fair value of insurance contracts for which we have elected the fair value option / Fair value of insurance contracts for which we have elected the fair value option (5)	24		(294)						(228)		(107)

Amortization of fair value adjustments / Fair value adjustments	13		(124)						11		(106)


Tax effects of adjustments (6)	(12)		—						(6)		—
Adjustments attributable to noncontrolling interests (7)	(2)		—						(90)		—

Adjusted operating income (loss)/Adjusted opening equity/Adjusted ROE/Annualized adjusted ROE*	$	634	$	5,873	10.8	%	14.4	%	$	(285)	$	5,511	(5.2)	%	(6.9)	%

(3) Net realized gains (losses) on fixed maturities, AFS and funds held - directly managed are included in net realized gains (losses) in our condensed consolidated statements of earnings. Net unrealized gains (losses) on fixed maturities, trading and funds held - directly managed are included in net unrealized gains (losses) in our condensed consolidated statements of earnings.

(4) Our fixed maturities are held directly on our balance sheet and also within the "Funds held - directly managed" balance.

(5) Comprises the discount rate and risk margin components.

(6) Represents an aggregation of the tax expense or benefit associated with the specific country to which the pre-tax adjustment relates, calculated at the applicable jurisdictional tax rate.

(7) Represents the impact of the adjustments on the net earnings (loss) attributable to noncontrolling interests associated with the specific subsidiaries to which the adjustments relate.

*Non-GAAP measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 34

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Item 2 | Management's Discussion and Analysis | Non-GAAP Financial Measures

The tables below present a reconciliation of RLE to Adjusted RLE* and Annualized RLE to Annualized Adjusted RLE*:


	Three Months Ended		As of						Three Months Ended
	September 30, 2023		September 30, 2023		June 30, 2023		September 30, 2023		September 30, 2023
	RLE / PPD		Net loss reserves		Net loss reserves		Average net loss reserves		RLE %		Annualized RLE %
	(in millions of U.S. dollars)
PPD/net loss reserves/RLE/Annualized RLE	$	15	$	12,155	$	12,939	$	12,547	0.1	%	0.5	%
Non-GAAP Adjustments:
Net loss reserves - current period	—		(15)		(11)		(13)






Amortization of fair value adjustments / Net fair value adjustments associated with the acquisition of companies	4		112		116		114
Changes in fair value - fair value option / Net fair value adjustments for contracts for which we have elected the fair value option (1)	12		292		312		302
Change in estimate of net ultimate liabilities - defendant A&E / Net nominal defendant A&E liabilities	—		533		550		542
Reduction in estimated future expenses - defendant A&E / Estimated future expenses - defendant A&E	1		33		34		33
Adjusted PPD/Adjusted net loss reserves/ Adjusted RLE/Annualized Adjusted RLE*	$	32	$	13,110	$	13,940	$	13,525	0.2	%	0.9	%

(1) Comprises the discount rate and risk margin components.

*Non-GAAP measure.


	Three Months Ended		As of						Three Months Ended
	September 30, 2022		September 30, 2022		June 30, 2022		September 30, 2022		September 30, 2022
	RLE / PPD		Net loss reserves		Net loss reserves		Average net loss reserves		RLE %		Annualized RLE %
	(in millions of U.S. dollars)
PPD/net loss reserves/RLE/Annualized RLE	$	141	$	11,819	$	12,524	$	12,172	1.2	%	4.6	%
Non-GAAP Adjustments:
Net loss reserves - current period	—		(36)		(25)		(31)
Assumed Life	—		(141)		(149)		(145)
Legacy Underwriting	(2)		(137)		(140)		(139)


Amortization of fair value adjustments / Net fair value adjustments associated with the acquisition of companies	4		95		99		97
Changes in fair value - fair value option / Net fair value adjustments for contracts for which we have elected the fair value option (1)	(82)		305		239		272
Change in estimate of net ultimate liabilities - defendant A&E / Net nominal defendant A&E liabilities	—		572		574		573
Reduction in estimated future expenses - defendant A&E / Estimated future expenses - defendant A&E	—		35		36		36
Adjusted PPD/Adjusted net loss reserves/Adjusted RLE/Annualized Adjusted RLE*	$	61	$	12,512	$	13,158	$	12,835	0.5	%	1.9	%

(1) Comprises the discount rate and risk margin components.

*Non-GAAP measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 35

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Item 2 | Management's Discussion and Analysis | Non-GAAP Financial Measures


	Nine Months Ended		As of					Nine Months Ended
	September 30, 2023		September 30, 2023		December 31, 2022	September 30, 2023		September 30, 2023
	RLE / PPD		Net loss reserves			Net loss reserves		Average net loss reserves		RLE %		Annualized RLE %
	(in millions of U.S. dollars)
PPD/net loss reserves/RLE/Annualized RLE	$	35	$	12,155		$	12,011	$	12,083	0.3	%	0.4	%
Non-GAAP Adjustments:
Net loss reserves - current period	—		(15)			—		(8)

Legacy Underwriting	—		—			(139)		(69)




Amortization of fair value adjustments / Net fair value adjustments associated with the acquisition of companies	13		112			124		118
Changes in fair value - fair value option / Net fair value adjustments for contracts for which we have elected the fair value option (1)	24		292			294		293
Change in estimate of net ultimate liabilities - defendant A&E / Net nominal defendant A&E liabilities	2		533			572		553
Reduction in estimated future expenses - defendant A&E / Estimated future expenses - defendant A&E	2		33			35		34
Adjusted PPD/Adjusted net loss reserves/Adjusted RLE/Annualized Adjusted RLE*	$	76	$	13,110		$	12,897	$	13,004	0.6	%	0.8	%

(1) Comprises the discount rate and risk margin components.

*Non-GAAP measure.


	Nine Months Ended		As of						Nine Months Ended
	September 30, 2022		September 30, 2022		December 31, 2021		September 30, 2022			September 30, 2022
	RLE / PPD		Net loss reserves		Net loss reserves		Average Net loss reserves			RLE %		Annualized RLE %
	(in millions of U.S. dollars)
PPD/net loss reserves/RLE/Annualized RLE	$	476	$	11,819	$	11,926	$	11,873		4.0	%	5.3	%
Non-GAAP Adjustments:
Net loss reserves - current period	—		(36)		—		(18)
Assumed Life	(29)		(141)		(181)		(161)
Legacy Underwriting	2		(137)		(153)		(146)


Amortization of fair value adjustments / Net fair value adjustments associated with the acquisition of companies	11		95		106		101
Changes in fair value - fair value option / Net fair value adjustments for contracts for which we have elected the fair value option (1)	(228)		305		107		206
Change in estimate of net ultimate liabilities - defendant A&E / Net nominal defendant A&E liabilities	4		572		574		573
Reduction in estimated future expenses - defendant A&E / Estimated future expenses - defendant A&E	1		35		36		36
Adjusted PPD/Adjusted net loss reserves/Adjusted RLE/Annualized Adjusted RLE*	$	237	$	12,512	$	12,415	$	12,464		1.9	%	2.5	%

(1) Comprises the discount rate and risk margin components.

*Non-GAAP measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 36

Table of Contents

Item 2 | Management's Discussion and Analysis | Non-GAAP Financial Measures

The tables below present a reconciliation of our Annualized TIR to our Annualized Adjusted TIR*:


	Three Months Ended
	September 30, 2023									September 30, 2022
	Fixed Income			Other Investments			Total			Fixed Income			Other Investments			Total
	(in millions of U.S. dollars)
Net investment income	$	128		$	15		$	143		$	94		$	22		$	116
Net realized losses
Fixed maturities, AFS	(12)			—			(12)			(23)			—			(23)


Net losses recognized on equity securities sold during the period	—			—			—			—			(11)			(11)

Investment derivatives	—			(2)			(2)			—			(2)			(2)
Net realized losses	(12)			(2)			(14)			(23)			(13)			(36)
Net unrealized (losses) gains
Fixed maturities, trading	(22)			—			(22)			(157)			—			(157)
Funds held – directly managed	(46)			—			(46)			(238)			—			(238)
Net unrealized gains (losses) recognized on equity securities still held at the reporting date	—			17			17			—			(82)			(82)
Other investments	—			68			68			—			(65)			(65)
Investment derivatives	—			3			3			—			(4)			(4)
Net unrealized (losses) gains	(68)			88			20			(395)			(151)			(546)
(Losses) earnings from equity method investments	—			(3)			(3)			—			(20)			(20)
Other comprehensive income:
Unrealized losses on fixed maturities, AFS, net of reclassification adjustments excluding foreign exchange	(63)			—			(63)			(175)			—			(175)
TIR ($)	$	(15)		$	98		$	83		$	(499)		$	(162)		$	(661)

Non-GAAP adjustments:
Net realized and unrealized losses on fixed maturities and funds held-directly managed	80			—			80			418			—			418
Unrealized losses on fixed maturities, AFS, net of reclassification adjustments excluding foreign exchange	63			—			63			175			—			175
Adjusted TIR ($)*	$	128		$	98		$	226		$	94		$	(162)		$	(68)

Total investments	$	9,912		$	4,927		$	14,839		$	9,356		$	4,870		$	14,226
Cash and cash equivalents, including restricted cash and cash equivalents	884			—			884			1,357			—			1,357
Funds held by reinsured companies	2,871			—			2,871			3,727			—			3,727

Total investable assets	$	13,667		$	4,927		$	18,594		$	14,440		$	4,870		$	19,310

Average aggregate invested assets, at fair value (1)	14,085			4,866			18,951			15,002			5,138			20,140
Annualized TIR % (2)	(0.4)		%	8.1		%	1.8		%	(13.3)		%	(12.6)		%	(13.1)		%
Non-GAAP adjustment:
Net unrealized losses on fixed maturities, AFS included within AOCI and net unrealized losses on fixed maturities, trading and funds held - directly managed	1,222			—			1,222			1,926			—			1,926
Adjusted investable assets*	$	14,889		$	4,927		$	19,816		$	16,366		$	4,870		$	21,236

Adjusted average aggregate invested assets, at fair value* (3)	$	15,223		$	4,866		$	20,089		$	16,590		$	5,138		$	21,728
Annualized adjusted TIR %* (4)	3.4		%	8.1		%	4.5		%	2.3		%	(12.6)		%	(1.3)		%

(1) This amount is a two period average of the total investable assets, as presented above, and is comprised of amounts disclosed in our quarterly and annual U.S. GAAP consolidated financial statements.

(2) Annualized TIR % is calculated by dividing the annualized TIR ($) by average aggregate invested assets, at fair value.

(3) This amount is a two period average of the adjusted investable assets*, as presented above.

(4) Annualized adjusted TIR %* is calculated by dividing the annualized adjusted TIR* ($) by adjusted average aggregate invested assets, at fair value*.

*Non-GAAP measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 37

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Item 2 | Management's Discussion and Analysis | Other Financial Measures


	Nine Months Ended
	September 30, 2023									September 30, 2022
	Fixed Income			Other Investments			Total			Fixed Income			Other Investments			Total
	(in millions of U.S. dollars)
Net investment income	$	409		$	62		$	471		$	239		$	63		$	302
Net realized (losses) gains
Fixed maturities, AFS	(55)			—			(55)			(88)			—			(88)
Funds held - directly managed	(7)			—			(7)			—			—			—

Net (losses) recognized on equity securities sold during the period	—			23			23			—			(21)			(21)

Investment derivatives	—			6			6			—			(2)			(2)
Net realized (losses) gains	(62)			29			(33)			(88)			(23)			(111)
Net unrealized (losses) gains
Fixed maturities, trading	(24)			—			(24)			(556)			—			(556)
Funds held – directly managed	(42)			—			(42)			(517)			—			(517)
Net unrealized (losses) gains recognized on equity securities still held at the reporting date	—			86			86			—			(284)			(284)
Other investments	—			180			180			—			(141)			(141)
Investment derivatives	—			—			—			—			(20)			(20)
Net unrealized (losses) gains	(66)			266			200			(1,073)			(445)			(1,518)
Earnings from equity method investments	—			22			22			—			12			12
Other comprehensive income:
Unrealized gains (losses) on fixed maturities, AFS, net of reclassification adjustments excluding foreign exchange	2			—			2			(657)			—			(657)
TIR ($)	$	283		$	379		$	662		$	(1,579)		$	(393)		$	(1,972)

Non-GAAP adjustment:
Net realized and unrealized losses on fixed maturities, AFS and trading, and funds held-directly managed	128			—			128			1,161			—			1,161
Unrealized (gains) losses on fixed maturities, AFS, net of reclassification adjustments excluding foreign exchange	(2)			—			(2)			657			—			657
Adjusted TIR ($)*	$	409		$	379		$	788		$	239		$	(393)		$	(154)

Total investments	$	9,912		$	4,927		$	14,839		$	9,356		$	4,870		$	14,226
Cash and cash equivalents, including restricted cash and cash equivalents	884			—			884			1,357			—			1,357
Funds held by reinsured companies	2,871			—			2,871			3,727			—			3,727

Total investable assets	$	13,667		$	4,927		$	18,594		$	14,440		$	4,870		$	19,310

Average aggregate invested assets, at fair value (1)	13,782			4,902			18,684			14,960			5,232			20,192
Annualized TIR % (2)	2.7		%	10.3		%	4.7		%	(14.1)		%	(10.0)		%	(13.0)		%
Non-GAAP adjustment:
Net unrealized losses on fixed maturities, AFS included within AOCI and net unrealized losses on fixed maturities, trading and funds held - directly managed	1,222			—			1,222			1,926			—			1,926
Adjusted investable assets*	$	14,889		$	4,927		$	19,816		$	16,366		$	4,870		$	21,236

Adjusted average aggregate invested assets, at fair value* (3)	$	15,053		$	4,902		$	19,955		$	15,861		$	5,232		$	21,093
Annualized adjusted TIR %* (4)	3.6		%	10.3		%	5.3		%	2.0		%	(10.0)		%	(1.0)		%

(1) This amount is a four period average of the total investable assets, as presented above, and is comprised of amounts disclosed in our quarterly and annual U.S. GAAP consolidated financial statements.

(2) Annualized TIR % is calculated by dividing the annualized TIR ($) by average aggregate invested assets, at fair value.

(3) This amount is a four period average of the adjusted investable assets*, as presented above.

(4) Annualized adjusted TIR %* is calculated by dividing the annualized adjusted TIR* ($) by adjusted average aggregate invested assets, at fair value*.

*Non-GAAP measure.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 38

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Item 2 | Management's Discussion and Analysis | Other Financial Measures

Other Financial Measures

In addition to our non-GAAP financial measures presented above, we refer to TIR, which provides a key measure of the return generated on the capital held in the business. It is reflective of our investment strategy and it provides a consistent measure of investment returns as a percentage of all assets generating investment returns.

The following tables provide the calculation of our Annualized TIR by reporting segment:


	Three Months Ended
	September 30, 2023									September 30, 2022
	Investments			Legacy Underwriting			Total			Investments			Legacy Underwriting			Total
	(in millions of U.S. dollars)
Net investment income:
Fixed maturities	$	120		$	—		$	120		$	94		$	2		$	96
Cash and restricted cash	14			—			14			2			—			2
Other investments, including equities	15			—			15			22			—			22
Less: Investment expenses	(6)			—			(6)			(4)			—			(4)
Net investment income	$	143		$	—		$	143		$	114		$	2		$	116
Net realized losses:
Fixed maturities	$	(12)		$	—		$	(12)		$	(23)		$	—		$	(23)
Other investments, including equities	(2)			—			(2)			(13)			—			(13)
Net realized losses	$	(14)		$	—		$	(14)		$	(36)		$	—		$	(36)
Net unrealized gains (losses):
Fixed maturities, trading	(68)			—			(68)			(391)			(4)			(395)
Other investments, including equities	88			—			88			(151)			—			(151)
Net unrealized gains (losses):	$	20		$	—		$	20		$	(542)		$	(4)		$	(546)
Losses from equity method investments	(3)			—			(3)			(20)			—			(20)
Other comprehensive income:
Unrealized losses on fixed maturities, AFS, net of reclassification adjustments excluding foreign exchange	(63)			—			(63)			(175)			—			(175)
TIR ($)	$	83		$	—		$	83		$	(659)		$	(2)		$	(661)

Fixed maturity and short-term investments, trading and AFS and funds held - directly managed	$	9,450		$	—		$	9,450		$	9,155		$	155		$	9,310
Other assets included within funds held - directly managed	462			—			462			46			—			46
Equities	881			—			881			1,199			—			1,199
Other investments	3,637			—			3,637			3,191			12			3,203
Equity method investments	409			—			409			468			—			468
Total investments	$	14,839		$	—		$	14,839		$	14,059		$	167		$	14,226
Cash and cash equivalents, including restricted cash and cash equivalents	884			—			884			1,340			17			1,357
Funds held by reinsured companies	2,871			—			2,871			3,704			23			3,727

Total investable assets	$	18,594		$	—		$	18,594		$	19,103		$	207		$	19,310


Average aggregate invested assets, at fair value (1)	$	18,951		$	—		$	18,951		$	19,931		$	209		$	20,140
Annualized TIR % (2)	1.8		%	—		%	1.8		%	(13.2)		%	(3.8)		%	(13.1)		%

Annualized income from fixed income assets (3)	536			—			536			384			8			392
Average aggregate fixed income assets, at cost (3)(4)	15,201			—			15,201			16,666			210			16,876
Annualized Investment book yield (5)	3.53		%	—		%	3.53		%	2.30		%	3.81		%	2.32		%

(2) Annualized total investment return % is calculated by dividing the annualized total investment return ($) by average aggregate invested assets, at fair value.

(3) Fixed income assets include fixed maturities and cash and restricted cash, and funds held by reinsured companies.

(4) These amounts are a two period average of the amounts disclosed in our quarterly and annual U.S. GAAP consolidated financial statements.

(5) Annualized investment book yield % is calculated by dividing the annualized income from fixed income assets by average aggregate fixed income assets, at cost.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 39

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment


	Nine Months Ended
	September 30, 2023									September 30, 2022
	Investments			Legacy Underwriting			Total			Investments			Legacy Underwriting			Total
	(in millions of U.S. dollars)
Net investment income:
Fixed maturities	$	396		$	—		$	396		$	247		$	7		$	254
Cash and restricted cash	27			—			27			3			1			4
Other investments, including equities	62			—			62			63			—			63
Less: Investment expenses	(14)			—			(14)			(19)			—			(19)
Net investment income	$	471		$	—		$	471		$	294		$	8		$	302
Net realized (losses) gains:
Fixed maturities	$	(62)		$	—		$	(62)		$	(88)		$	—		$	(88)
Other investments, including equities	29			—			29			(23)			—			(23)
Net realized (losses) gains	$	(33)		$	—		$	(33)		$	(111)		$	—		$	(111)
Net unrealized gains (losses):
Fixed maturities, trading	(66)			—			(66)			(1,061)			(12)			(1,073)
Other investments, including equities	266			—			266			(445)			—			(445)
Net unrealized gains (losses)	$	200		$	—		$	200		$	(1,506)		$	(12)		$	(1,518)
Earnings from equity method investments	22			—			22			12			—			12
Other comprehensive income:
Unrealized gains (losses) on fixed maturities, AFS, net of reclassification adjustments excluding foreign exchange	2			—			2			(657)			—			(657)
TIR ($)	$	662		$	—		$	662		$	(1,968)		$	(4)		$	(1,972)

Fixed maturity and short-term investments, trading and AFS and funds held - directly managed	$	9,450		$	—		$	9,450		$	9,155		$	155		$	9,310
Other assets included within funds held - directly managed	462			—			462			46			—			46
Equities	881			—			881			1,199			—			1,199
Other investments	3,637			—			3,637			3,191			12			3,203
Equity method investments	409			—			409			468			—			468
Total investments	$	14,839		$	—		$	14,839		$	14,059		$	167		$	14,226
Cash and cash equivalents, including restricted cash and cash equivalents	884			—			884			1,340			17			1,357
Funds held by reinsured companies	2,871			—			2,871			3,704			23			3,727

Total investable assets	$	18,594		$	—		$	18,594		$	19,103		$	207		$	19,310


Average aggregate invested assets, at fair value (1)	$	18,684		$	—		$	18,684		$	19,972		$	220		$	20,192
Annualized TIR % (2)	4.7		%	—		%	4.7		%	(13.1)		%	(2.4)		%	(13.0)		%

Annualized income from fixed income assets (3)	564			—			564			333			11			344
Average aggregate fixed income assets, at cost (3)(4)	15,101			—			15,101			15,758			215			15,973
Annualized Investment book yield (5)	3.73		%	—		%	3.73		%	2.11		%	5.12		%	2.15		%

(2) Annualized total investment return % is calculated by dividing the annualized total investment return ($) by average aggregate invested assets, at fair value.

(3) Fixed income assets include fixed maturities and cash and restricted cash, and funds held by reinsured companies.

(4) These amounts are a four period average of the amounts disclosed in our quarterly and annual U.S. GAAP consolidated financial statements.

(5) Annualized investment book yield % is calculated by dividing the annualized income from fixed income assets by average aggregate fixed income assets, at cost.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 40

Table of Contents

Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Run-off Segment

Results of Operations by Segment - For the Three and Nine Months Ended September 30, 2023 and 2022

Our business is organized into four reportable segments: (i) Run-off; (ii) Assumed Life; (iii) Investments; and (iv) Legacy Underwriting. In addition, our corporate and other activities, which do not qualify as an operating segment, include income and expense items that are not directly attributable to our reportable segments.

The following is a discussion of our results of operations by segment.

Run-off Segment

The following is a discussion and analysis of the results of operations for our Run-off segment.


	Three Months Ended							Nine Months Ended
	September 30,				$ Change			September 30,					$ Change
	2023		2022				2023			2022
INCOME	(in millions of U.S. dollars)
Net premiums earned	$	14	$	1	$	13		$	29		$	27	$	2
Other income:
Reduction in estimates of net ultimate defendant A&E liabilities - prior periods	—		—		—			2			4		(2)
Reduction in estimated future defendant A&E expenses	1		—		1			2			1		1
All other income	—		2		(2)			7			14		(7)
Total other income	1		2		(1)			11			19		(8)
Total income	15		3		12			40			46		(6)

EXPENSES
Net incurred losses and LAE:
Current period	5		10		(5)			18			35		(17)
Prior periods:
Reduction in estimates of net ultimate losses	(12)		(46)		34			(35)			(183)		148
Reduction in provisions for ULAE	(19)		(15)		(4)			(37)			(49)		12
Total prior periods	(31)		(61)		30			(72)			(232)		160
Total net incurred losses and LAE	(26)		(51)		25			(54)			(197)		143
Acquisition costs	—		1		(1)			6			18		(12)
General and administrative expenses (1)	44		38		6			130			123		7
Total expenses	18		(12)		30			82			(56)		138

SEGMENT NET (LOSS) EARNINGS	$	(3)	$	15	$	(18)		$	(42)		$	102	$	(144)

(1) Includes an adjustment made to correct immaterial errors related to the allocation of third quarter 2022 expenses, which increased general and administrative expenses by $4 million and $14 million for the three and nine months ended September 30, 2022, respectively.

Overall Results

Three Months Ended September 30, 2023 versus 2022: Net loss from our Run-off segment was $3 million compared to net earnings of $15 million in the comparative quarter, primarily due to:

•A $30 million decrease in favorable PPD in the current quarter, mainly driven by a $34 million decrease in the reduction in estimates of net ultimate losses in comparison to the comparative quarter.

◦During the third quarter of 2023, we recognized favorable development on our workers’ compensation and property lines of business of $24 million and $17 million, respectively, as a result of favorable claims experience. The results were partially offset by adverse development on our general casualty line of business of $41 million, primarily due to a small number of large losses across several portfolios, particularly on excess business, and adverse development on our all other line of business of $17 million, driven by identified deterioration on abuse claims.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 41

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Assumed Life Segment

◦In comparison, during the third quarter of 2022 we recognized favorable development of $54 million on our workers’ compensation line of business as a result of favorable claim settlements, and favorable development of $28 million on our marine, aviation and transit line of business as a result of lower claim activity. This was partially offset by adverse development on our general casualty and motor lines of business of $21 million and $19 million, respectively, primarily due to worse than expected claims experience and adverse development on claims; partially offset by

•A net favorable change in net premiums earned, current period net incurred losses and LAE and acquisition costs of $19 million, following our exit of our StarStone International business beginning in 2020.

Nine Months Ended September 30, 2023 versus 2022: Net loss from our Run-off segment was $42 million compared to net earnings of $102 million in the comparative period, primarily due to:

•A $160 million decrease in favorable PPD, mainly driven by a $148 million decrease in the reduction in estimates of net ultimate losses in comparison to the comparative period.

◦The prior period reduction in estimates of net ultimate losses of $35 million was driven by net favorable development across multiple Run-off segment lines of business. We recognized $44 million of favorable development on our workers’ compensation line of business as a result of continued favorable claims experience and $16 million of favorable development on our property line of business as a result of favorable claims experience. The results were partially offset by $37 million of adverse development in our general casualty line of business, primarily due to a small number of large losses across several portfolios, particularly on excess business, and $18 million of adverse development on our all other line of business, driven by identified deterioration on abuse claims.

◦We also increased our ULAE provision by $21 million as a result of assuming active claims control on our 2022 LPT agreement with Argo, which offset other ULAE reserve adjustments from our run-off operations.

◦In comparison, during the nine months ended September 30, 2022, we recognized favorable development of $104 million on our workers’ compensation line of business as a result of favorable claim settlements. We also recognized favorable development of $85 million on our professional indemnity/directors and officers line of business and favorable development of $38 million on our marine, aviation and transit line of business as a result of lower claims activity. This was partially offset by adverse development on our general casualty and motor lines of business of $31 million and $20 million, respectively, as a result of worse than expected claims experience and adverse development on claims; partially offset by

•A net favorable change in net premiums earned, current period net incurred losses and LAE and acquisition costs of $31 million, following our exit of our StarStone International business beginning in 2020.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 42

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Assumed Life Segment

Assumed Life Segment

The Assumed Life segment consists of life and property aggregate excess of loss (catastrophe) business relating to Enhanzed Re, which we have consolidated since September 1, 2021 following the completion of a step acquisition that increased our ownership interest to 75.1%. We report the Enhanzed Re component results of this segment on a one quarter lag.

The Enhanzed Re catastrophe business was not renewed for 2022. During the third quarter of 2022, Enhanzed Re entered into a Master Agreement, through which we completed a series of commutation and novation agreements that allowed us to unwind Enhanzed Re’s operations in an orderly manner.

Transactions completed in the fourth quarter of 2022 were recognized in the first quarter of 2023, including the novation of our reinsurance of a closed block of life annuity policies to Monument Re and the repurchase of the remaining 24.9% interest in Enhanzed Re from Allianz.

Following the completion of the transactions, we have ceased all continuing reinsurance obligations for this segment. We may leverage this segment for any future potential assumed life business transactions if and when they occur.

The following is a discussion and analysis of the results of operations for our Assumed Life segment.


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2023		2022		$ Change		2023		2022		$ Change

INCOME	(in millions of U.S. dollars)
Net premiums earned	$	—	$	2	$	(2)	$	—	$	17	$	(17)
Other income	1		—		1		276		—		276
Total income	1		2		(1)		276		17		259

EXPENSES
Net incurred losses and LAE:

Prior periods:
Reduction in estimates of net ultimate losses	—		—		—		—		(29)		29

Total prior periods	—		—		—		—		(29)		29
Total net incurred losses and LAE	—		—		—		—		(29)		29
Policyholder benefit expenses	—		7		(7)		—		25		(25)

General and administrative expenses	—		2		(2)		—		6		(6)
Total expenses	—		9		(9)		—		2		(2)

SEGMENT NET EARNINGS (LOSS)	$	1	$	(7)	$	8	$	276	$	15	$	261

Overall Results

Three and Nine Months Ended September 30, 2023 versus 2022: As discussed above, we ceased all continuing reinsurance obligations relating to our Assumed Life segment following the completion of the transactions pursuant to the Master Agreement. We did not record any transactions in the segment during the second and third quarters of 2023, aside from amortizing $1 million into other income for the three and nine months ended September 30, 2023 relating to the portion of the gain on the novation transaction of $49 million that was related to the proportion of our existing ownership interest in Monument Re that is being amortized over the related settlement period of the transferred liabilities.

The increase in net earnings from our Assumed Life segment of $261 million for the nine months ended September 30, 2023 was primarily due to the net gain recognized on the completion of the novation of the Enhanzed Re reinsurance of a closed block of life annuity policies.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 43

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Investments Segment

The $275 million gain calculated as of the completion date of the novation, prior to noncontrolling interests, was comprised of three components:

•the reclassification benefit to income of $363 million from AOCI related to the settlement of the novated liabilities (in accordance with our adoption of ASU 2018-12, the discount rate assumption for our long-duration liabilities was required to be periodically adjusted for changes in interest rates, which had the effect of reducing our future policyholder benefit liabilities and increasing the net assets transferred in the novation);

•the loss of $39 million on the carrying value of the net assets of $133 million as of the closing date of the transaction in exchange for cash consideration of $94 million (as noted above, the retrospective adoption of ASU 2018-12 resulted in an increase in net assets which gave rise to the transactional loss prior to our realization of the $363 million reclassification benefit); and

•a deferral of a portion of the net gain, $49 million, to account for our preexisting 20% ownership interest in Monument Re, calculated from the total gain of $324 million less Allianz’s 24.9% interest equal to $81 million (the deferred gain will be amortized over the expected settlement period for the life annuity policies to account).

Our net earnings attributable to Enstar were further reduced by $81 million, the amount attributable to Allianz’s 24.9% noncontrolling interest in Enhanzed Re at the time of the transaction. This amount has been recorded within our “Corporate and other activities”.

Our total year to date 2023 net earnings attributable to Enstar from this novation transaction were $195 million.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 44

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Investments Segment

Investments Segment

The following is a discussion and analysis of the results of operations for our Investments segment.


	Three Months Ended							Nine Months Ended
	September 30,				$ Change			September 30,					$ Change
	2023		2022				2023			2022
	(in millions of U.S. dollars)
INCOME
Net investment income:
Fixed maturities	$	120	$	94	$	26		$	396		$	247	$	149
Cash and restricted cash	14		2		12			27			3		24
Other investments, including equities	15		22		(7)			62			63		(1)
Less: Investment expenses	(6)		(4)		(2)			(14)			(19)		5
Total net investment income	143		114		29			471			294		177
Net realized (losses) gains:
Fixed maturities	(12)		(23)		11			(62)			(88)		26
Other investments, including equities	(2)		(13)		11			29			(23)		52
Net realized (losses) gains:	(14)		(36)		22			(33)			(111)		78
Net unrealized gains (losses):
Fixed maturities, trading	(68)		(391)		323			(66)			(1,061)		995
Other investments, including equities	88		(151)		239			266			(445)		711
Total net unrealized gains (losses):	20		(542)		562			200			(1,506)		1,706
Total income (loss)	149		(464)		613			638			(1,323)		1,961

EXPENSES
General and administrative expenses (1)	12		9		3			33			26		7
Total expenses	12		9		3			33			26		7

(Losses) earnings from equity method investments	(3)		(20)		17			22			12		10

SEGMENT NET EARNINGS (LOSS)	$	134	$	(493)	$	627		$	627		$	(1,337)	$	1,964

(1) Includes an adjustment made to correct immaterial errors related to the allocation of third quarter 2022 expenses, which decreased general and administrative expenses by $0 and $2 million for the three and nine months ended September 30, 2022, respectively.

Overall Results

Three Months Ended September 30, 2023 versus 2022: Net earnings from our Investments segment were $134 million for the three months ended September 30, 2023 compared to net losses of $493 million for the three months ended September 30, 2022. The favorable movement of $627 million was primarily due to:

•a decrease in net realized and unrealized losses on fixed maturities of $334 million, primarily as a result of a less significant increase in interest rates across U.S., U.K. and European markets relative to the comparable quarter;

•net realized and unrealized gains on other investments, including equities, of $86 million, compared to net realized and unrealized losses of $164 million in the comparative period. The favorable variance of $250 million was primarily driven by:

◦Net gains for the three months ended September 30, 2023, primarily driven by our private equity funds, private credit funds, CLO equities and fixed income funds, which are typically recorded on a one quarter lag, largely as a result of second quarter 2023 global equity market performance and tightening high yield credit spreads; in comparison to

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 45

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Investments Segment

◦Net losses for the three months ended September 30, 2022, primarily driven by our public equities, fixed income funds, private equity funds and hedge funds, largely as a result of global equity market declines and widening of high yield credit spreads; and

•an increase in our net investment income of $29 million, which is primarily due to the reinvestment of fixed maturities at higher yields, deployment of consideration received from deals closed over the past 12 months and the impact of rising interest rates on the $3.3 billion of our average fixed maturities outstanding during the period that are subject to floating interest rates. Our floating rate investments generated increased net investment income of $20 million, which equates to an increase of 168 basis points on those investments in comparison to the prior quarter.

Nine Months Ended September 30, 2023 versus 2022: Net earnings from our Investments segment were $627 million for the nine months ended September 30, 2023 compared to net losses of $1.3 billion for the nine months ended September 30, 2022. The favorable movement of $2.0 billion was primarily due to:

•a decrease in net realized and unrealized losses on fixed maturities of $1.0 billion, primarily as a result of a less significant increase in interest rates across U.S., U.K. and European markets relative to the comparative period, in addition to a tightening of credit spreads in the current period;

•net realized and unrealized gains on other investments, including equities, of $295 million, compared to net realized and unrealized losses of $468 million in the comparative period. The favorable variance of $763 million was primarily driven by:

◦Net gains for the nine months ended September 30, 2023, primarily due to our public equities, private equity funds, private credit funds and fixed income funds, largely as a result of strong global equity market performance and tightening of high yield credit spreads; in comparison to

◦Net losses for the nine months ended September 30, 2022, due to our public equities, fixed income funds, CLO equities and hedge funds, largely as a result of global equity market declines and widening of high yield credit spreads; and

•an increase in our net investment income of $177 million, which is primarily due to the reinvestment of fixed maturities at higher yields, deployment of consideration received from deals closed over the past 12 months and the impact of rising interest rates on the $3.2 billion of our average fixed maturities outstanding during the period that are subject to floating interest rates. Our floating rate investments generated increased net investment income of $76 million, which equates to an increase of 269 basis points on those investments in comparison to the prior period.

Total Investments

Fixed maturities

Refer to the below tables for the fair value, duration, and credit rating of our fixed maturities:


	September 30, 2023
	Run-off

	Fair Value		%		Duration (years) (1)	Credit Rating (1)
	(in millions of U.S. dollars, except percentages)
Fixed maturity and short-term investments, trading and AFS and funds held - directly managed
U.S. government & agency	$	473	5.0	%	5.3	AA+
U.K. government	106		1.1	%	6.5	A+
Other government	433		4.6	%	4.7	AA
Corporate	5,382		57.0	%	5.0	A-
Municipal	174		1.8	%	8.1	AA-
Residential mortgage-backed	596		6.3	%	4.9	AA
Commercial mortgage-backed	1,078		11.4	%	1.7	AA
Asset-backed	1,208		12.8	%	0.7	A+

	$	9,450	100.0	%	4.1	A

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 46

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Investments Segment

(1) The average duration and average credit ratings calculation includes short-term investments, fixed maturities and the fixed maturities within our funds held-directly managed portfolios.


	December 31, 2022
	Run-off						Assumed Life (2)
	Fair Value		%		Duration (years) (1)	Credit Rating (1)	Fair Value		%		Duration (years) (1)	Credit Rating (1)	Total		Total %
	(in millions of U.S. dollars, except percentages)
Fixed maturity and short-term investments, trading and AFS and funds held - directly managed
U.S. government & agency	$	496	5.2	%	5.9	AAA	$	—	—	%	n/a	n/a	$	496	5.2	%
U.K. government	81		0.9	%	6.5	AA-	—		—	%	n/a	n/a	81		0.9	%
Other government	289		3.1	%	6.0	AA-	134		1.4	%	10.3	BBB+	423		4.5	%
Corporate	5,031		53.0	%	5.6	A-	188		2.0	%	6.7	BBB+	5,219		55.0	%
Municipal	201		2.1	%	7.9	AA-	—		—	%	n/a	n/a	201		2.1	%
Residential mortgage-backed	536		5.7	%	4.6	AA+	—		—	%	n/a	n/a	536		5.7	%
Commercial mortgage-backed	1,021		10.8	%	2.1	AA	—		—	%	n/a	n/a	1,021		10.8	%
Asset-backed	909		9.6	%	0.5	A+	—		—	%	n/a	n/a	909		9.6	%
Structured products	—		—	%	n/a	n/a	586		6.2	%	9.7	A	586		6.2	%
Total	$	8,564	90.4	%	4.6	A	$	908	9.6	%	9.2	A-	$	9,472	100.0	%

(1) The average duration and average credit ratings calculation includes short-term investments, fixed maturities and the fixed maturities within our funds held-directly managed portfolios.

(2) Investments under the Assumed Life caption comprise those that previously supported our life reinsurance business.

The overall decrease in our fixed maturities of $22 million when comparing September 30, 2023 to December 31, 2022 was primarily driven by the derecognition of the assets supporting the Enhanzed Re reinsurance closed block of life annuity policies that were novated during the first quarter of 2023, the impact of net paid losses and the repurchase of our non-voting convertible ordinary shares and net unrealized losses, partially offset by the consideration received for the QBE and RACQ LPT transactions that closed during the second quarter of 2023.

Other investments, including equities

Refer to the below table for the composition of our other investments, including equities:


	September 30, 2023		December 31, 2022

	(in millions of U.S. dollars)
Equities
Publicly traded equities	$	239	$	385
Exchange-traded funds	276		507
Privately held equities	366		358
Total	$	881	$	1,250

Other investments
Hedge funds	$	515	$	549
Fixed income funds (1)	504		547
Equity funds	4		3
Private equity funds	1,559		1,282
CLO equities	59		148
CLO equity funds	208		203
Private credit funds	548		362
Real estate debt fund	240		202

Total	$	3,637	$	3,296

(1) Balance as of December 31, 2022 included $14 million of investments that supported the life reinsurance business within our Assumed Life segment.

Our equities decreased by $369 million and other investments increased by $341 million from December 31, 2022 to September 30, 2023, primarily due to the funding of the repurchase of our non-voting convertible ordinary shares and the redeployment from exchange-traded funds and publicly traded equities into various non-core asset

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 47

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Legacy Underwriting Segment

strategies, in line with our strategic asset allocation.

Equity Method Investments

Refer to the below table for a summary of our equity method investments, which does not include those investments we have elected to measure under the fair value option:


	As of				Three Months Ended		Nine Months Ended		As of				Three Months Ended		Nine Months Ended
	September 30, 2023				September 30, 2023				December 31, 2022				September 30, 2022
	Ownership %		Carrying Value		Earnings from Equity Method Investments				Ownership %		Carrying Value		Earnings from Equity Method Investments
	(in millions of U.S. dollars)

Citco (1)	31.9	%	63		1		4		31.9	%	60		—		2
Monument Re (2)	20.0	%	102		(4)		—		20.0	%	110		(16)		15

Core Specialty	19.9	%	229		—		18		19.9	%	211		(4)		(5)
Other	27.0	%	15		—		—		27.0	%	16		—		—
			$	409	$	(3)	$	22			$	397	$	(20)	$	12

(1) We own 31.9% of the common shares in HH CITCO Holdings Limited, which in turn owns 15.4% of the convertible preferred shares, amounting to a 6.2% interest in the total equity of Citco III Limited ("Citco").

(2) We own 20.0% of the common shares in Monument Re as well as preferred shares which have a fixed dividend yield and whose balance is included in the Investment amount.

Carrying Value

The carrying value of our equity method investments increased from December 31, 2022, primarily due to $22 million in earnings from equity method investments for the nine months ended September 30, 2023, partially offset by distributions received from Monument Re.

(Losses) Earnings from Equity Method Investments

Nine Months Ended September 30, 2023 versus 2022: Earnings from equity method investments increased by $10 million, primarily due to earnings of $18 million from our investment in Core Specialty for the nine months ended September 30, 2023 in comparison to losses of $5 million in the comparative period and a $2 million increase in earnings from our investment in Citco, partially offset by a $15 million period over period decrease in earnings from our investment in Monument Re.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 48

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Corporate and other

Legacy Underwriting Segment

The following is a discussion and analysis of the results of operations for our Legacy Underwriting segment.


	Three Months Ended							Nine Months Ended
	September 30,				$ Change			September 30,					$ Change
	2023		2022				2023			2022
INCOME	(in millions of U.S. dollars)
Net premiums earned	$	—	$	1	$	(1)		$	—		$	8	$	(8)
Net investment income	—		2		(2)			—			8		(8)

Net unrealized losses	—		(4)		4			—			(12)		12
Other income	—		1		(1)			—			4		(4)
Total income	—		—		—			—			8		(8)

EXPENSES
Net incurred losses and LAE:
Current period	—		3		(3)			—			4		(4)
Prior periods	—		(2)		2			—			2		(2)
Total net incurred losses and LAE	—		1		(1)			—			6		(6)
Acquisition costs	—		(1)		1			—			2		(2)

Total expenses	—		—		—			—			8		(8)

SEGMENT NET (LOSS) EARNINGS	$	—	$	—	$	—		$	—		$	—	$	—

Overall Results

Three and Nine Months Ended September 30, 2023 versus 2022:

The Legacy Underwriting segment results comprise SGL No.1 Limited’s (“SGL No.1”) 25% gross share of the 2020 and prior underwriting years of Atrium Underwriting Group Limited’s ("Atrium") Syndicate 609 at Lloyd’s, less the impact of reinsurance agreements with Arden Reinsurance Company Ltd. ("Arden") and a Syndicate 609 Capacity Lease Agreement with Atrium 5 Limited.

As of January 1, 2021, SGL No.1 settled its share of the 2020 and prior underwriting years for the economic benefit of Atrium, and there was no net retention by Enstar.

The contractual arrangements between SGL No. 1, Arden and Atrium relating to the reinsurance agreements and the Capacity Lease Agreement settled in the second quarter of 2023. As a result of the settlement, we do not expect to record any transactions in the Legacy Underwriting segment in 2023.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 49

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Item 2 | Management's Discussion and Analysis | Results of Operations by Segment | Corporate and other

Corporate and other

The following is a discussion and analysis of our results of operations for our Corporate and other activities.


	Three Months Ended							Nine Months Ended
	September 30,				$ Change			September 30,					$ Change
	2023		2022				2023			2022

INCOME	(in millions of U.S. dollars)
Other income (expense):

Amortization of fair value adjustments (1)	$	(5)	$	(1)	$	(4)		$	(11)		$	(6)	$	(5)
All other (expense) income	1		(6)		7			4			16		(12)
Total other (expense) income	(4)		(7)		3			(7)			10		(17)

Total (expense) income	(4)		(7)		3			(7)			10		(17)

EXPENSES
Net incurred losses and LAE - prior periods:

Amortization of fair value adjustments	4		4		—			13			11		2
Changes in fair value - fair value option (2)	12		(82)		94			24			(228)		252
Total net incurred losses and LAE - prior periods	16		(78)		94			37			(217)		254

Amortization of net deferred charge assets	34		21		13			75			60		15
General and administrative expenses (3)	35		17		18			102			79		23
Total expenses	85		(40)		125			214			(78)		292


Interest expense	(22)		(23)		1			(67)			(71)		4
Net foreign exchange gains	23		17		6			24			27		(3)
Income tax benefit (expense)	7		(8)		15			12			(4)		16

Net (earnings) loss attributable to noncontrolling interests	(4)		43		(47)			(99)			74		(173)
Dividends on preferred shares	(9)		(9)		—			(27)			(27)		—

NET (LOSS) EARNINGS ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS	$	(94)	$	53	$	(147)		$	(378)		$	87	$	(465)

(1) Amortization of fair value adjustments relates to the acquisition of DCo and Morse TEC.

(2) Comprises the discount rate and risk margin components.

(3) Includes an adjustment made to correct immaterial errors related to the allocation of third quarter 2022 expenses, which decreased general and administrative expenses by $4 million and $12 million for the three and nine months ended September 30, 2022, respectively.

Overall Results

Three Months Ended September 30, 2023 versus 2022: Net loss attributable to Enstar ordinary shareholders from our Corporate and other activities was $94 million for the three months ended September 30, 2023, compared to net earnings of $53 million for the comparative quarter, primarily due to:

•Net earnings attributable to noncontrolling interests of $4 million, as a result of net earnings for those consolidated entities where there are noncontrolling interests during the third quarter 2023, in comparison to net losses attributable to noncontrolling interests of $43 million for the comparative quarter, primarily as a result of significant negative returns on Enhanzed Re investments attributable to the then-existing Allianz 24.9% equity interest in Enhanzed Re;

•Changes in the fair value of the 2017 and 2018 portfolios where we elected the fair value option resulted in a $12 million increase in liabilities in the third quarter of 2023 primarily driven by a decrease in U.K. corporate bond yields during the third quarter of 2023. The corporate bond yields, which form a component of the discount rate used to calculate the fair value of the liabilities, are matched to the original currencies of the underlying loss portfolios, of which GBP is the predominant currency for those portfolios that we have elected to measure at fair value using the fair value option. In comparison, we recognized a $82 million reduction of such liabilities in the third quarter 2022 due to an increase in global corporate bond yields;

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 50

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Item 2 | Management's Discussion and Analysis | Current Outlook

•An increase in general and administrative expenses of $18 million, primary as a result of the absence of the third quarter 2022 reduction in long-term incentive plan costs as a result of reducing certain performance share unit (“PSU”) award values based on annual projected financial performance in the comparative quarter; and

•An increase in the amortization of net deferred charge assets of $13 million, driven by an increase in net DCA balances as a result of recently completed transactions; partially offset by

•Income tax benefit of $7 million in the current quarter as a result of pre-tax losses recognized by our U.K. entities, combined with the favorable impact of a U.K. rate change on deferred tax balances in 2023. In comparison, we recognized an income tax expense of $8 million in the third quarter 2022 driven by the derecognition of deferred tax assets as a result of a corresponding increase in valuation allowances.

Nine Months Ended September 30, 2023 versus 2022: Net loss attributable to Enstar ordinary shareholders from our Corporate and other activities was $378 million for the nine months ended September 30, 2023, compared to net earnings of $87 million for the comparative period, primarily due to:

•Changes in the fair value of the 2017 and 2018 portfolios where we elected the fair value option resulted in a $24 million increase in liabilities in the first nine months of 2023, predominantly driven by a second quarter 2023 out-of-period adjustment to correct the portion of the change in fair value related to the Instrument-specific credit risk from net incurred losses and LAE to AOCI which had previously been recorded as a benefit to net incurred losses in 2022, in comparison to a $228 million reduction of such liabilities in the comparative period, driven by a significant increase in global corporate bond yields during the first nine months of 2022.

•Net earnings attributable to noncontrolling interests of $99 million in the current period which was primarily a result of attributing $81 million of the gain on novation of the Enhanzed Re reinsurance closed block of life annuity policies to the then-existing Allianz 24.9% equity interest in Enhanzed Re at the time of the transaction, in comparison to the attribution of net losses of $74 million in the comparative period, which was primarily a result of negative returns on Enhanzed Re investments attributable to the then-existing Allianz 24.9% equity interest in Enhanzed Re;

•An increase in general and administrative expenses of $23 million, primary as a result of a reduction in long-term incentive plan costs as a result of reducing certain PSU award values based on projected financial performance in the comparative period; partially offset by

•Other expense of $7 million in the current period in comparison to other income of $10 million in the comparative period, an unfavorable change of $17 million;

•An increase in the amortization of net deferred charge assets of $15 million, driven by an increase in net DCA balances as a result of recently completed transactions; partially offset by

•Income tax benefit of $12 million in the current period as a result of pre-tax losses recognized by our U.K. entities, combined with the favorable impact of a U.K. rate change on deferred tax balances in 2023. In comparison, we recognized income tax expense of $4 million in the comparative period, primarily driven by foreign tax accruals in relation to our Lloyd’s syndicate business.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 51

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Item 2 | Management's Discussion and Analysis | Current Outlook

Current Outlook

Run-off Outlook

Transactions

On September 5, 2023, one of our wholly-owned subsidiaries entered into an agreement with American International Group, Inc. (“AIG”). Pursuant to the agreement, we will provide protection to AIG on its retained exposure to adverse development on Validus Re carried loss reserves (“subject reserves”). Enstar will cover adverse development in excess of the subject reserves up to a limit of $400 million. The agreement became effective as of November 1, 2023, corresponding to the closing of AIG’s sale of Validus Re to RenaissanceRe.

We continue to evaluate transactions in our active pipeline including LPTs, ADCs, and other transaction types including acquisitions. We seek opportunities to execute on creative and accretive transactions by offering innovative capital release solutions that enable our clients to meet their capital and risk management objectives.

Should we execute additional transactions, our mix of loss reserves by line of business, asset mix and both rate and timing of earnings may be impacted in the medium to long term.

Seasonality

We complete most of our annual loss reserve studies in the fourth quarter of each year and, as a result, tend to record the largest movements, both favorable and adverse, to net incurred losses and LAE in this period.

In the interim periods where a reserve study has not been completed, we perform quarterly reviews to ascertain whether changes to claims paid or case reserves have varied from our expectations developed during the last annual reserve review. In this event, we consider the timing and magnitude of the actual versus expected development, and we may record an interim adjustment to our recorded reserves if, and when, warranted.

Investment Outlook

We expect global financial markets to remain uncertain throughout the remainder of 2023 and into 2024 as a result of persistent inflationary pressures and the corresponding tightening of financial conditions by global central banks, a potential economic recession and the macroeconomic effects of ongoing geopolitical conflicts and tensions.

Market expectations around the future path of interest rates will represent a continued source of volatility, as global central banks attempt to address inflation while simultaneously navigating events posing risks to financial stability. In the event that interest rates continue to rise and/or credit spreads widen, we may recognize unrealized losses on our fixed maturities and incur a higher rate of borrowing and interest costs if we renew or borrow under credit facilities in the current environment.

Despite this, elevated interest rates can represent an opportunity for us in the medium to long term, notably;

•As of September 30, 2023, we hold approximately 18% of our portfolio, or $3.4 billion, in fixed maturity investments with floating interest rates which, should interest rates remain elevated, be accretive to future investment book yields. We have earned $62 million and $42 million of net investment income from our floating rate investments for the three months ended September 30, 2023 and 2022, respectively, and $181 million and $106 million for the nine months ended September 30, 2023 and 2022, respectively, which were generally indexed to LIBOR3 through June 30, 2023 and SOFR thereafter.

•Higher interest rates have provided us with the opportunity to reinvest at higher yields as our securities mature or as we invest a significant portion of consideration received from new business in fixed maturities.

We expect that the cumulative unrealized losses we have recognized on our fixed maturities since 2022 will be recouped as these assets get closer to their maturity and the prices pull to par. We may also undertake tactical repositioning of our portfolio as opportunities arise to achieve better investment yields, rather than waiting for certain fixed maturities to pull to par, which may result in the recognition of previously unrealized losses within our income statement with a corresponding reclassification adjustment in other comprehensive income (such adjustment would be neutral to equity since the unrealized losses are recorded as a component of accumulated other comprehensive income).

3 LIBOR was ceased on June 30, 2023 and replaced by the Secured Overnight Financing Rate (“SOFR”).

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Item 2 | Management's Discussion and Analysis | Liquidity and Capital Resources

Despite a stronger than expected start to the year, global equity markets are expected to remain volatile through the remainder of 2023, and this, combined with our reporting lag on certain investments, may impact the valuation of our non-core risk investments. We invest in public and private assets, which may vary in the magnitude of their exposure to any potential economic recession and other macroeconomic factors.

Despite these challenges, we remain committed to our strategic asset allocation and expect our non-core investments to provide attractive risk adjusted returns and diversification benefits over the medium to long term.

We expect to continue to benefit from our allocation to investments with inflationary pass-through components, including investments in private equity, private credit, real estate, and infrastructure asset classes.

Inflation

We continue to monitor the inflationary impacts resulting from pandemic-related government stimulus and labor force supply pressures on our loss cost trends.

Our Run-off net loss reserves primarily consist of general casualty, workers’ compensation and asbestos lines of business which, as long tailed lines of business, have not been significantly impacted by ongoing inflationary pressures in comparison to other lines of business, such as property and auto lines, where we are less exposed.

The currently observed and limited impact of economic inflation on our loss cost trends reflects a combination of the opportunity we have to re-price seasoned books of business upon their acquisition and our claims management model that seeks to settle claims in an efficient and responsive manner to protect and mitigate the impact to us from adverse outcomes.

Social inflation has been a persistent headwind for the industry for some time. While we do not currently see any new trends in the longer term trend of social inflation on certain claims, we continue to monitor claims in difficult legislative districts, seek to actively settle claims and monitor for reserving adequacy.

As described above, global economic policy responses to inflation have contributed to increases in interest rates, which, in the short term, have had a significant impact on our investments, in particular our fixed maturities. Any further rise in interest rates will have further negative impacts on our fixed maturities in the form of unrealized losses.

There remains uncertainty around the future of inflation. We continue to monitor liquidity, capital and the potential earnings impact of these changes but remain focused on medium to long term asset allocation decisions.

Inflation, tight labor conditions and higher service costs continue to put pressure on wages and prices, which could impact our general and administrative expenses as we remain focused on being a competitive employer in our market.

Banking Volatility

Following the instability in the banking sector earlier this year, we performed an analysis of, and continue to monitor, our investments, deposits, underwriting risks, LOC capacity and availability, and any other direct and indirect exposures we may have to the impacted U.S. regional banks and Credit Suisse Group AG. We have not identified any material direct or indirect exposures to date.

Geopolitical Conflicts

Heightened geopolitical conflicts, including the Russian invasion of Ukraine and the more recent conflict between Israel and Hamas, are directly and indirectly (through comprehensive sanctions regimes) contributing to increased commodity prices, disrupted supply chains, global financial market volatility and significant industry losses.

We continue to monitor our direct investment and underwriting risks and our acquisition pipeline as a result of these ongoing tensions. To date, the conflicts have not caused any operational disruption to us and our third party service providers, and we have no significant direct impacts from these events. We also continue to monitor for, and respond to, all changes in the global sanctions regime, updating our procedures accordingly.

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Item 2 | Management's Discussion and Analysis | Liquidity and Capital Resources

Liquidity and Capital Resources

Overview

We aim to generate cash flows from our (re)insurance operations and investments, preserve sufficient capital for future acquisitions and new business, and develop relationships with lenders who provide borrowing capacity at competitive rates.

Liquidity and Capital Resources Highlights

Sources of Cash During the Nine Months Ended September 30, 2023:

•We borrowed (and fully repaid) $150 million of loans under our revolving credit facility, which were used as a short term liquidity bridge4 to fund the repurchase of our outstanding non-voting convertible ordinary shares during the first quarter of 2023;

•We received cash, restricted cash and cash equivalents from the QBE and RACQ transactions of $402 million; and

•We received $94 million as consideration for the novation of the Enhanzed Re reinsurance closed block of life annuity policies.

Uses of Cash During the Nine Months Ended September 30, 2023:

•We repurchased 1,597,712 of our outstanding non-voting convertible ordinary shares for an aggregate price of $341 million;

•We repurchased the entire 24.9% ownership interest Allianz held in Enhanzed Re for $175 million; and

•We paid $27 million of cash dividends on our Series D and E Preferred Shares.

As of September 30, 2023 we had $497 million of cash and cash equivalents, excluding restricted cash, that supports (re)insurance operations. Included in this amount was $216 million held by our foreign subsidiaries outside of Bermuda. We closed 2022 with a solvency capital ratio of 210%. Based upon our strong financial fundamentals and funding sources available to us, we continue to believe we have access to adequate liquidity and capital resources to meet business requirements under current market conditions and reasonably possible stress scenarios for the foreseeable future. We continuously monitor our liquidity and capital positions and adjust as required by market conditions.

4 The drawdown was fully repaid in the first quarter 2023 once proceeds from the sale of fixed maturities, trading and equities was received.

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Item 2 | Management's Discussion and Analysis | Liquidity and Capital Resources

Under the eligible capital rules of the Bermuda Monetary Authority (“BMA”), our Preferred Shares qualify as Tier 2 capital when considering the Bermuda Solvency Capital Requirements (“BSCR”).

For purposes of the financial covenants in our credit facilities, total debt excludes hybrid capital (defined as our Subordinated Notes) not exceeding 15% of total capital attributable to Enstar. As of September 30, 2023, we were in compliance with the financial covenants in our credit facilities.

Liquidity and Capital Resources of Holding Company and subsidiaries

Holding Company Liquidity

We conduct substantially all of our operations through our subsidiaries. As such, the potential sources of liquidity to Enstar as a holding company consist of cashflows from our subsidiaries, including dividends, advances and loans, and interest income on loans to our subsidiaries. We also utilize credit loan facilities, and we have issued senior notes and preferred shares and guaranteed our Junior Subordinated Notes.

In May 2023, we and certain of our subsidiaries, as borrowers and guarantors, amended and restated our existing revolving credit agreement, which we entered in August 2018. The amendment increased the total commitments under the revolving credit facility from $600 million to $800 million and extended the expiry date to May 30, 2028. We have the option to request additional commitments under the facility by up to an aggregate amount of $200 million, which the existing lenders, in their discretion, or new lenders, may provide. Under the amended facility, we may borrow revolving loans or request the issuance of syndicated or fronted letters of credit, in each case on a senior, unsecured basis, and pricing will continue to be based on a per annum rate comprising a reference rate determined based on the type of loan we borrow plus a margin based on our long term senior unsecured debt ratings. As of September 30, 2023, we had $800 million of available unutilized capacity under this unsecured revolving credit agreement.

We use cash to fund new acquisitions of companies. We also utilize cash for our operating expenses associated with being a public company and to pay dividends on our preferred shares and interest and principal on loans from subsidiaries and debt obligations, including loans under our credit facilities, our Senior Notes and our Junior Subordinated Notes.

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Item 2 | Management's Discussion and Analysis | Liquidity and Capital Resources

We may, from time to time, raise capital from the issuance of equity, debt or other securities as we continuously evaluate our strategic opportunities. We filed an automatic shelf registration statement in March 2023 with the SEC to allow us to conduct future offerings of certain securities, if desired, including debt, equity and other securities.

As we are a holding company and have no substantial operations of our own, our assets consist primarily of investments in subsidiaries and our loans and advances to subsidiaries. Dividends from our (re)insurance subsidiaries are restricted by (re)insurance laws and regulations, as described below. The ability of all of our subsidiaries to make distributions and transfers to us may also be restricted by, among other things, other applicable laws and regulations and the terms of our credit facilities and our subsidiaries' bank loans and other issued debt instruments.

Based on our group's current corporate structure with a Bermuda domiciled parent company and the jurisdictions in which we operate, if the cash and cash equivalents held by our foreign subsidiaries were to be distributed to us, as dividends or otherwise, such amount would not be subject to incremental income taxes; however, in certain circumstances withholding taxes may be imposed by some jurisdictions, including by the United States.

Based on existing tax laws, regulations and our current intentions, there were no accruals as of September 30, 2023 for any material withholding taxes on dividends or other distributions.

U.S. Finance Company Liquidity

Enstar Finance is a wholly-owned finance subsidiary under which we have issued our Junior Subordinated Notes. Similar to our holding company, Enstar Finance is dependent upon funds from other subsidiaries to pay any amounts due under the Junior Subordinated Notes in the form of distributions or loans, which may be restricted by, among other things, other applicable laws and regulations and the terms of our credit facilities and our subsidiaries’ bank loans and other issued debt instruments.

Operating Company Liquidity

We expect that our operating companies will generate sufficient liquidity, together with our existing capital base and cash and investments acquired and from new business transactions, to meet cash requirements and to operate our business.

Sources of funds to our operating companies primarily consist of cash and investment portfolios acquired on the completion of acquisitions and new business, investment income earned, proceeds from sales and maturities of investments and collection of reinsurance recoverables. We also collect small amounts of premiums and fee and commission income.

Cash balances acquired upon the purchase of (re)insurance companies are classified as cash provided by investing activities, whereas cash from new business is classified as cash provided by operating activities.

The primary uses of funds by our operating companies are claims payments, investment purchases, operating expenses and collateral requirements.

The ability of our (re)insurance subsidiaries to pay dividends and make other distributions is limited by the applicable laws and regulations of the jurisdictions in which our (re)insurance subsidiaries operate, including Bermuda, the United Kingdom, the United States, Australia and Continental Europe, which subject these subsidiaries to significant regulatory restrictions.

These laws and regulations require, among other things, certain of our (re)insurance subsidiaries to maintain minimum capital requirements and limit the amount of dividends and other payments that these subsidiaries can pay to us, which in turn may limit our ability to pay dividends and make other payments.

As of September 30, 2023, to our knowledge, all of our (re)insurance subsidiaries’ capital requirement levels were in excess of the minimum levels required for their respective regulatory jurisdictions.

Our subsidiaries' ability to pay dividends and make other forms of distributions may also be limited by our repayment obligations under certain of our outstanding credit facility agreements and other debt instruments. Variability in ultimate loss payments and collateral amounts required may also result in increased liquidity requirements for our subsidiaries.

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Item 2 | Management's Discussion and Analysis | Liquidity and Capital Resources

Sources and Uses of Cash

Cash and cash equivalents decreased by $446 million for the nine months ended September 30, 2023, which was largely due to cash used in financing and investing activities of $542 million and $193 million, respectively, partially offset by cash provided by operating activities of $303 million.

Cash and cash equivalents decreased by $735 million for the nine months ended September 30, 2022, which was largely due to cash used in investing and financing activities of $1.1 billion and $31 million, respectively, partially offset by cash provided by operating activities of $340 million.


	Analysis of Sources and Uses of Cash
	Nine Months Ended September 30,
	2023		2022		$ Change
	(in millions of U.S. dollars)
Operating Cash Flow Activities
Net paid losses	$	(1,854)	$	(1,280)	$	(574)
Cash acquired on completion of acquisitions and new business	402		29		373
Net sales and maturities of trading securities (1)	758		1,573		(815)
Net investment income	373		291		82
Cash consideration received for novation	94		—		94
Other sources (uses) (1)	530		(273)		803
Net cash flows provided by operating activities	303		340		(37)
Investing Cash Flow Activities
Net purchase of AFS securities	(18)		(10)		(8)
Net purchases of other investments	(186)		(1,060)		874

Other sources	11		6		5
Net cash flows used in investing activities	(193)		(1,064)		871
Financing Cash Flow Activities
Net proceeds from loans	—		214		(214)
Preferred share dividends	(27)		(27)		—
Share repurchases	(340)		(163)		(177)
Dividends paid to noncontrolling interests	—		(55)		55
Acquisition of noncontrolling shareholders’ interest in subsidiary	(175)		—		(175)
Net cash flows used in financing activities	$	(542)	$	(31)	$	(511)

(1) The impact of the $1.5 billion of funds held - directly managed received as partial consideration for the QBE LPT transaction during the second quarter of 2023 is presented as a component of other sources (uses) in the above tabular disclosure.

Analysis of Sources and Uses of Cash

Operating Cash Flow Activities

2023 vs 2022: Cash provided by operating activities of $303 million for the nine months ended September 30, 2023 was driven by net sales and maturities of trading securities of $758 million and cash from other sources of $530 million, which was primarily generated by the release of funds held balances to cover net paid claims on certain portfolios, partially offset by the payment of general and administrative and interest expenses. We also received $402 million of cash as partial consideration for the QBE and RACQ LPTs, $373 million from receipt of net investment income and $94 million for the Enhanzed Re gain on novation. Partially offsetting these cash inflows was net paid losses of $1.9 billion. In comparison, cash provided by operating activities of $340 million for the nine months ended September 30, 2022 was driven by net sales and maturities of trading securities of $1.6 billion and net investment income received of $291 million, partially offset by net paid losses of $1.3 billion.

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Item 2 | Management's Discussion and Analysis | Liquidity and Capital Resources

Investing Cash Flow Activities

2023 vs 2022: Cash used in investing activities of $193 million for the nine months ended September 30, 2023 was primarily due to net purchases of other investments and fixed maturities, AFS of $186 million and $18 million, respectively. In comparison, cash used in investing activities of $1.1 billion for the nine months ended September 30, 2022 was primarily due to net purchases of other investments and fixed maturities, AFS of $1.1 billion and $10 million, respectively.

Financing Cash Flow Activities

2023 vs 2022: Cash used in financing activities of $542 million for the nine months ended September 30, 2023 was primarily driven by share repurchases of $340 million, as a result of our strategic repurchase of our non-voting convertible ordinary shares during the first quarter of 2023, in addition to Enhanzed Re’s repurchase of the entire 24.9% ownership interest Allianz held in Enhanzed Re for $175 million. In comparison, cash used in financing activities of $31 million for the nine months ended September 30, 2022 was largely driven by share repurchases of $163 million and dividends paid to our noncontrolling interests of $55 million, partially offset by net proceeds from loans of $214 million.

Debt Obligations

We utilize debt financing and loan facilities primarily for funding acquisitions and significant new business, investment activities and, from time to time, for general corporate purposes.

Our debt obligations as of September 30, 2023 and December 31, 2022 were as follows:


Facility	Origination Date	Term	September 30, 2023		December 31, 2022
			(in millions of U.S. dollars)

4.95% Senior Notes due 2029	May 2019	10 years	$	496	$	496
3.10% Senior Notes due 2031	August 2021	10 years	495		495
Total Senior Notes			991		991
5.75% Junior Subordinated Notes due 2040	August 2020	20 years	346		345
5.50% Junior Subordinated Notes due 2042	January 2022	20 years	494		493

Total Junior Subordinated Notes			840		838

Total debt obligations			$	1,831	$	1,829

Under the eligible capital rules of the BMA, the Senior Notes qualify as Tier 3 capital and the Junior Subordinated Notes qualify as Tier 2 capital when considering the BSCR.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases, redemptions and/or exchanges for other securities, in open market purchases, privately negotiated transactions or otherwise. Any such repurchases, redemptions or exchanges will be dependent upon several factors, including our liquidity requirements, contractual restrictions, general market conditions and applicable regulatory, legal and accounting factors.

Credit Ratings

The following table presents our credit ratings as of November 7, 2023:

Credit ratings (1)

Standard and Poor’s

Fitch Ratings

Long-term issuer

BBB+ (Outlook: Stable)

2029 Senior Notes

BBB+

BBB

2031 Senior Notes

BBB

2040 and 2042 Junior Subordinated Notes

BBB-

Series D and E Preferred Shares

BBB-

(1) Credit ratings are provided by third parties, Standard & Poor’s and Fitch Ratings, and are subject to certain limitations and disclaimers. For information on these ratings, refer to the rating agencies’ websites and other publications.

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Item 2 | Management's Discussion and Analysis | Liquidity and Capital Resources

Agency ratings are not a recommendation to buy, sell or hold any of our securities and may be revised or withdrawn at any time by the issuing organization. Each agency's rating should be evaluated independently of any other agency's rating5.

Contractual Obligations

The following table includes only material changes in our contractual obligations as disclosed in “Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2022, and primarily relate to changes resulting from the QBE LPT transaction.

As of September 30, 2023, our estimated payments for losses and LAE by expected payment date for the Run-off segment was as follows:


			Short-term		Long-term
	Total		Less than 1 Year		1 - 3 years		3 - 5 years		6 - 10 years		More than 10 Years
	(in millions of U.S. dollars)
Operating Activities
Estimated gross reserves for losses and LAE for the Run-off segment(1)
Asbestos	$	1,568	$	144	$	267	$	228	$	332	$	597
Environmental	334		43		69		51		74		97
General Casualty	4,255		707		981		649		1,326		592
Workers' compensation/personal accident	2,176		203		317		319		449		888
Marine, aviation and transit	362		128		116		48		37		33
Construction defect	313		75		107		34		65		32
Professional indemnity/ Directors and Officers	2,260		524		690		395		497		154
Motor	863		185		231		106		120		221
Property	381		137		133		54		44		13
All other	505		168		154		62		57		64

Total outstanding losses and IBNR	13,017		2,314		3,065		1,946		3,001		2,691

ULAE	411		78		101		59		83		90
Total estimated gross reserves for losses and LAE for the Run-off segment (1)	$	13,428	$	2,392	$	3,166	$	2,005	$	3,084	$	2,781

(1) The reserves for losses and LAE represent management’s estimate of the ultimate cost of settling losses. The estimation of losses is based on various complex and subjective judgments. Actual losses paid may differ, perhaps significantly, from the reserve estimates reflected in our condensed consolidated financial statements. Similarly, the timing of payment of our estimated losses is not fixed and there may be significant changes in actual payment activity. The assumptions used in estimating the likely payments due by period are based on our historical claims payment experience and industry payment patterns, but due to the inherent uncertainty in the process of estimating the timing of such payments, there is a risk that the amounts paid in any such period can be significantly different from the amounts disclosed above. The amounts in the above table represent our estimates of known liabilities as of September 30, 2023 and do not take into account corresponding reinsurance recoverable amounts that would be due to us. Furthermore, certain of the reserves included in the condensed consolidated financial statements as of September 30, 2023 were acquired by us and initially recorded at fair value with subsequent amortization, whereas the expected payments by period in the table above are the estimated payments at a future time and do not reflect the fair value adjustment in the amount payable.

Reserves for Losses and LAE

We generally attempt to match the duration of our investment portfolio to the duration of our general liability profile. We generally seek to maintain investment portfolios that are shorter or of equivalent duration to the liabilities in order to provide liquidity for the settlement of losses and, where possible, to avoid having to liquidate longer-dated investments. The settlement of liabilities also has the potential to accelerate the natural payout of losses, which may require additional liquidity. As of as of September 30, 2023 and December 31, 2022, the weighted average durations of our Run-off segment gross reserves for losses and LAE were 4.47 years and 4.65 years, respectively. The

5 For information on risks related to our credit ratings, refer to "Item 1A. Risk Factors - Risks Relating to Liquidity and Capital Resources" and "Item 1A. Risk Factors - Risks Relating to Ownership of our Shares" in our Annual Report on Form 10-K for the year ended December 31, 2022.

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Item 3 | Quantitative and Qualitative Disclosures About Market Risk

decrease from 2022 was driven by shorter average payouts from new acquisitions and an increase in corporate bond yield curves during the nine months ended September 30, 2023.

Share Repurchases and Dividends

We believe that the best investment is in our business, by funding future transactions and meeting our financing obligations. We may choose to return value to shareholders in the form of share repurchases or dividends. To date, we have not declared any dividends on our ordinary shares. For details on our share repurchase programs and strategic share repurchases, refer to Note 14 to our condensed consolidated financial statements. We may re-evaluate this strategy from time to time based on overall market conditions and other factors.

We have 16,000 Series D Preferred Shares with an aggregate liquidation value of $400 million and 4,400 Series E Preferred Shares with an aggregate liquidation value of $110 million. The dividends on both Series of Preferred Shares are non-cumulative and may be paid quarterly in arrears, only when, as and if declared.

Any payment of common or preferred dividends must be approved by our Board. Our ability to pay ordinary and preferred dividends is subject to certain restrictions.

Off-Balance Sheet Arrangements

As of September 30, 2023, we have entered into certain investment commitments and parental guarantees6. We also utilize unsecured and secured letters of credit7 and a deposit facility. We do not believe it is reasonably likely that these arrangements will have a material current or future effect on our financial condition, changes in financial condition, revenues and expenses, results of operations, liquidity, cash requirements or capital resources.


		Short-Term		Long-Term
		Less than 1 Year		More than 1 Year		Total
	(in millions of U.S. dollars)
Investing Activities
Unfunded investment commitments (1)		$	499	$	1,380	$	1,879
Financing Activities

Letters of credit		—		1,813		1,813

(1) Refer to Note 17 to our condensed consolidated financial statements as of and for the nine months ended September 30, 2023 for further details.

6 Refer to Note 17 to our condensed consolidated financial statements as of and for the nine months ended September 30, 2023 for further details.

7 Refer to Note 17 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 for further details.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are principally exposed to four types of market risk: interest rate risk, credit risk, equity price risk and foreign currency risk. For the nine months ended September 30, 2023, there were no material changes to these market risks or our policies to address these market risks, as disclosed in “Part II, Item 7A. Quantitative and Qualitative Disclosures about Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2022. Please see such section for a discussion of our exposure to and policies to address these market risks.

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ITEM 1. FINANCIAL STATEMENTS


CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			Page
Unaudited Condensed Consolidated Balance Sheets as of September 30, 2023 and December 31, 2022			62
Unaudited Condensed Consolidated Statements of Earnings for the three and nine months ended September 30, 2023 and 2022			63
Unaudited Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2023 and 2022			64
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2023 and 2022			65
Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022			67
Notes to the Unaudited Condensed Consolidated Financial Statements			69
Note 1 - Basis of Presentation			69
Note 2 - Significant New Business			70
Note 3 - Segment Information			71

Note 4 - Investments			73
Note 5 - Derivatives and Hedging Instruments			81
Note 6 - Deferred Charge Assets and Deferred Gain Liabilities			82

Note 7 - Losses and Loss Adjustment Expenses			82
Note 8 - Future Policyholder Benefits			88
Note 9 - Defendant Asbestos and Environmental Liabilities			90
Note 10 - Fair Value Measurements			91
Note 11 - Variable Interest Entities			98


Note 12 - Debt Obligations			99
Note 13 - Noncontrolling Interests			100
Note 14 - Shareholders' Equity			101
Note 15 - Earnings Per Share			104


Note 16 - Related Party Transactions			105
Note 17 - Commitments and Contingencies			109
Note 18 - Subsequent Events			110

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ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of September 30, 2023 and December 31, 2022


	September 30, 2023		December 31, 2022
	(expressed in millions of U.S. dollars, except share data)
ASSETS
Short-term investments, trading, at fair value	$	4	$	14
Short-term investments, available-for-sale, at fair value (amortized cost: 2023 — $59; 2022 — $37)	59		38
Fixed maturities, trading, at fair value	1,904		2,370

Fixed maturities, available-for-sale, at fair value (amortized cost: 2023 — $5,901; 2022 — $5,871; net of allowance: 2023 — $23; 2022 — $33)	5,267		5,223
Funds held - directly managed	2,678		2,040
Equities, at fair value (cost: 2023 — $831; 2022 — $1,357)	881		1,250
Other investments, at fair value (includes consolidated variable interest entity: 2023 - $63; 2022 - $3)	3,637		3,296

Equity method investments	409		397
Total investments (Note 4 and Note 10)	14,839		14,628
Cash and cash equivalents	497		822
Restricted cash and cash equivalents	387		508
Accrued interest receivable	74		72



Reinsurance balances recoverable on paid and unpaid losses (net of allowance: 2023 — $134; 2022 — $131)	735		856
Reinsurance balances recoverable on paid and unpaid losses, at fair value (Note 10)	214		275
Insurance balances recoverable (net of allowance: 2023 and 2022 — $5) (Note 9)	173		177
Funds held by reinsured companies	2,871		3,582



Net deferred charge assets (Note 6)	763		658
Other assets	478		576

TOTAL ASSETS	$	21,031	$	22,154

LIABILITIES
Losses and loss adjustment expenses (Note 7)	$	11,836	$	11,721
Losses and loss adjustment expenses, at fair value (Note 7 and Note 10)	1,108		1,286
Future policyholder benefits (Note 8)	—		821
Defendant asbestos and environmental liabilities (Note 9)	572		607

Insurance and reinsurance balances payable	230		100

Debt obligations (Note 12)	1,831		1,829

Other liabilities	384		462

TOTAL LIABILITIES	15,961		16,826

COMMITMENTS AND CONTINGENCIES (Note 17)
REDEEMABLE NONCONTROLLING INTERESTS (Note 13)	183		168

SHAREHOLDERS’ EQUITY (Note 14)

Ordinary shares (par value $1 each, issued and outstanding 2023: 16,031,203; 2022: 17,588,050):
Voting Ordinary shares (issued and outstanding 2023: 16,031,203; 2022: 15,990,338)	16		16

Non-voting convertible ordinary Series C Shares (issued and outstanding 2023: 0; 2022: 1,192,941)	—		1
Non-voting convertible ordinary Series E Shares (issued and outstanding 2023: 0; 2022: 404,771)	—		—
Preferred Shares:
Series C Preferred Shares (issued and held in treasury 2023 and 2022: 388,571)	—		—
Series D Preferred Shares (issued and outstanding 2023 and 2022: 16,000; liquidation preference $400)	400		400
Series E Preferred Shares (issued and outstanding 2023 and 2022: 4,400; liquidation preference $110)	110		110
Treasury shares, at cost (Series C Preferred shares 2023 and 2022: 388,571)	(422)		(422)
Joint Share Ownership Plan (voting ordinary shares, held in trust 2023 and 2022: 565,630)	(1)		(1)
Additional paid-in capital	455		766
Accumulated other comprehensive loss	(570)		(302)
Retained earnings	4,889		4,406
Total Enstar Shareholders’ Equity	4,877		4,974
Noncontrolling interests (Note 13)	10		186
TOTAL SHAREHOLDERS’ EQUITY	4,887		5,160
TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY	$	21,031	$	22,154

See accompanying notes to the unaudited condensed consolidated financial statements.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 63

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ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

For the Three and Nine Months Ended September 30, 2023 and 2022


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(expressed in millions of U.S. dollars, except share and per share data)
INCOME
Net premiums earned	$	14	$	4	$	29	$	52

Net investment income	143		116		471		302
Net realized losses	(14)		(36)		(33)		(111)
Net unrealized gains (losses)	20		(546)		200		(1,518)
Other (expense) income	(2)		(4)		280		33

Total income (loss)	161		(466)		947		(1,242)

EXPENSES
Net incurred losses and loss adjustment expenses
Current period	5		13		18		39
Prior periods	(15)		(141)		(35)		(476)
Total net incurred losses and loss adjustment expenses	(10)		(128)		(17)		(437)
Policyholder benefit expenses	—		7		—		25
Amortization of net deferred charge assets	34		21		75		60
Acquisition costs	—		—		6		20
General and administrative expenses	91		66		265		234
Interest expense	22		23		67		71
Net foreign exchange gains	(23)		(17)		(24)		(27)
Total expenses	114		(28)		372		(54)

EARNINGS (LOSS) BEFORE INCOME TAXES	47		(438)		575		(1,188)
Income tax benefit (expense)	7		(8)		12		(4)
(Losses) earnings from equity method investments	(3)		(20)		22		12


NET EARNINGS (LOSS)	51		(466)		609		(1,180)
Net (earnings) loss attributable to noncontrolling interests	(4)		43		(99)		74
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR	47		(423)		510		(1,106)
Dividends on preferred shares	(9)		(9)		(27)		(27)
NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS	$	38	$	(432)	$	483	$	(1,133)

Earnings (loss) per ordinary share attributable to Enstar Ordinary Shareholders:
Basic	$	2.46	$	(25.39)	$	30.26	$	(65.61)



Diluted	$	2.43	$	(25.39)	$	30.05	$	(65.61)



Weighted average ordinary shares outstanding:
Basic	15,464,824		17,013,348		15,962,910		17,269,870
Diluted	15,606,105		17,126,880		16,070,925		17,382,578

See accompanying notes to the unaudited condensed consolidated financial statements.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 64

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ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Nine Months Ended September 30, 2023 and 2022


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(expressed in millions of U.S. dollars)
NET EARNINGS (LOSS)	$	51	$	(466)	$	609	$	(1,180)

Other comprehensive income (loss), net of income taxes:
Unrealized losses on fixed maturities, available-for-sale arising during the period	(94)		(204)		(71)		(754)
Reclassification adjustment for change in allowance for credit losses recognized in net earnings	(1)		(3)		(5)		29
Reclassification adjustment for net realized losses included in net earnings	13		27		60		58

Unrealized losses arising during the period, net of reclassification adjustments	(82)		(180)		(16)		(667)


Remeasurement of future policyholder benefits - change in discount rate	—		134		—		314
Reclassification adjustment for remeasurement of future policyholder benefits included in net earnings	—		—		(363)		—
Change in currency translation adjustment	—		—		2		2
Change in net liability for losses and LAE at fair value - Instrument-specific credit risk	—		—		21		—
Other	—		(2)		—		(2)
Total other comprehensive loss	(82)		(48)		(356)		(353)

Comprehensive (loss) income	(31)		(514)		253		(1,533)
Comprehensive (income) loss attributable to noncontrolling interests	(4)		15		(11)		12
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO ENSTAR	$	(35)	$	(499)	$	242	$	(1,521)

See accompanying notes to the unaudited condensed consolidated financial statements.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 65

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ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the Three and Nine Months Ended September 30, 2023 and 2022


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(expressed in millions of U.S. dollars)
Share Capital — Voting Ordinary Shares
Balance, beginning of period	$	16	$	16	$	16	$	17

Shares repurchased	—		—		—		(1)

Balance, beginning and end of period	$	16	$	16	$	16	$	16




Share Capital — Non-Voting Convertible Ordinary Series C Shares
Balance, beginning of period	$	—	$	1	$	1	$	1
Shares repurchased	—		—		(1)		—

Balance, end of period	$	—	$	1	$	—	$	1
Share Capital — Non-Voting Convertible Ordinary Series E Shares



Balance, beginning and end of period	$	—	$	—	$	—	$	—
Share Capital — Series C Convertible Participating Non-Voting Preferred Shares


Balance, beginning and end of period	$	—	$	—	$	—	$	—
Share Capital — Series D Preferred Shares


Balance, beginning and end of period	$	400	$	400	$	400	$	400
Share Capital — Series E Preferred Shares


Balance, beginning and end of period	$	110	$	110	$	110	$	110
Treasury Shares (Series C Preferred Shares)
Balance, beginning and end of period	$	(422)	$	(422)	$	(422)	$	(422)
Joint Share Ownership Plan — Voting Ordinary Shares, Held in Trust


Balance, beginning and end of period	$	(1)	$	(1)	$	(1)	$	(1)
Additional Paid-in Capital
Balance, beginning of period	$	447	$	769	$	766	$	922
Repurchase of voting ordinary shares	—		(1)		(3)		(4)


Ordinary shares repurchased	—		—		(339)		(162)

Amortization of share-based compensation	8		(11)		22		1
Acquisition of noncontrolling shareholders’ interest in subsidiary	—		—		9		—
Balance, end of period	$	455	$	757	$	455	$	757
Accumulated Other Comprehensive (Loss) Income
Balance, beginning of period	$	(488)	$	(355)	$	(302)	$	(16)
Cumulative currency translation adjustment
Balance, beginning of period	11		11		9		9
Change in currency translation adjustment	—		—		2		2

Balance, end of period	11		11		11		11
Defined benefit pension liability
Balance, beginning of period	—		2		—		2
Change in defined benefit pension liability	—		(2)		—		(2)
Balance, and end of period	—		—		—		—
Unrealized (losses) gains on available-for-sale investments
Balance, beginning of period	(520)		(503)		(584)		(27)
Acquisition of noncontrolling shareholders’ interest in subsidiary	—		—		(9)		—
Change in unrealized losses on available-for-sale investments	(82)		(175)		(9)		(651)
Balance, end of period	(602)		(678)		(602)		(678)
Remeasurement of future policyholder benefits - change in discount rate
Balance, beginning of period (1)	—		135		273		—
Change in remeasurement of future policyholder benefits	—		101		(273)		236
Balance, end of period	—		236		—		236
Insurance contracts - net liability for losses and LAE at fair value - Instrument-specific credit risk
Balance, beginning of period	21		—		—		—
Change in net liability for losses and LAE at fair value - Instrument-specific credit risk	—		—		21		—
Balance, end of period	21		—		21		—
Balance, end of period	$	(570)	$	(431)	$	(570)	$	(431)

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Retained Earnings
Balance, beginning of period	$	4,851	$	4,611	$	4,406	$	5,312
Net earnings (loss)	51		(466)		609		(1,180)
Net (earnings) loss attributable to noncontrolling interests	(4)		43		(99)		74
Dividends on preferred shares	(9)		(9)		(27)		(27)


Balance, end of period	$	4,889	$	4,179	$	4,889	$	4,179
Noncontrolling Interests (excludes Redeemable Noncontrolling Interests)
Balance, beginning of period (1)	$	11	$	238	$	186	$	230
Consolidation of noncontrolling interests	—		—		3		—
Change in unrealized losses on available-for-sale investments attributable to noncontrolling interests	(1)		(2)		—		(8)

Acquisition of noncontrolling shareholders’ interest in subsidiary	—		(55)		(175)		(55)


Change in remeasurement of future policyholder benefits attributable to noncontrolling interests	—		33		(90)		78
Net (loss) earnings attributable to noncontrolling interests	—		(38)		86		(69)

Balance, end of period	$	10	$	176	$	10	$	176
Total Shareholders' Equity	$	4,887	$	4,785	$	4,887	$	4,785

(1) Accumulated other comprehensive (loss) earnings attributable to both Enstar and our noncontrolling interests as of January 1, 2023 has been retrospectively adjusted for all applicable prior periods for the impact of adopting ASU 2018-12 on January 1, 2023. Refer to Note 8 for additional information.

See accompanying notes to the unaudited condensed consolidated financial statements.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 67

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ENSTAR GROUP LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2023 and 2022


	Nine Months Ended September 30,
	2023		2022
	(expressed in millions of U.S. dollars)
OPERATING ACTIVITIES:
Net earnings (loss)	$	609	$	(1,180)

Adjustments to reconcile net earnings (loss) to cash flows provided by operating activities:
Realized losses on investments	33		111
Unrealized (gains) losses on investments	(200)		1,518
Amortization of net deferred charge assets	75		60
Depreciation and other amortization	(1)		38
Net gain on Enhanzed Re novation	(275)		—
Cash consideration for the Enhanzed Re novation	94		—
Earnings from equity method investments	(22)		(12)
Sales and maturities of trading securities	1,447		3,124
Purchases of trading securities and funds held - directly managed	(2,228)		(1,551)




Other adjustments	(11)		29
Changes in:
Reinsurance balances recoverable on paid and unpaid losses	145		329
Funds held by reinsured companies	689		(1,387)
Losses and loss adjustment expenses	(10)		(284)

Defendant asbestos and environmental liabilities	(35)		(21)
Insurance and reinsurance balances payable	164		(98)

Other operating assets and liabilities	(171)		(336)

Net cash flows provided by operating activities	303		340
INVESTING ACTIVITIES:


Sales and maturities of available-for-sale securities	1,571		1,704
Purchase of available-for-sale securities	(1,589)		(1,714)


Purchase of other investments	(610)		(1,379)
Proceeds from other investments	424		319


Other investing activities	11		6

Net cash flows used in investing activities	(193)		(1,064)
FINANCING ACTIVITIES:


Dividends on preferred shares	(27)		(27)



Dividends paid to redeemable noncontrolling interest	—		(55)
Acquisition of noncontrolling shareholders’ interest in subsidiary	(175)		—


Repurchase of shares	(340)		(163)
Issuance of debt, net of issuance costs (1)	—		494
Repayment of debt (1)	—		(280)
Net cash flows used in financing activities	(542)		(31)





EFFECT OF EXCHANGE RATE CHANGES ON FOREIGN CURRENCY CASH AND CASH EQUIVALENTS	(14)		20
NET DECREASE IN CASH AND CASH EQUIVALENTS	(446)		(735)
CASH, CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF PERIOD	1,330		2,092

CASH, CASH EQUIVALENTS AND RESTRICTED CASH, END OF PERIOD	$	884	$	1,357

(1) We borrowed and fully repaid $150 million of loans under our revolving credit facility during the first quarter of 2023.

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Supplemental Cash Flow Information:
Income taxes paid, net of refunds	$	7	$	2
Interest paid	$	66	$	70

Reconciliation to Consolidated Balance Sheets:
Cash and cash equivalents	$	497	$	923
Restricted cash and cash equivalents	387		434
Cash, cash equivalents and restricted cash	$	884	$	1,357

Non-cash operating activities:
Novation of future policy holder benefits	828		—
Funds held directly managed transferred in exchange on novation of future policy holder benefits	(949)		—
Other assets / liabilities transferred on novation of future policy holder benefits	(62)		—
Losses and loss adjustment expenses transferred in connection with settlement of participation in Atrium's Syndicate 609	173		—

Investments transferred in connection with settlement of participation in Atrium's Syndicate 609	(173)		—




Non-cash investing activities:









Unsettled purchases of available-for-sale securities and other investments	$	11	$	10
Unsettled sales of available-for-sale securities and other investments	(11)		(3)
Receipt of AFS debt securities as consideration in exchange for assumption of reinsurance contract liabilities	113		—

See accompanying notes to the unaudited condensed consolidated financial statements.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 69

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Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 2. Significant New Business

ENSTAR GROUP LIMITED

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

Enstar Group Limited ("Enstar") is a leading global (re)insurance group that offers capital release solutions through its network of group companies. Our core focus is acquiring and managing (re)insurance companies and portfolios of (re)insurance business in run-off.

These unaudited condensed consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States ("U.S. GAAP") for interim financial information and in conformity with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Rules and Regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the financial information and note disclosures required by U.S. GAAP for complete consolidated financial statements.

In the opinion of management, these unaudited condensed consolidated financial statements reflect all adjustments, that are normal and recurring in nature, necessary for a fair statement of the financial results for the interim periods. All intercompany accounts and transactions have been eliminated and certain comparative information has been reclassified to conform to the current presentation.

The results of operations for any interim period are not necessarily indicative of results for the full year. These unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022.

New Accounting Standards Adopted in 2023

ASU 2018-12 - Targeted Improvements to the Accounting for Long-Duration Contracts

In August 2018, the FASB issued ASU 2018-12 and subsequently issued ASUs 2019-09 and 2020-11 serving to defer the effective date of implementation. These updates:

•Require at least annual review of assumptions used to determine the provision for future policyholder benefits with the recognition of any resulting re-measurement gains or losses, excluding those related to discount rate changes, in the consolidated statement of earnings;

•Use upper-medium grade fixed-income instrument rates to discount future cash flows with the impact of these changes recognized in other comprehensive income; and

•Introduce new disclosure requirements around the provisions for future policyholder benefits, policyholder account balances, market risk benefits, separate account liabilities, and deferred acquisition costs (“DAC”), which includes information about significant inputs, judgments, assumptions and methods used in measurement.

These amendments are effective for interim and annual reporting periods beginning after December 15, 2022.

We adopted ASU 2018-12 on January 1, 2023 using the modified retrospective transition approach, with a transition date of September 1, 2021. This is the date that we acquired Enhanzed Re through a step acquisition and consolidated Enhanzed Re’s existing assets and liabilities, including all of our future policyholder benefit contracts. Prior to the acquisition of Enhanzed Re, we did not hold any long-duration insurance liabilities.

We recognized an increase to AOCI of $363 million to account for the impact of remeasuring our future policyholder benefits from September 1, 2021 to December 31, 2022. This measurement adjustment had the effect of reducing our long-duration insurance liabilities and was primarily driven by a change in the discount rates during 2022.

The adoption of this standard did not have a material impact on our shareholders’ equity as of the September 1, 2021 transition date, and the period between the transition date through to December 31, 2021.

Refer to Note 8 for the expanded future policyholder benefit disclosures required upon adoption of ASU 2018-12.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 70

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Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 3. Segment Information

2. SIGNIFICANT NEW BUSINESS

We define new business as material transactions, which generally take the form of reinsurance or direct business transfers, or business acquisitions.

Completed transactions

The table below sets forth a summary of new business that we have completed between January 1, 2023 and September 30, 2023:


Transaction	Consideration Received		Net Loss Reserves Assumed		DCA (1)		Type of Transaction	Remaining Limit upon Acquisition		Line of Business	Jurisdiction
	(in millions of U.S. dollars)
QBE (2)	$	1,857	$	2,036	$	179	LPT	$	838	Diversified mix of financial lines, casualty, multiline and discontinued business	North America and International
RACQ (3)	179		179		—		LPT	195		Motor vehicle Compulsory Third Party (“CTP”) liabilities	Australia





Total 2023	$	2,036	$	2,215	$	179

(1) Where the estimated ultimate losses payable exceed the consideration received at the inception of the agreement, a deferred charge asset (“DCA”) is recorded. Refer to Note 6 for additional information.

(2) Total consideration received is comprised of $1,539 million of funds held - directly managed and $344 million of restricted cash, net of consideration payable of $25 million.

(3) Total consideration received is comprised of $58 million of restricted cash, $113 million of investments and $8 million of funds held by reinsured companies.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 71

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Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 3. Segment Information

3. SEGMENT INFORMATION

Our segment structure is aligned with how our chief operating decision maker ("CODM"), who was determined to be our Chief Executive Officer, views our business, assesses performance and allocates resources to our business components. Our business is organized into four reportable segments: (i) Run-off; (ii) Assumed Life; (iii) Investments; and (iv) Legacy Underwriting. In addition, our Corporate and other activities, which do not qualify as an operating segment, include income and expense items that are not directly attributable to our reportable segments.

The Assumed Life segment previously included Enhanzed Re’s life and property aggregate excess of loss (catastrophe) business. In August 2022, Enhanzed Re entered into a Master Agreement with Cavello Bay Reinsurance Limited (“Cavello”), a wholly-owned subsidiary of Enstar, and Allianz SE (“Allianz”), pursuant to which a series of commutation and novation agreements were completed which ceased any continuing reinsurance obligations for this segment. We recognized the impact of transactions that closed in the fourth quarter of 2022 in the first quarter of 2023 due to the quarter lag in reporting.

The Legacy Underwriting segment comprises SGL No.1's 25% gross share of the 2020 and prior underwriting years of Atrium's Syndicate 609 at Lloyd's, offset by the contractual transfer of the results of that business to the Atrium entities that were divested in an exchange transaction (the “Exchange Transaction”). There is no net retention for Enstar on Atrium's 2020 and prior underwriting years. The contractual arrangements between SGL No. 1, Arden and Atrium relating to the reinsurance agreements and the Capacity Lease Agreement were settled in the second quarter of 2023. Other than the settlement of these amounts, we do not expect to record any transactions in the Legacy Underwriting segment in 2023.

Our assets are reviewed on a consolidated basis by management for decision making purposes since they support business operations across all of our four reportable segments as well as our corporate and other activities. We do not allocate assets to our reportable segments with the exception of (re)insurance balances recoverable on paid and unpaid losses and goodwill that are directly attributable to our reportable segments.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 72

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Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 4. Investments

The following table sets forth select unaudited condensed consolidated statement of earnings results by segment and our Corporate and other activities:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in millions of U.S. dollars)
Income
Run-off	$	15	$	3	$	40	$	46
Assumed Life	1		2		276		17
Investments	149		(464)		638		(1,323)
Legacy Underwriting	—		—		—		8
Subtotal	165		(459)		954		(1,252)
Corporate and other	(4)		(7)		(7)		10
Total income (loss)	$	161	$	(466)	$	947	$	(1,242)

(Losses) earnings from equity method investments
Investments	$	(3)	$	(20)	$	22	$	12

Segment net earnings (loss)
Run-off (1)	$	(3)	$	15	$	(42)	$	102
Assumed Life	1		(7)		276		15
Investments (1)	134		(493)		627		(1,337)
Legacy Underwriting	—		—		—		—
Total segment net earnings (loss)	132		(485)		861		(1,220)
Corporate and other:


Other (expense) income (2)	(4)		(7)		(7)		10

Net incurred losses and loss adjustment expenses (“LAE”) (3)	(16)		78		(37)		217

Amortization of net deferred charge assets	(34)		(21)		(75)		(60)
General and administrative expenses (1)	(35)		(17)		(102)		(79)
Interest expense	(22)		(23)		(67)		(71)
Net foreign exchange gains	23		17		24		27
Income tax benefit (expense)	7		(8)		12		(4)

Net (earnings) loss attributable to noncontrolling interests	(4)		43		(99)		74
Dividends on preferred shares	(9)		(9)		(27)		(27)
Total - Corporate and other (loss) income	(94)		53		(378)		87
Net earnings (loss) attributable to Enstar Ordinary Shareholders	$	38	$	(432)	$	483	$	(1,133)

(1) Third quarter 2022 presentation of segment results include an adjustment made to correct immaterial errors related to the allocation of expenses. For the three and nine months ended September 30, 2022, Run-off segment general and administrative expenses increased by $4 million and $14 million, respectively, Investment segment general and administrative expenses decreased by $0 and $2 million, respectively, and Corporate and other activities general and administrative expenses decreased by $4 million and $12 million, respectively.

(2) Other income (expense) for corporate and other activities includes the amortization of fair value adjustments associated with the acquisition of DCo and Morse TEC.

(3) Net incurred losses and LAE for corporate and other activities includes fair value adjustments associated with the acquisition of companies and the changes in the discount rate and risk margin components of the fair value of assets and liabilities related to our assumed retroactive reinsurance contracts for which we have elected the fair value option.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 73

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Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 4. Investments

4. INVESTMENTS

Short-term and Fixed Maturity Investments

Asset Types

The fair values of the following underlying asset categories are set out below:


	September 30, 2023
	Short-term investments, trading		Short-term investments, AFS		Fixed maturities, trading		Fixed maturities, AFS		Fixed maturities, funds held - directly managed		Total
	(in millions of U.S. dollars)
U.S. government and agency	$	—	$	28	$	47	$	245	$	153	$	473
U.K. government	—		—		19		41		46		106
Other government	—		3		131		263		36		433
Corporate	4		28		1,322		2,780		1,248		5,382
Municipal	—		—		46		81		47		174
Residential mortgage-backed	—		—		56		352		188		596
Commercial mortgage-backed	—		—		139		710		229		1,078
Asset-backed	—		—		144		795		269		1,208


Total fixed maturity and short-term investments	$	4	$	59	$	1,904	$	5,267	$	2,216	$	9,450


	December 31, 2022
	Short-term investments, trading		Short-term investments, AFS		Fixed maturities, trading		Fixed maturities, AFS		Fixed maturities, funds held - directly managed		Total
	(in millions of U.S. dollars)
U.S. government and agency	$	14	$	10	$	64	$	300	$	128	$	516
U.K. government	—		3		42		33		4		82
Other government	—		—		188		131		143		462
Corporate (1)	—		25		1,594		2,988		679		5,286
Municipal	—		—		59		99		53		211
Residential mortgage-backed	—		—		77		362		113		552
Commercial mortgage-backed	—		—		191		628		203		1,022
Asset-backed	—		—		155		682		77		914
Structured Products	—		—		—		—		586		586

Total fixed maturity and short-term investments	$	14	$	38	$	2,370	$	5,223	$	1,986	$	9,631

(1) Includes convertible bonds of $223 million, which includes embedded derivatives of $34 million.

Included within residential mortgage-backed securities as of September 30, 2023 were securities issued by U.S. governmental agencies with a fair value of $357 million (December 31, 2022: $360 million).

Included within commercial mortgage-backed securities as of September 30, 2023 were securities issued by U.S. governmental agencies with a fair value of $71 million (December 31, 2022: $69 million).

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 74

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 4. Investments

Contractual Maturities

The contractual maturities of our short-term and fixed maturity investments, classified as trading and AFS, and the fixed maturity investments included within our funds held - directly managed balance are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call or prepayment penalties.


As of September 30, 2023	Amortized Cost		Fair Value		% of Total Fair Value
	(in millions of U.S. dollars)
One year or less	$	630	$	619	6.6	%


More than one year through five years	3,145		2,922		30.9	%
More than five years through ten years	2,048		1,757		18.6	%
More than ten years	1,773		1,270		13.4	%
Residential mortgage-backed	670		596		6.3	%
Commercial mortgage-backed	1,180		1,078		11.4	%
Asset-backed	1,226		1,208		12.8	%


	$	10,672	$	9,450	100.0	%

Unrealized Gains and Losses on AFS Short-term and Fixed Maturity Investments

The amortized cost, unrealized gains and losses, allowance for credit losses and fair values of our short-term and fixed maturity investments classified as AFS were as follows:


			Gross Unrealized Gains		Gross Unrealized Losses
As of September 30, 2023	Amortized Cost				Non-Credit Related Losses		Allowance for Credit Losses		Fair Value
	(in millions of U.S. dollars)
U.S. government and agency	$	301	$	—	$	(28)	$	—	$	273
U.K. government	44		1		(4)		—		41
Other government	287		1		(22)		—		266
Corporate	3,239		1		(410)		(22)		2,808
Municipal	102		—		(21)		—		81
Residential mortgage-backed	407		—		(55)		—		352
Commercial mortgage-backed	776		1		(66)		(1)		710
Asset-backed	804		5		(14)		—		795


	$	5,960	$	9	$	(620)	$	(23)	$	5,326


			Gross Unrealized Gains		Gross Unrealized Losses
As of December 31, 2022	Amortized Cost				Non-Credit Related Losses		Allowance for Credit Losses		Fair Value
	(in millions of U.S. dollars)
U.S. government and agency	$	338	$	—	$	(28)	$	—	$	310
U.K. government	36		2		(2)		—		36
Other government	146		1		(15)		(1)		131
Corporate	3,466		7		(428)		(32)		3,013
Municipal	120		1		(22)		—		99
Residential mortgage-backed	407		—		(45)		—		362
Commercial mortgage-backed	689		2		(63)		—		628
Asset-backed	706		1		(25)		—		682


	$	5,908	$	14	$	(628)	$	(33)	$	5,261

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 75

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 4. Investments

Gross Unrealized Losses on AFS Short-term and Fixed Maturity Investments

The following tables summarizes our short-term and fixed maturity investments classified as AFS that were in a gross unrealized loss position, for which an allowance for credit losses has not been recorded, as explained below:


	12 Months or Greater				Less Than 12 Months				Total
As of September 30, 2023	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions of U.S. dollars)
U.S. government and agency	$	180	$	(25)	$	84	$	(3)	$	264	$	(28)
U.K. government	9		(2)		18		(2)		27		(4)
Other government	90		(15)		167		(7)		257		(22)
Corporate	1,847		(375)		904		(35)		2,751		(410)
Municipal	74		(20)		8		(1)		82		(21)
Residential mortgage-backed	251		(51)		90		(4)		341		(55)
Commercial mortgage-backed	418		(57)		237		(9)		655		(66)
Asset-backed	345		(11)		211		(3)		556		(14)


Total short-term and fixed maturity investments	$	3,214	$	(556)	$	1,719	$	(64)	$	4,933	$	(620)


	12 Months or Greater				Less Than 12 Months				Total
As of December 31, 2022	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(in millions of U.S. dollars)
U.S. government and agency	$	188	$	(19)	$	112	$	(9)	$	300	$	(28)
U.K. government	1		—		10		(2)		11		(2)
Other government	25		(4)		89		(11)		114		(15)
Corporate	1,261		(246)		1,542		(182)		2,803		(428)
Municipal	58		(14)		32		(8)		90		(22)
Residential mortgage-backed	185		(35)		154		(10)		339		(45)
Commercial mortgage-backed	277		(43)		275		(20)		552		(63)
Asset-backed	186		(10)		357		(15)		543		(25)


Total short-term and fixed maturity investments	$	2,181	$	(371)	$	2,571	$	(257)	$	4,752	$	(628)

As of September 30, 2023 and December 31, 2022, the number of securities classified as AFS in an unrealized loss position for which an allowance for credit loss is not recorded was 3,170 and 2,935, respectively. Of these securities, the number of securities that had been in an unrealized loss position for twelve months or longer was 1,880 and 1,155, respectively.

The contractual terms of a majority of these investments do not permit the issuers to settle the securities at a price less than the amortized cost basis of the security. While interest rates have increased and credit spreads have widened, and in certain cases credit ratings were downgraded, we currently do not expect the issuers of these fixed maturities to settle them at a price less than their amortized cost basis and therefore it is expected that we will recover the entire amortized cost basis of each security. Furthermore, we do not intend to sell the securities that are currently in an unrealized loss position, and it is also not more likely than not that we will be required to sell the securities before the recovery of their amortized cost bases.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 76

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 4. Investments

Allowance for Credit Losses on AFS Fixed Maturity Investments

The following table provides a reconciliation of the beginning and ending allowance for credit losses on our AFS debt securities:


	Three Months Ended September 30,
	2023						2022
	Other government		Corporate		Commercial mortgage backed		Total		Corporate		Total
	(in millions of U.S. dollars)
Allowance for credit losses, beginning of period	$	—	$	(22)	$	(2)	$	(24)	$	(42)	$	(42)

Allowances for credit losses on securities for which credit losses were not previously recorded	—		—		(1)		(1)		(2)		(2)

Reductions for securities sold during the period	—		—		—		—		4		4

Decrease to the allowance for credit losses on securities that had an allowance recorded in the previous period	—		—		2		2		5		5


Allowance for credit losses, end of period	$	—	$	(22)	$	(1)	$	(23)	$	(35)	$	(35)


	Nine Months Ended September 30,
	2023						2022
	Other government		Corporate		Commercial mortgage backed		Total		Corporate		Total
	(in millions of U.S. dollars)
Allowance for credit losses, beginning of period	$	(1)	$	(32)	$	—	$	(33)	$	(10)	$	(10)

Allowances for credit losses on securities for which credit losses were not previously recorded	—		(3)		(3)		(6)		(30)		(30)

Reductions for securities sold during the period	—		5		—		5		4		4

Decrease to the allowance for credit losses on securities that had an allowance recorded in the previous period	1		8		2		11		1		1


Allowance for credit losses, end of period	$	—	$	(22)	$	(1)	$	(23)	$	(35)	$	(35)

During the three and nine months ended September 30, 2023 and 2022, we did not have any write-offs charged against the allowance for credit losses or any recoveries of amounts previously written off.

Equity Investments

The following table summarizes our equity investments:


	September 30, 2023		December 31, 2022
	(in millions of U.S. dollars)
Equity Investments
Publicly traded equity investments in common and preferred stocks	$	239	$	385
Exchange-traded funds	276		507
Privately held equity investments in common and preferred stocks	366		358
	$	881	$	1,250

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 77

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 4. Investments

Other Investments

The following table summarizes our other investments carried at fair value:




	September 30, 2023		December 31, 2022
	(in millions of U.S. dollars)
Other Investments
Hedge funds	$	515	$	549
Fixed income funds	504		547
Private equity funds	1,559		1,282
Private credit funds	548		362
Equity funds	4		3
CLO equity funds	208		203
CLO equities	59		148
Real estate funds	240		202

	$	3,637	$	3,296

Other investments, including equities measured at fair value using NAV as a practical expedient

We use NAV as a practical expedient to fair value certain of our other investments, including equities.

The table below details the estimated period by which proceeds would be received if we had provided notice of our intent to redeem or initiated a sales process as of September 30, 2023 for our investments measured at fair value using NAV as a practical expedient:


	Less than 1 Year		1-2 years		2-3 years		More than 3 years		Not Eligible/ Restricted		Total		Redemption Frequency
	(in millions of U.S. dollars)
Equities
Privately held equity investments	$	—	$	—	$	—	$	—	$	43	$	43	N/A

Other investments
Hedge funds	$	515	$	—	$	—	$	—	$	—	$	515	monthly to bi-annually
Fixed income funds	377		—		—		—		58		435		monthly to quarterly
Private equity funds	—		61		—		—		1,498		1,559		quarterly for unrestricted amount
Private credit funds	—		—		—		—		426		426		N/A

CLO equity funds	175		31		—		—		2		208		quarterly to bi-annually

Real estate funds	—		—		—		—		240		240		N/A


	$	1,067	$	92	$	—	$	—	$	2,267	$	3,426

As of September 30, 2023, $39 million of our investments were subject to gates or side-pockets.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 78

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 4. Investments

Funds Held

Funds Held - Directly Managed

The following table summarizes the components of the investments collateralizing the funds held - directly managed:


	September 30, 2023		December 31, 2022
	(in millions of U.S. dollars)
Short-term and fixed maturity investments, trading	$	2,216	$	1,986
Equities	68		—
Other investments	97		—

Short-term and fixed maturity investments, equities and other investments within funds held - directly managed, at fair value	2,381		1,986
Cash and cash equivalents	276		41
Other assets	21		13
Funds held - directly managed	$	2,678	$	2,040

The following table summarizes the short-term and fixed maturities and other investments, including equities components of our funds held - directly managed:


	September 30, 2023		December 31, 2022

	(in millions of U.S. dollars)
Short-term and fixed maturity investments, at amortized cost, and equities and other investments, at cost	$	2,605	$	2,765
Net unrealized losses:

Accumulated change in fair value - embedded derivative	(224)		(572)
Accumulated change in fair value (1)	—		(207)
Short-term and fixed maturity investments, equities and other investments within funds held - directly managed, at fair value	$	2,381	$	1,986

(1) Is clearly and closely related to the host contract.

The $638 million increase in funds held - directly managed from December 31, 2022 to September 30, 2023 was primarily driven by an LPT transaction with QBE completed during the second quarter of 2023, partially offset by the derecognition of the assets supporting the Enhanzed Re reinsurance of a closed block of life annuity policies that were novated during the first quarter of 2023.

Refer to the sections above for details of the short-term and fixed maturity investments within our funds held - directly managed portfolios.

Funds Held by Reinsured Companies

As of September 30, 2023 and December 31, 2022, we had funds held by reinsured companies of $2.9 billion and $3.6 billion, respectively.

Pursuant to the terms of the Aspen Insurance Holdings transaction entered in the second quarter 2022, in addition to earning a fixed crediting rate (“base crediting rate”) on the funds withheld, as of October 1, 2022 and through September 30, 2025 we will also receive a variable return (together, the “full crediting rate”).

The nature of the arrangement results in an embedded derivative, which represents the fair value of the amount by which all future interest payments on the funds withheld balance made at the full crediting rate are expected to exceed all future interest payments made on the funds withheld balance at the base crediting rate.

The following table summarizes the components of our funds held by reinsured companies:


	September 30, 2023		December 31, 2022
	(in millions of U.S. dollars)
Fund held by reinsurance companies, at amortized cost	$	2,828	$	3,538



Fair value of embedded derivative	43		44
Funds held by reinsured companies	$	2,871	$	3,582

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 79

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 4. Investments

Net Investment Income

Major categories of net investment income are summarized as follows:



	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in millions of U.S. dollars)
Fixed maturity investments	$	85	$	60	$	245	$	167
Short-term investments and cash and cash equivalents	11		2		28		4
Funds held by reinsured companies	9		17		88		49
Funds held - directly managed	29		19		62		38
Investment income from fixed maturities and cash and cash equivalents	134		98		423		258
Equity investments	7		11		31		30
Other investments	8		11		31		33

Investment income from equities and other investments	15		22		62		63
Gross investment income	149		120		485		321
Investment expenses	(6)		(4)		(14)		(19)

Net investment income	$	143	$	116	$	471	$	302

Net Realized and Unrealized Gains (Losses)

Components of net realized and unrealized gains (losses) were as follows:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in millions of U.S. dollars)
Net realized losses on sales:
Gross realized gains on fixed maturity securities, AFS	$	2	$	3	$	4	$	5
Gross realized losses on fixed maturity securities, AFS	(15)		(29)		(64)		(63)
Decrease (increase) in allowance for expected credit losses on fixed maturity securities, AFS	1		3		5		(30)
	(12)		(23)		(55)		(88)

Net realized losses on funds held - directly managed	—		—		(7)		—
Net (losses) gains recognized on equity securities sold during the period	—		(11)		23		(21)

Net realized investment (losses) gains on investment derivatives	(2)		(2)		6		(2)

Total net realized losses on sales	$	(14)	$	(36)	$	(33)	$	(111)
Net unrealized gains (losses):
Fixed maturity securities, trading	$	(22)	$	(157)	$	(24)	$	(556)
Fixed maturity securities, equities and other investments in funds held - directly managed	(46)		(238)		(42)		(517)
Net unrealized gains (losses) recognized on equity securities still held at the reporting date	17		(82)		86		(284)
Other investments	68		(65)		180		(141)
Investment derivatives	3		(4)		—		(20)

Total net unrealized gains (losses)	$	20	$	(546)	$	200	$	(1,518)
Net realized and unrealized gains (losses)	$	6	$	(582)	$	167	$	(1,629)

The gross realized gains and losses on AFS investments for the three months ended September 30, 2023 and 2022 included in the table above resulted from sales of $316 million and $409 million, respectively. The gross realized gains and losses on AFS investments for the nine months ended September 30, 2023 and 2022 included in the table above resulted from sales of $1.3 billion and $1.4 billion, respectively.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 80

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 5. Derivatives and Hedging Instruments

Restricted Assets

The carrying value of our restricted assets, including restricted cash of $387 million and $508 million, as of September 30, 2023 and December 31, 2022, respectively, was as follows:


	September 30, 2023		December 31, 2022
	(in millions of U.S. dollars)
Collateral in trust for third party agreements	$	5,349	$	5,343
Assets on deposit with regulatory authorities	73		159
Collateral for secured letter of credit facilities	68		82
Funds at Lloyd's ("FAL") (1)	359		365
	$	5,849	$	5,949

(1) We managed and provided capacity for one Lloyd's syndicate as of September 30, 2023 (December 31, 2022: we managed and/or provided capacity for three Lloyd’s syndicates). Lloyd's determines the required capital principally through the use of an internal model that calculates a solvency capital requirement for each syndicate. This capital is referred to as FAL and will be drawn upon in the event that a syndicate has a loss that cannot be funded from other sources. We also utilize unsecured letters of credit for a significant portion of our FAL.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 81

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 6. Deferred Charge Assets and Deferred Gain Liabilities

5. DERIVATIVES AND HEDGING INSTRUMENTS

We use derivative instruments in our risk management strategies and investment operations.

Foreign currency forward exchange rate contracts are used in qualifying hedging relationships to hedge the foreign currency exchange rate risk associated with certain of our net investments in foreign operations.

We also utilize foreign currency forward contracts in non-qualifying hedging relationships as part of our overall foreign currency risk management strategy or to obtain exposure to a particular financial market, as well as for yield enhancement and collectively managing credit and duration risk.

In February 2023, we entered into a two-month forward starting receive fixed, pay floating interest rate swap with a notional value of $800 million to partially mitigate the risk that interest rates could decrease prior to our receipt of the cash consideration for the QBE LPT transaction. Following the expiration of the forward period in April 2023, we took delivery of a three-year receive fixed, pay floating interest rate swap. The notional value of the swap was subsequently partially unwound as the consideration received was invested. The swap was fully unwound in July 2023. For the three and nine months ended September 30, 2023, we recorded net realized and unrealized losses of $1 million and net realized and unrealized gains of $7 million, respectively.

From time to time, consolidated funds in which we invest may utilize credit default swaps to both hedge and replicate credit exposure and government bond futures contracts for interest rate management.

The following table presents the gross notional amounts and estimated fair values of our derivatives recorded within other assets and other liabilities on the consolidated balance sheets as of September 30, 2023 and December 31, 2022:


	September 30, 2023						December 31, 2022
	Gross Notional Amount		Fair Value				Gross Notional Amount		Fair Value
			Assets		Liabilities				Assets		Liabilities
	(in millions of U.S. dollars)
Derivatives designated as hedging instruments
Foreign currency forward contracts	$	392	$	10	$	—	$	442	$	1	$	11

Derivatives not designated as hedging instruments
Foreign currency forward contracts	301		3		4		244		5		1

Others	9		—		—		7		—		—
Total	$	702	$	13	$	4	$	693	$	6	$	12

The following table presents the net gains and losses deferred in the cumulative translation adjustment account, which is a component of AOCI in shareholders' equity, relating to our qualifying hedges and the net gains and losses included in earnings relating to our non-qualifying hedges for the three and nine months ended September 30, 2023 and 2022:


	Amount of Net Gains (Losses)
	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
	(in millions of U.S. dollars)
Derivatives designated as hedging instruments
Foreign currency forward contracts	$	15	$	39	$	3	$	91

Derivatives not designated as hedging instruments
Foreign currency forward contracts	(4)		(5)		1		(15)
Interest rate swap	(1)		—		7		—

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 82

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 7. Losses and Loss Adjustment Expenses

6. DEFERRED CHARGE ASSETS AND DEFERRED GAIN LIABILITIES

If, at the inception of a retroactive reinsurance contract, the estimated liabilities for losses and LAE exceed the consideration received, a deferred charge asset (“DCA”) is recorded for this difference. In contrast, if the consideration received is in excess of the estimated undiscounted ultimate losses payable, a deferred gain liability (“DGL”) is recorded.

We amortize the net DCA balances over the estimated claim payment period of the related contracts with the amortization prospectively adjusted at each reporting period to reflect new estimates of the pattern and timing of remaining losses and LAE payments.

Effective December 31, 2022, we voluntarily changed our accounting policy for calculating the amortization of our DCAs1. Previously, any change in ultimate losses on the contracts with a recognized DCA would result in the recognition of an adjustment to the DCA, as if the adjusted reserves had existed upon inception of the contract. The policy modification eliminated adjustments of the DCA for these events.

We have retrospectively applied this change in accounting policy to all applicable prior period information presented herein as required.

The following table presents a summary of the DCA and DGL balances and related activity for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended September 30,
	2023		2022
	DCA		Net		DCA		DGL		Net
	(in millions of U.S. dollars)
Beginning carrying value	$	797	$	797	$	606	$	—	$	606
Recorded during the period	—		—		1		—		1

Amortization	(34)		(34)		(21)		—		(21)

Ending carrying value	$	763	$	763	$	586	$	—	$	586

	Nine Months Ended September 30,
	2023		2022
	DCA		Net		DCA		DGL		Net
	(in millions of U.S. dollars)
Beginning carrying value	$	658	$	658	$	599	$	1	$	598
Recorded during the period	180		180		48		—		48

Amortization	(75)		(75)		(61)		(1)		(60)

Ending carrying value	$	763	$	763	$	586	$	—	$	586

1 Refer to Note 2 and Note 9 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2022 for additional information.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 83

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 7. Losses and Loss Adjustment Expenses

7. LOSSES AND LOSS ADJUSTMENT EXPENSES

The liability for losses and LAE, also referred to as loss reserves, represents our gross estimates before reinsurance for unpaid reported losses (Outstanding Loss Reserves, or "OLR") and includes losses that have been incurred but not yet reported ("IBNR") using a variety of actuarial methods. We recognize an asset for the portion of the liability that we expect to recover from reinsurers. LAE reserves include allocated LAE ("ALAE") and unallocated LAE ("ULAE"). ALAE are linked to the settlement of an individual claim or loss, whereas ULAE are based on our estimates of future costs to administer the claims. IBNR includes amounts for unreported claims, development on known claims and reopened claims.

Our loss reserves cover multiple lines of business, including asbestos, environmental, general casualty, workers' compensation, marine, aviation and transit, construction defect, professional indemnity/directors and officers, motor, property and other non-life lines of business.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 84

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 7. Losses and Loss Adjustment Expenses

The table below provides a consolidated reconciliation of the beginning and ending liability for losses and LAE:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in millions of U.S. dollars)
Balance as of beginning of period	$	13,834	$	13,641	$	13,007	$	13,258



Reinsurance reserves recoverable (1)	(895)		(1,117)		(996)		(1,332)





Net balance as of beginning of period	12,939		12,524		12,011		11,926
Net incurred losses and LAE:
Current period:
Increase in estimates of net ultimate losses	5		12		18		37
Increase in provisions for ULAE	—		1		—		2
Total current period	5		13		18		39
Prior periods:
Reduction in estimates of net ultimate losses	(12)		(48)		(35)		(209)
Reduction in provisions for ULAE	(19)		(15)		(37)		(50)

Amortization of fair value adjustments	4		4		13		11
Changes in fair value - fair value option (2)	12		(82)		24		(228)
Total prior periods	(15)		(141)		(35)		(476)
Total net incurred losses and LAE	(10)		(128)		(17)		(437)
Net paid losses:
Current period	(1)		(2)		(3)		(3)
Prior periods	(664)		(450)		(1,851)		(1,277)
Total net paid losses	(665)		(452)		(1,854)		(1,280)
Other changes:
Effect of exchange rate movement	(109)		(196)		(40)		(371)
Change in net liability for losses and LAE at fair value - Instrument-specific credit risk	—		—		(21)		—
Ceded business (3)	—		—		(139)		—

Assumed business	—		71		2,215		1,981


Total other changes	(109)		(125)		2,015		1,610
Net balance as of September 30	12,155		11,819		12,155		11,819
Reinsurance reserves recoverable (1)	789		1,016		789		1,016

Balance as of September 30	$	12,944	$	12,835	$	12,944	$	12,835

					As of
					September 30, 2023		December 31, 2022
					(in millions of U.S. dollars)
Reconciliation to Consolidated Balance Sheets:
Losses and loss adjustment expenses					$	11,836	$	11,721
Losses and loss adjustment expenses, at fair value					1,108		1,286
Total losses and loss adjustment expenses					$	12,944	$	13,007

Reinsurance balances recoverable on paid and unpaid losses					$	735	$	856
Reinsurance balances recoverable on paid and unpaid losses - fair value option					214		275
Total reinsurance balances recoverable on paid and unpaid losses					949		1,131
Paid losses recoverable					(160)		(135)

Reinsurance reserves recoverable (1)					$	789	$	996

(1) Excludes paid losses recoverable.

(2) Comprises discount rate and risk margin components.

(3) Represents the settlement of our participation in Atrium’s Syndicate 609 relating to the 2020 and prior underwriting years, comprised of losses and LAE expenses of $173 million, net of reinsurance reserves recoverable of $34 million.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 85

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 7. Losses and Loss Adjustment Expenses

Prior Period Development

Reduction in Estimates of Net Ultimate Losses

The following table summarizes the change in estimates of net ultimate losses related to prior years by segment and line of business:


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
	(in millions of U.S. dollars)
Run-off segment:
Asbestos	$	(1)	$	(8)	$	—	$	(7)
Environmental	2		3		2		1
General casualty	41		21		37		31
Workers' compensation	(24)		(54)		(44)		(104)
Marine, aviation and transit	(13)		(28)		(13)		(38)
Construction defect	(3)		(3)		(4)		(10)
Professional indemnity/Directors and Officers	(9)		(4)		(10)		(85)
Motor	(5)		19		(5)		20
Property	(17)		—		(16)		5
All Other	17		8		18		4
Total Run-off segment	(12)		(46)		(35)		(183)
Total Assumed Life segment	—		—		—		(29)
Total Legacy Underwriting segment	—		(2)		—		3
Total	$	(12)	$	(48)	$	(35)	$	(209)

Three Months Ended September 30, 2023:

The prior period reduction in estimates of net ultimate losses of $12 million was driven by favorable development across multiple Run-off segment lines of business. We recognized favorable development on our workers’ compensation and property lines of business of $24 million and $17 million, respectively, as a result of favorable claims experience.

The results were partially offset by adverse development on our general casualty line of business of $41 million, primarily due to a small number of large losses across several portfolios, particularly on excess business, and adverse development on our all other line of business of $17 million, driven by identified deterioration on abuse claims.

Three Months Ended September 30, 2022:

The reduction in estimates of net ultimate losses of $48 million related to prior periods was driven by the Run-off segment, primarily due to $54 million of favorable development on our workers’ compensation line of business as a result of favorable claim settlements, and $28 million of favorable development on our marine, aviation and transit line of business as a result of lower claim activity. We also experienced favorable development on our construction defect line of business as a result of better than expected claims experience; however, this was largely offset by adverse development as a result of inflationary increases impacting our construction exposures.

The results were partially offset by adverse development on our general casualty and motor lines of business of $21 million and $19 million, respectively, primarily due to worse than expected claims experience and adverse development on claims.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 86

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 7. Losses and Loss Adjustment Expenses

Nine Months Ended September 30, 2023:

The prior period reduction in estimates of net ultimate losses of $35 million was driven by net favorable development across multiple Run-off segment lines of business. We recognized $44 million of favorable development on our workers’ compensation line of business as a result of continued favorable claims experience, and $16 million of favorable development on our property line of business as a result of favorable claims experience.

The results were partially offset by $37 million of adverse development on our general casualty line of business, primarily due to a small number of large losses across several portfolios, particularly on excess business, and $18 million of adverse development on our all other line of business, driven by identified deterioration on abuse claims.

Nine Months Ended September 30, 2022:

The reduction in estimates of net ultimate losses of $209 million related to prior periods was driven by the Run-off segment, primarily due to $104 million of favorable development on our workers’ compensation line of business as a result of favorable claim settlements. We also had favorable development of $85 million on our professional indemnity/directors and officers line of business and favorable development of $38 million on our marine, aviation and transit lines of business as a result of lower claims activity. We also experienced favorable development on our construction defect line of business as a result of better than expected claims experience; however, this was partially offset by third quarter 2022 adverse development as a result of inflationary increases impacting our construction exposures.

Favorable claim activity on our catastrophe business within the Assumed Life segment further contributed to the favorable results.

The results were partially offset by adverse development in the Run-off segment general casualty and motor lines of business of $31 million and $20 million, respectively, as a result of worse than expected claims experience and adverse results development on claims.

Reduction in Provisions for ULAE

Three Months Ended September 30, 2023 and 2022:

The favorable reduction in provisions for ULAE for the three months ended September 30, 2023 and 2022 was driven by ULAE provision adjustments from our run-off operations, due to the corresponding reductions in loss reserves and the associated cost of managing such liabilities.

Nine Months Ended September 30, 2023 and 2022:

The favorable reduction in provisions for ULAE for the nine months ended September 30, 2023 and 2022 was driven by ULAE provision adjustments from our run-off operations, due to the corresponding reductions in loss reserves and the associated cost of managing such liabilities. The reduction in provisions for ULAE for the nine months ended September 30, 2023 was partially offset by an increase of $21 million as a result of assuming active claims control on a 2022 LPT agreement with Argo.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 87

Table of Contents

Item 1 | Notes to Consolidated Financial Statements | Note 8. Future Policyholder Benefits

Changes in Fair Value - Fair Value Option

Three Months Ended September 30, 2023 and 2022:

PPD for the three months ended September 30, 2023 was adversely impacted by changes in the fair value of liabilities for which we have elected the fair value option of $12 million, which was primarily driven by a decrease in U.K. corporate bond yields during the third quarter of 2023. The corporate bond yields, which form a component of the discount rate used to calculate the fair value of the liabilities, are matched to the original currencies of the underlying loss portfolios, of which GBP is the predominant currency for those portfolios that we have elected to measure at fair value using the fair value option.

PPD for the three months ended September 30, 2022 was favorably impacted by changes in the fair value of liabilities for which we have elected the fair value option of $82 million due to an increase in global corporate bond yields.

Nine Months Ended September 30, 2023 and 2022:

PPD was adversely impacted by changes in the fair value of liabilities for which we have elected the fair value option of $24 million for the nine months ended September 30, 2023, predominantly driven by a second quarter 2023 out-of-period adjustment to correct the portion of the change in fair value related to the Instrument-specific credit risk from net incurred losses and LAE to AOCI which had previously been recorded as a benefit to net incurred losses in 2022. For the comparative period, PPD was favorably impacted by changes in the fair value of liabilities for which we have elected the fair value option of $228 million due to an increase in global corporate bond yields.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 88

Table of Contents

Item 1 | Notes to Consolidated Financial Statements | Note 8. Future Policyholder Benefits

8. FUTURE POLICYHOLDER BENEFITS

The provision for future policyholder benefits includes provisions for life contingent liabilities assumed as well as other policy benefits for insureds. The future policyholder benefits are equal to the present value of the future benefits payments and related expenses less the present value of future net premiums.

We adopted ASU 2018-12 effective January 1, 2023 using the modified retrospective transition approach, with a transition date of September 1, 2021. This is the date that we acquired Enhanzed Re through a step acquisition and consolidated Enhanzed Re’s existing assets and liabilities, including all of our future policyholder benefit contracts. The effects of the adoption as of the transition date and through December 31, 2021 were not material, primarily due to the overall consistency of the interest rate assumption that was previously established based on investment yields (net of related investment expenses) expected as of September 1, 2021 compared to the upper-medium grade fixed-income instrument yield, as applied under ASU 2018-12, as of the same dates.

The assumed liabilities for future policyholder benefits are comprised primarily of in-payment annuity contract liabilities, which are classified as limited-payment contracts. The balances of and changes in liability for future policyholder benefits is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in millions of U.S. dollars)
Beginning Balance (1)	$	—	$	1,183	$	821	$	1,502



Interest accretion and other policyholder benefit expenses	—		7		—		25
Benefits paid	—		(12)		(6)		(42)
Recapture of assumed liabilities by ceding company	—		—		—		(34)
Terminations (surrenders)	—		(3)		—		(13)
Effect of exchange rate movement	—		(70)		13		(137)
Derecognition (2)	—		—		(828)		—
Effect of changes in discount rate	—		(134)		—		(314)
Other	—		—		—		(16)
Balance as of September 30	—		971		—		971

(1) The liability for future policyholder benefits as of January 1, 2023 and January 1, 2022 has been adjusted by $363 million and $0, respectively, for the impact of adopting ASU 2018-12 due to the effect of remeasuring the liabilities using an upper medium grade fixed-income instrument yield. The January 1, 2023 adjustment was reflected through an increase in other comprehensive income of $363 million due to changes in the discount rate during 2022, of which $90 million was attributable to NCI. There was no adjustment to the January 1, 2022 amount given the proximity of the acquisition of a controlling interest in Enhanzed Re on September 1, 2021, in which we recorded the liabilities at fair value in accordance with purchase accounting requirements. The corresponding balance as of September 30, 2021 would be the amount recorded as of December 31, 2021 given our one quarter reporting lag for Enhanzed Re. Furthermore, interest rate movements in this one month period were inconsequential.

(2) In November 2022, we completed a novation of the reinsurance of a closed block of life annuity policies, which was recorded in our first quarter 2023 results due to a one quarter reporting lag. See below for additional information.

For the three and nine months ended September 30, 2022, we recognized $2 million and $17 million of gross premiums, respectively. There were no gross premiums recognized for the three and nine months ended September 30, 2023.

As required by the adoption of ASU 2018-12, discount rate assumptions associated with liability remeasurement are updated at each reporting period to reflect the current upper-medium grade fixed-income instrument yield, with changes in the interest rate from inception to current period reported through accumulated other comprehensive loss.

We have designed a discount rate methodology to incorporate the currency and duration characteristics of the liabilities. For interest accretion, interest rates are fixed at inception. Significant assumptions to the calculation of future policyholder benefits also include mortality, mortality improvement, and timing of cash flow payments. The assumptions are reviewed at least annually. During 2022, we undertook a review of all significant assumptions and

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 89

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 9. Defendant Asbestos and Environmental Liabilities

did not make any changes to the mortality, mortality improvement, or timing of cash flow payments as actual experience was materially consistent with established assumptions for the same date. Accordingly, there was no effect of changes in the liability relating to changes in cash flow assumptions. In addition, the effects of actual variances from expected policyholder behavior experience were not material for the three and nine month periods ended September 30, 2023 and 2022.

The undiscounted expected future net benefit payments as of September 30, 2022 were $1.4 billion. The weighted-average duration of the liability, interest accretion rate and interest rate for discounting the liability for future policyholder benefits as of September 30, 2022 was 10.5 years, 0.7% and 3.2%, respectively.

Novation of Future Policyholder Benefits

In November 2022, Enhanzed Re completed a novation of the reinsurance of a closed block of life annuity policies to Monument Re Limited, a subsidiary of Monument Insurance Group Limited (“Monument Re”). We settled the life liabilities and the related assets at carrying value in return for cash consideration of $94 million as of the closing date and recorded other income of $275 million. This amount consists of a reclassification adjustment of the component of AOCI related to the unlocking of the discount rate assumption from the adoption of ASU 2018-12 into earnings. Our net earnings attributable to Enstar were reduced by the amount attributable to Allianz’s 24.9% noncontrolling interest in Enhanzed Re at the time of the transaction and our other income recorded was subject to deferral as profits emerge from the underlying novated business, which is generally over the expected settlement period of the life annuity policies, to account for our preexisting 20% ownership interest in Monument Re.

The following table illustrates the calculation of the gain as of the closing date of the novation:




	(in millions of U.S. dollars)
Calculation of carrying value as of transaction closing:
Funds held - directly managed and other assumed reinsurance recoverables	$	973
Future policyholder benefits	(828)
Other assumed reinsurance liabilities	(12)
Carrying value of net assets	$	133

Calculation of gain on novation (recorded in first quarter 2023):
Cash consideration received	$	94
Less: carrying value of net assets	(133)
Add: reclassification of remeasurement of future policyholder benefits from AOCI and NCI (1)	363
Amount deferred relating to 20% ownership interest in Monument Re (2)	(49)
Gain on novation (3)	275
Net earnings attributable to noncontrolling interest	(81)
Gain on novation attributable to Enstar (4)	$	194

(1) Comprised of $273 million from AOCI and $90 million from NCI.

(2) Calculated as 20% of the net Enstar transaction gain of $243 million (representing $324 million, consisting of the $39 million loss when comparing cash consideration to carrying value plus the $363 million reclassification benefit, less Allianz’s 24.9% share equal to $81 million).

(3) Recognized in other income in our condensed consolidated statements of earnings.

(4) Recognized in net earnings in our condensed consolidated statements of earnings.

During the three and nine months ended September 30, 2023, we amortized $1 million into other income relating to the portion of the gain that was deferred to account for our preexisting ownership interest in Monument Re. For the nine months ended the total gain on novation attributable to Enstar was $195 million. The deferred gain will be amortized over the expected settlement period of the transferred life annuity policies, which is projected to be 50 years, with the majority of benefit payments occurring in the earlier years.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 90

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 10. Fair Value Measurements

9. DEFENDANT ASBESTOS AND ENVIRONMENTAL LIABILITIES

The carrying value of the defendant asbestos and environmental liabilities (“defendant A&E liabilities”), insurance recoveries, future estimated expenses and the fair value adjustments related to DCo and Morse TEC was as follows:


	September 30, 2023		December 31, 2022
	(in millions of U.S. dollars)
Defendant A&E liabilities:
Defendant asbestos liabilities	$	741	$	786
Defendant environmental liabilities	10		10
Estimated future expenses	33		35
Fair value adjustments	(212)		(224)
Defendant A&E liabilities	572		607

Insurance balances recoverable:
Insurance recoverables related to defendant asbestos liabilities (net of allowance: 2023 and 2022 - $5)	218		224
Fair value adjustments	(45)		(47)
Insurance balances recoverable	173		177

Net liabilities relating to defendant A&E exposures	$	399	$	430

The table below provides a consolidated reconciliation of the beginning and ending liability for defendant A&E liabilities:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in millions of U.S. dollars)
Balance as of beginning of period	$	587	$	620	$	607	$	638

Insurance balances recoverable	(175)		(191)		(177)		(213)


Net balance as of beginning of period	412		429		430		425
Total net (paid claims) recoveries	(17)		(3)		(38)		1
Amounts recorded in other expense (income):
Reduction in estimates of ultimate net liabilities	—		—		(2)		(4)
Reduction in estimated future expenses	(1)		—		(2)		(1)
Amortization of fair value adjustments	5		1		11		6
Total other expense	4		1		7		1

Net balance as of September 30	399		427		399		427
Insurance balances recoverable	173		190		173		190
Balance as of September 30	$	572	$	617	$	572	$	617

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 91

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 10. Fair Value Measurements

10. FAIR VALUE MEASUREMENTS

Fair Value Hierarchy

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e. the "exit price") in an orderly transaction between market participants. We use a fair value hierarchy that gives the highest priority to quoted prices in active markets and the lowest priority to unobservable data. The hierarchy is broken down into three levels as follows:

•Level 1 - Valuations based on unadjusted quoted prices in active markets that we have the ability to access for identical assets or liabilities. Valuation adjustments and block discounts are not applied to Level 1 instruments.

•Level 2 - Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or significant inputs that are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.

•Level 3 - Valuations based on unobservable inputs where there is little or no market activity. Unadjusted third party pricing sources or management's assumptions and internal valuation models may be used to determine the fair values.

In addition, certain of our other investments are measured at fair value using net asset value ("NAV") per share (or its equivalent) as a practical expedient and have not been classified within the fair value hierarchy as defined above.

There have been no material changes in our valuation techniques during the period represented by these condensed consolidated financial statements.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 92

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 10. Fair Value Measurements

We have categorized our assets and liabilities that are recorded at fair value on a recurring and nonrecurring basis among levels based on the observability of inputs, or at fair value using NAV per share (or its equivalent) as follows:


	September 30, 2023
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Measured Using NAV as Practical Expedient		Total Fair Value
	(in millions of U.S. dollars)
Investments:
Short-term and fixed maturity investments:
U.S. government and agency	$	—	$	473	$	—	$	—	$	473
U.K. government	—		106		—		—		106
Other government	—		433		—		—		433
Corporate	—		5,382		—		—		5,382
Municipal	—		174		—		—		174
Residential mortgage-backed	—		596		—		—		596
Commercial mortgage-backed	—		1,078		—		—		1,078
Asset-backed	—		1,208		—		—		1,208


	$	—	$	9,450	$	—	$	—	$	9,450

Other assets included within funds held - directly managed	$	57	$	308	$	—	$	97	$	462
Equities:
Publicly traded equity investments	$	206	$	33	$	—	$	—	$	239
Exchange-traded funds	276		—		—		—		276
Privately held equity investments	—		—		323		43		366
	$	482	$	33	$	323	$	43	$	881
Other investments:

Hedge funds	$	—	$	—	$	—	$	515	$	515
Fixed income funds	—		69		—		435		504
Equity funds	—		4		—		—		4
Private equity funds	—		—		—		1,559		1,559
CLO equities	—		59		—		—		59
CLO equity funds	—		—		—		208		208
Private credit funds	—		122		—		426		548
Real estate debt fund	—		—		—		240		240


	$	—	$	254	$	—	$	3,383	$	3,637
Total Investments	$	539	$	10,045	$	323	$	3,523	$	14,430


Reinsurance balances recoverable on paid and unpaid losses:	$	—	$	—	$	214	$	—	$	214

Funds held by reinsured companies:	$	—	$	—	$	43	$	—	$	43

Other Assets:
Derivatives qualifying as hedging	$	—	$	10	$	—	$	—	$	10
Derivatives not qualifying as hedging	$	—	$	3	$	—	$	—	$	3
Derivative instruments	$	—	$	13	$	—	$	—	$	13

Losses and LAE:	$	—	$	—	$	1,108	$	—	$	1,108

Other Liabilities:

Derivatives not qualifying as hedging	—		4		—		—		4
Derivative instruments	$	—	$	4	$	—	$	—	$	4

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 93

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 10. Fair Value Measurements


	December 31, 2022
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Measured Using NAV as Practical Expedient		Total Fair Value
	(in millions of U.S. dollars)
Investments:
Short-term and fixed maturity investments:
U.S. government and agency	$	—	$	516	$	—	$	—	$	516
U.K government	—		82		—		—		82
Other government	—		462		—		—		462
Corporate	—		5,286		—		—		5,286
Municipal	—		211		—		—		211
Residential mortgage-backed	—		552		—		—		552
Commercial mortgage-backed	—		1,022		—		—		1,022
Asset-backed	—		914		—		—		914
Structured products	—		586		—		—		586

	—		9,631		—		—		9,631

Other assets included within funds held - directly managed	$	—	$	54	$	—	$	—	$	54
Equities:
Publicly traded equity investments	$	351	$	34	$	—	$	—	$	385
Exchange-traded funds	507		—		—		—		507
Privately held equity investments	—		—		319		39		358
	$	858	$	34	$	319	$	39	$	1,250
Other investments:
Hedge funds	$	—	$	—	$	—	$	549	$	549
Fixed income funds	—		90		—		457		547
Equity funds	—		3		—		—		3
Private equity funds	—		—		—		1,282		1,282
CLO equities	—		148		—		—		148
CLO equity funds	—		—		—		203		203
Private credit funds	—		—		—		362		362
Real estate debt fund	—		—		—		202		202

	$	—	$	241	$	—	$	3,055	$	3,296
Total Investments	$	858	$	9,960	$	319	$	3,094	$	14,231


Reinsurance balances recoverable on paid and unpaid losses:	$	—	$	—	$	275	$	—	$	275

Funds held by reinsured companies:	$	—	$	—	$	44	$	—	$	44

Other Assets:
Derivatives qualifying as hedging	$	—	$	1	$	—	$	—	$	1
Derivatives not qualifying as hedging	—		5		—		—		5
Derivative instruments	$	—	$	6	$	—	$	—	$	6

Losses and LAE:	$	—	$	—	$	1,286	$	—	$	1,286

Other Liabilities:
Derivatives qualifying as hedging	$	—	$	11	$	—	$	—	$	11
Derivatives not qualifying as hedging	—		1		—		—		1
Derivative instruments	$	—	$	12	$	—	$	—	$	12

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 94

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 10. Fair Value Measurements

Level 3 Measurements and Changes in Leveling

Transfers into or out of levels are recorded at their fair values as of the end of the reporting period, consistent with the date of determination of fair value.

Investments

The following table presents a reconciliation of the beginning and ending balances for all privately-held equities measured at fair value on a recurring basis using Level 3 inputs:


	Three Months Ended		Nine Months Ended
	September 30, 2023			September 30, 2022		September 30, 2023		September 30, 2022


	(in millions of U.S. dollars)
Beginning fair value	$	300		$	328	$	294	$	347

Sales and paydowns	—			—		—		(15)
Total unrealized (losses) gains (1)	(2)			(1)		4		(5)


Ending fair value	$	298		$	327	$	298	$	327

(1) Net unrealized (losses) gains included in our condensed consolidated statements of earnings is equal to the change in unrealized (losses) gains relating to assets held at the end of the reporting period.

Net unrealized (losses) gains related to Level 3 assets in the tables above are included in net unrealized (losses) gains in our condensed consolidated statements of earnings.

There were no transfers to and from Level 2 and Level 3 investments for the three and nine months ended September 30, 2023 and 2022.

Valuation Techniques and Inputs

The table below presents the quantitative information related to the fair value measurements for our privately held equity investments measured at fair value on a recurring and nonrecurring basis using Level 3 inputs:

Qualitative Information about Level 3 Fair Value Measurements

Valuation Techniques

Fair Value as of September 30, 2023

Unobservable Input

Range (Average) (1)

(in millions of U.S. dollars)

Recurring basis:

Guideline company methodology;
Option pricing model

185

P/BV multiple
P/BV (excluding AOCI) multiple
Price/LTM earnings multiple
Expected term

1.5x-1.7x

1.4x-1.5x

14.6x-14.9x

1-3 years

Dividend discount model;
Guideline companies method

Discount rate
P/BV multiple
Price/2023 earnings
Price/2024 earnings

15.0% - 17.0%

1.4x - 1.8x

6.5x - 10.9x

5.5x - 6.0x

Guideline companies method;
Earnings

LTM Enterprise Value/ EBITDA multiples
LTM EV/Revenue multiples
Multiple on earnings

12.5x - 14.0x

2.5x - 3.0x

5.0x

298

Non-recurring basis:

Cost as approximation of fair value

323

(1) The average represents the arithmetic average of the inputs and is not weighted by the relative fair value.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 95

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 10. Fair Value Measurements

Funds Held by Reinsured Companies - Embedded Derivative

As described in Note 4, we have an embedded derivative in relation to the Aspen LPT transaction to account for the fair value of the full crediting rate we expect to earn on the funds withheld received as consideration.

The following table presents a reconciliation of the beginning and ending balances for the embedded derivative measured at fair value on a recurring basis using Level 3 inputs:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(in millions of U.S. dollars)
Beginning fair value / Initial Recognition	$	42	$	27	$	44	$	27

Total net unrealized gains (losses)	1		—		(1)		—
Ending fair value	$	43	$	27	$	43	$	27

Net unrealized gains (losses) in the table above are included in net unrealized gains (losses) in our condensed consolidated statements of earnings.

Valuations Techniques and Inputs

The table below presents the quantitative information related to the fair value measurements for the embedded derivative on our funds held by reinsured companies measured at fair value on a recurring basis using Level 3 inputs:

Qualitative Information about Level 3 Fair Value Measurements

Valuation Techniques

Fair Value as of September 30, 2023

Unobservable Input

Average

(in millions of U.S. dollars)

Monte Carlo simulation model;
Discounted cash flow analysis

Volatility rate;
Expected Loss Payments

6.38%

$803 million

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 96

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 10. Fair Value Measurements

Insurance Contracts - Fair Value Option

The following table presents a reconciliation of the beginning and ending balances for all insurance contracts measured at fair value on a recurring basis using Level 3 inputs:


	Three Months Ended September 30,
	2023						2022
	Liability for losses and LAE		Reinsurance balances recoverable		Net		Liability for losses and LAE		Reinsurance balances recoverable		Net
	(in millions of U.S. dollars)
Beginning fair value	$	1,170	$	247	$	923	$	1,499	$	327	$	1,172

Incurred losses and LAE:
Increase (reduction) in estimates of ultimate losses	1		(27)		28		2		(5)		7
Reduction in provisions for ULAE	(3)		—		(3)		(4)		—		(4)
Changes in fair value due to changes in:
Average payout	10		6		4		10		3		7
Corporate bond yield	6		(2)		8		(107)		(18)		(89)
Credit spread for non-performance risk	(4)		(4)		—		—		—		—
Total change in fair value	12		—		12		(97)		(15)		(82)
Total incurred losses and LAE	10		(27)		37		(99)		(20)		(79)
Paid losses	(44)		(5)		(39)		(38)		(9)		(29)
Change in net liability for losses and LAE at fair value - Instrument-specific credit risk	—		—		—		—		—		—
Effect of exchange rate movements	(28)		(1)		(27)		(76)		(11)		(65)
Ending fair value	$	1,108	$	214	$	894	$	1,286	$	287	$	999


	Nine Months Ended September 30,
	2023						2022
	Liability for losses and LAE		Reinsurance balances recoverable		Net		Liability for losses and LAE		Reinsurance balances recoverable		Net
	(in millions of U.S. dollars)
Beginning fair value	$	1,286	$	275	$	1,011	$	1,989	$	432	$	1,557

Incurred losses and LAE:
Reduction in estimates of ultimate losses	7		(26)		33		(25)		(19)		(6)
Reduction in unallocated LAE	(9)		—		(9)		(14)		—		(14)
Change in fair value due to changes in :
Average payout	37		11		26		31		6		25
Corporate bond yield	(29)		(6)		(23)		(311)		(58)		(253)
Credit spread for non-performance risk	23		2		21		—		—		—
Total change in fair value	31		7		24		(280)		(52)		(228)
Total incurred losses and LAE	29		(19)		48		(319)		(71)		(248)
Paid losses	(187)		(39)		(148)		(201)		(49)		(152)
Change in net liability for losses and LAE at fair value - Instrument-specific credit risk	(27)		(6)		(21)		—		—		—
Effect of exchange rate movements	7		3		4		(183)		(25)		(158)
Ending fair value	$	1,108	$	214	$	894	$	1,286	$	287	$	999

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 97

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 11. Variable Interest Entities

Below is a summary of the quantitative information regarding the significant observable and unobservable inputs used in the internal model to determine fair value on a recurring basis:

Valuation Technique

September 30, 2023

December 31, 2022

Unobservable (U) and Observable (O) Inputs

Weighted Average

Internal model

Corporate bond yield (O)

A Rated

Internal model

Credit spread for Instrument-specific credit risk (U)

0.65%

Internal model

Risk cost of capital (U)

5.10%

Internal model

Weighted average cost of capital (U)

8.25%

Internal model

Average payout - liability (U)

8.06 years

7.89 years

Internal model

Average payout - reinsurance balances recoverable on paid and unpaid losses (U)

8.23 years

7.71 years

The fair value of the liability for losses and LAE and reinsurance balances recoverable on paid and unpaid losses may increase or decrease due to changes in the corporate bond rate, the credit spread for non-performance risk, the risk cost of capital, the weighted average cost of capital and the estimated payment pattern.

In addition, the estimate of the capital required to support the liabilities is based upon current industry standards for capital adequacy.

Changes in the fair value due to changes in average payout and corporate bond yields are included in net incurred losses and loss adjustment expenses in our condensed consolidated statements of earnings. Changes in the fair value due to changes in credit spread for Instrument-specific credit risk are classified to other comprehensive income.

Disclosure of Fair Values for Financial Instruments Carried at Cost

Senior and Subordinated Notes

The following table presents the fair values of our Senior and Subordinated Notes carried at amortized cost:


	September 30, 2023
	Amortized Cost		Fair Value
	(in millions of U.S. dollars)
4.95% Senior Notes due 2029	$	496	$	461
3.10% Senior Notes due 2031	495		376
Total Senior Notes	$	991	$	837
5.75% Junior Subordinated Notes due 2040	$	346	$	307
5.50% Junior Subordinated Notes due 2042	494		400

Total Subordinated Notes	$	840	$	707

The fair value of our Senior Notes and our Subordinated Notes was based on observable market pricing from a third party pricing service.

Both the Senior and Subordinated Notes are classified as Level 2.

Insurance Contracts

Disclosure of fair value of amounts relating to insurance contracts is not required, except those for which we elected the fair value option, as described above.

Remaining Financial Assets and Liabilities

Our remaining financial assets and liabilities were generally carried at cost or amortized cost, which due to their short-term nature approximates fair value as of September 30, 2023 and December 31, 2022.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 98

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 12. Debt Obligations

11. VARIABLE INTEREST ENTITIES

We have investments in certain limited partnership funds which are deemed to be variable interest entities ("VIEs"). The activities of these VIEs are generally limited to holding investments and our involvement in these entities is passive in nature. We consolidate all VIEs in which we are considered to be the primary beneficiary.

GCM Fund

In July 2022, we entered into an agreement to become a limited partner of GCM Blue Sails Infrastructure Offshore Opportunities Fund, L.P. (“GCM Fund”), with an initial commitment of $150 million. At that time, we performed an assessment and concluded that as a result of being a limited partner and having no substantive kick-out or participating rights, the GCM Fund is a VIE. We also concluded that we are the primary beneficiary, as our 99.5% economic interest in the GCM Fund is disproportionately greater than our lack of stated power to direct the activities of the GCM Fund that will most significantly impact the GCM Fund’s economic performance. As a result, we have consolidated the results of the GCM Fund. There was no gain or loss recognized on consolidation.

We have elected to recognize the results of the GCM Fund on a one quarter lag due to anticipated delays in obtaining timely financial information. As of September 30, 2023, $61 million of the initial commitment has been called. The carrying amounts of the assets and liabilities of the GCM Fund are presented within existing captions on our consolidated balance sheet as of September 30, 2023. Net investment income, changes in the fair value of assets and liabilities of the GCM Fund and management fees are presented within existing captions in the consolidated statements of earnings.

We recognized net unrealized gains on other investments of $3 million and $5 million for the three and nine months ended September 30, 2023, respectively.

Our exposure to risk of loss is limited to the amount of our investment, in accordance with the limited partnership agreement. We have not committed to provide any financial support to the general partner of the GCM Fund. In addition, we have not committed to provide any additional financial support to the GCM Fund in excess of previously funded capital commitments and all undistributed profits and income.

The assets of Enstar are not available to the creditors of the GCM Fund.

Nonconsolidated VIEs

The tables below present the fair value of our investments in nonconsolidated VIEs as well as our maximum exposure to loss associated with these VIEs:


	September 30, 2023						December 31, 2022
	Fair Value		Unfunded Commitments		Maximum Exposure to Loss		Fair Value		Unfunded Commitments		Maximum Exposure to Loss
	(in millions of U.S. dollars)
Equities
Publicly traded equity investment in common stock	$	54	$	—	$	54	$	52	$	—	$	52
Privately Held Equity	25		—		25		25		—		25
Total	$	79	$	—	$	79	$	77	$	—	$	77
Other investments
Hedge funds	$	515	$	—	$	515	$	549	$	—	$	549
Fixed income funds	151		36		187		277		33		310
Private equity funds	1,231		635		1,866		1,210		911		2,121
CLO equity funds	208		—		208		203		—		203
Private credit funds	271		265		536		79		149		228
Real estate funds	105		154		259		203		529		732

Total	$	2,481	$	1,090	$	3,571	$	2,521	$	1,622	$	4,143
Total investments in nonconsolidated VIEs	$	2,560	$	1,090	$	3,650	$	2,598	$	1,622	$	4,220

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 99

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 13. Noncontrolling Interests

12. DEBT OBLIGATIONS

Revolving Credit Facility

In May 2023, we and certain of our subsidiaries, as borrowers and guarantors, amended and restated our existing revolving credit agreement. The amendment increased the total commitments under the revolving credit facility from $600 million to $800 million and extended the expiry date to May 30, 2028. We may request additional commitments under the facility by up to an aggregate amount of $200 million, which the existing lenders, in their discretion, or new lenders, may provide. Under the amended facility, we may borrow revolving loans or request the issuance of syndicated or fronted letters of credit, in each case on a senior, unsecured basis.

Pricing under the facility will continue to be based on a per annum rate comprising a reference rate determined based on the type and currency of loan we borrow plus a margin that varies based on changes to our long term senior unsecured debt ratings assigned by S&P or Fitch (the “Debt Ratings”). The applicable reference rate is an adjusted forward-looking term rate based on the Secured Overnight Financing Rate (“Adjusted Term SOFR”) for loans denominated in U.S. dollars, a rate based on the Sterling Overnight Index Average for loans denominated in British pounds sterling, an adjusted rate based on the Euro Interbank Offered Rate for loans denominated in euros and a rate equal to the highest of the Prime Rate, an adjusted rate based on the Federal Funds Effective Rate and Adjusted Term SOFR (for a one-month period) for swingline loans. We pay letter of credit fees based on the average daily aggregate stated amount of outstanding letters of credit and the Debt Ratings. In addition, we pay commitment fees based on the average daily unused amount of the commitments and the Debt Ratings. If an event of default occurs, the interest rate will increase and the agent may, and at the request of the required lenders shall, terminate lender commitments and demand early repayment of any outstanding amounts borrowed (or cash collateralization of a percentage excess of the amount of outstanding letters of credit issued) under the facility.

Financial and business covenants imposed on us in relation to the amended facility include certain limitations on indebtedness and guarantees, liens, mergers, consolidations and other fundamental changes, and dispositions. Generally, the financial covenants require us to maintain a gearing ratio of consolidated financial indebtedness to total capitalization of not greater than 0.35 to 1.0 and to maintain a consolidated net worth of not less than the aggregate of (i) $4.3 billion, plus (ii) 50% of net income available for distribution to ordinary shareholders at any time after June 30, 2022 (excluding net unrealized gains or losses on investments), plus (iii) 50% of the proceeds of any issuance of ordinary shares made after June 30, 2022. In addition, we must maintain eligible capital in excess of the enhanced capital requirement imposed by the Bermuda Monetary Authority pursuant to the Insurance (Group Supervision) Rules 2011 of Bermuda. As of September 30, 2023, we are in compliance with the covenants of the EGL Revolving Credit Facility.

As of September 30, 2023, we had no borrowings outstanding and therefore had $800 million of available unutilized capacity under our unsecured revolving credit agreement.

Letters of Credit

In July 2023, we amended and restated our existing $800 million syndicated letter of credit facility agreement, pursuant to which we request the issuance of syndicated letters of credit that we use to collateralize certain reinsurance obligations. The initial commitment period under the agreement is one year, subject to our right to request up to four one-year extensions of the commitment period, for a maximum of five years. As of September 30, 2023, the aggregate amount issued under the facility was $653 million.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 100

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 14. Shareholders' Equity

13. NONCONTROLLING INTERESTS

Redeemable Noncontrolling Interests

The following is a reconciliation of the beginning and ending carrying amount of the equity attributable to the redeemable non-controlling interests (“RNCI”):


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in millions of U.S. dollars)
Balance at beginning of period	$	178	$	174	$	168	$	179


Net earnings (loss) attributable to RNCI	4		(5)		13		(5)
Change in unrealized (losses) gains on AFS investments attributable to RNCI	1		(3)		2		(8)




Balance as of September 30	$	183	$	166	$	183	$	166

Noncontrolling Interests

As of September 30, 2023 and December 31, 2022, we had $10 million and $186 million, respectively, of non-controlling interests (“NCI”) primarily related to external interests in two (December 31, 2022: three) of our subsidiaries.

On December 28, 2022, Enhanzed Re repurchased the entire 24.9% ownership interest Allianz held in Enhanzed Re for $175 million. We recorded the impact of reclassifying the carrying value of the NCI acquired to Enstar shareholders’ equity in our first quarter 2023 results, as we report the results of Enhanzed Re on a one quarter reporting lag.

A reconciliation of the beginning and ending carrying amount of the equity attributable to NCI is included in the condensed consolidated statements of changes in shareholder's equity.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 101

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 14. Shareholders' Equity

14. SHAREHOLDERS' EQUITY

Ordinary Shares

The following is a reconciliation of our beginning and ending ordinary shares:


	Voting Ordinary Shares	Non-Voting Convertible Ordinary Series C Shares	Non-Voting Convertible Ordinary Series E Shares	Total Ordinary Shares




Balance as of December 31, 2022	15,990,338	1,192,941	404,771	17,588,050
Shares issued (1)	40,865	—	—	40,865
Shares repurchased (2)	—	(1,192,941)	(404,771)	(1,597,712)
Balance as of September 30, 2023	16,031,203	—	—	16,031,203

(1) Ordinary Shares issued in relation to share-based compensation plan awards and the Employee Share Purchase Plan.

(2) Ordinary Shares that we have repurchased are subject to immediate retirement, resulting in a reduction to the number of Ordinary Shares issued and outstanding.

Voting Ordinary Shares

Share Repurchases

There were no voting ordinary shares repurchased during the three and nine months ended September 30, 2023.

The following table presents our ordinary shares repurchased under our share repurchase programs for the nine months ended September 30, 2022 (there were no shares repurchased for the three months ended September 30, 2022):


	Nine Months Ended September 30, 2022
		Ordinary shares repurchased	Average price per ordinary share		Aggregate price
		(in millions of U.S. dollars, except for share and per share data)
2021 Repurchase Program (1)		227,383	$	257.03	$	58
2022 Repurchase Program (2)		470,197	$	222.74	$	105
Total share repurchases under repurchase programs		697,580	$	233.92	$	163

(1) Our Board approved an ordinary share repurchase program in November 2021 (as subsequently amended, the “2021 Repurchase Program”), not to exceed $100 million in aggregate. The 2021 Repurchase Program was fully utilized as of April 2022.

(2) In May 2022, our Board authorized the repurchase of up to $200 million of our ordinary shares (the “2022 Repurchase Program”), originally effective through May 5, 2023, of which $95 million had been utilized as of December 31, 2022. In February 2023, our Board authorized the repurchase of an additional $105 million of our ordinary shares under the 2022 Repurchase Program and extended the effective date through February 23, 2024. In March 23, 2023, the 2022 Repurchase Program was terminated following the repurchase of our non-voting convertible ordinary shares as described below.

Non-voting Ordinary Shares

Strategic Share Repurchases

In March 2023, we repurchased 1,597,712 of our non-voting convertible ordinary shares held by Canada Pension Plan Investment Board (“CPP Investments”) for an aggregate $341 million, representing a price per share of $213.13 and a 5% discount to the trailing 10-day volume weighted average price of our voting ordinary shares as at the agreed March 2023 measurement date. The shares comprise all of our outstanding Series C and Series E non-voting ordinary shares.

Dividends on Preferred Shares

During the three months ended September 30, 2023 and 2022, we declared and paid dividends on Series D Preferred Shares of $7 million and on Series E Preferred Shares of $2 million for both periods.

During the nine months ended September 30, 2023 and 2022, we declared and paid dividends on Series D Preferred Shares of $21 million and on Series E Preferred Shares of $6 million for both periods.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 102

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 14. Shareholders' Equity

Accumulated Other Comprehensive Income (Loss)

The following table presents details about the tax effects allocated to each component of other comprehensive income (loss):


	Three Months Ended
	September 30,
	2023						2022
	Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
	(in millions of U.S. dollars)
Unrealized losses on fixed maturities, AFS arising during the period	$	(97)	$	3	$	(94)	$	(208)	$	4	$	(204)
Reclassification adjustment for change in allowance for credit losses recognized in net earnings	(1)		—		(1)		(3)		—		(3)
Reclassification adjustment for net realized losses included in net earnings	13		—		13		27		—		27



Decrease in defined benefit pension liability	—		—		—		(2)		—		(2)
Remeasurement of future policyholder benefits - change in interest rate	—		—		—		134		—		134


Other comprehensive loss	$	(85)	$	3	$	(82)	$	(52)	$	4	$	(48)


	Nine Months Ended
	September 30,
	2023						2022
	Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount		Before Tax Amount		Tax (Expense) Benefit		Net of Tax Amount
	(in millions of U.S. dollars)
Unrealized losses on fixed maturities, AFS arising during the year	$	(74)	$	3	$	(71)	$	(763)	$	9	$	(754)
Reclassification adjustment for change in allowance for credit losses recognized in net earnings	(5)		—		(5)		29		—		29
Reclassification adjustment for net realized losses included in net earnings	60		—		60		58		—		58

Change in currency translation adjustment	2		—		2		2		—		2

Decrease in defined benefit pension liability	—		—		—		(2)		—		(2)
Remeasurement of future policyholder benefits - change in interest rate	—		—		—		314		—		314
Reclassification adjustment for remeasurement of future policyholder benefits included in net earnings	(363)		—		(363)		—		—		—
Change in net liability for losses and LAE at fair value - Enstar-specific credit risk	21		—		21		—		—		—
Other comprehensive loss	$	(359)	$	3	$	(356)	$	(362)	$	9	$	(353)

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 103

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 15. Earnings Per Share

The following tables present details of amounts reclassified from accumulated other comprehensive loss for the three and nine months ended September 30, 2023 and 2022:


	Three Months Ended
Details about AOCI components	September 30, 2023		September 30, 2022		Affected Line Item in Statement where Net Earnings are presented
	(in millions of U.S. dollars)
Unrealized losses on fixed maturities, AFS	$	(12)	$	(24)	Net realized losses





Total reclassifications for the period, net of tax	$	(12)	$	(24)

	Nine Months Ended
Details about AOCI components	September 30, 2023		September 30, 2022		Affected Line Item in Statement where Net Earnings are presented
	(in millions of U.S. dollars)
Unrealized losses on fixed maturities, AFS	$	(55)	$	(87)	Net realized losses




Remeasurement of future policyholder benefits	363		—		Other income
Total reclassifications for the period, net of tax	$	308	$	(87)

Changes in Ownership of Consolidated Subsidiaries

The following table summarizes changes in the ownership interest in consolidated subsidiaries during the periods presented:


	Nine months ended
	September 30, 2023		September 30, 2022
	(in millions of U.S. dollars)
Net earnings (loss) attributable to Enstar ordinary shareholders	$	483	$	(1,133)
Transfers from noncontrolling interests:
Increase in Enstar’s additional paid-in capital for purchase of noncontrolling interest (1)	9		—
Change from net earnings (loss) attributable to Enstar ordinary shareholders and net transfers from Noncontrolling interests	$	492	$	(1,133)

(1) The transfer from the noncontrolling interests for the nine months ended September 30, 2023 relates to the repurchase of the entire 24.9% ownership interest Allianz held in Enhanzed Re recorded in the first quarter 2023.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 104

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 16. Related Party Transactions

15. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted net earnings per ordinary share:


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2023		2022		2023		2022
	(in millions of U.S. dollars, except share and per share data)
Numerator:



Net earnings (loss) attributable to Enstar ordinary shareholders:	$	38	$	(432)	$	483	$	(1,133)

Denominator:
Weighted-average ordinary shares outstanding — basic (1)	15,464,824		17,013,348		15,962,910		17,269,870
Effect of dilutive securities:
Share-based compensation plans (2)	141,281		113,532		108,015		112,708


Weighted-average ordinary shares outstanding — diluted (3)	15,606,105		17,126,880		16,070,925		17,382,578

Earnings (loss) per share attributable to Enstar ordinary shareholders:
Basic	$	2.46	$	(25.39)	$	30.26	$	(65.61)



Diluted (3)	$	2.43	$	(25.39)	$	30.05	$	(65.61)

(1) Weighted-average ordinary shares for basic (loss) earnings per share includes ordinary shares (voting and non-voting), but excludes ordinary shares held in the Enstar Group Limited Employee Benefit Trust (the "EB Trust") in respect of Joint Share Ownership Plan ("JSOP") awards.

(2) Share-based dilutive securities include restricted shares, restricted share units, and performance share units. Certain share-based compensation awards were excluded from the calculation for the three and nine months ended September 30, 2023 and 2022 because they were anti-dilutive. The ordinary shares held in the EB Trust in respect of JSOP awards were also excluded because they are treated as held in treasury.

(3) During a period of loss, the basic weighted-average ordinary shares outstanding is used in the denominator of the diluted loss per ordinary share computation as the effect of including potentially dilutive securities would be anti-dilutive.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 105

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 16. Related Party Transactions

16. RELATED PARTY TRANSACTIONS

The following tables summarize our related party balances and transactions. Additional details about the nature of our relationships and transactions are disclosed in Note 23 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022.


As of September 30, 2023	Stone Point (1) (2)		Northshore		Monument		AmTrust		Citco		Core Specialty		Other (3)
	(in millions of U.S. dollars)
Assets

Fixed maturities, trading, at fair value	$	66	$	—	$	—	$	—	$	—	$	—	$	—
Fixed maturities, AFS, at fair value	342		—		—		—		—		—		—
Equities, at fair value	127		44		—		185		—		—		—
Other investments, at fair value	467		—		—		—		—		—		1,646
Equity method investments	—		—		102		—		63		229		15
Total investments	1,002		44		102		185		63		229		1,661
Cash and cash equivalents	13		—		—		—		—		—		—



Funds held by reinsured company	—		9		—		—		—		18		—
Other assets	—		—		—		—		—		5		—
Liabilities
Losses and LAE	—		9		—		—		—		222		—

Insurance and reinsurance balances payable	—		—		—		—		—		(14)		—

Net assets (liabilities)	$	1,015	$	44	$	102	$	185	$	63	$	44	$	1,661
Redeemable noncontrolling interests	$	175	$	—	$	—	$	—	$	—	$	—	$	—

(1) As of September 30, 2023, investment funds managed by Stone Point Capital LLC ("Stone Point") own 1,546,196 of our Voting Ordinary Shares, which constitutes 9.6% of our outstanding Voting Ordinary Shares.

(2) As of September 30, 2023, we had unfunded commitments of $153 million to other investments, and $12 million to privately held equity managed by Stone Point and its affiliated entities.

(3) Other related party investments include investments in limited partnerships and partnership-like limited liabilities companies, for which had we not elected the fair value option, would be accounted for as equity method investments. We have disclosed our investments in these entities on an aggregated basis as they are individually immaterial.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 106

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 16. Related Party Transactions


As of December 31, 2022	Stone Point		Northshore		Monument		AmTrust		Citco		Core Specialty		Other
	(in millions of U.S. dollars)
Assets

Short-term investments, AFS, at fair value	$	1	$	11	$	—	$	—	$	—	$	—	$	—
Fixed maturities, trading, at fair value	85		148		—		—		—		—		—
Fixed maturities, AFS, at fair value	447		—		—		—		—		—		—
Equities, at fair value	148		37		—		190		—		—		—
Other investments, at fair value	467		14		—		—		—		—		1,918
Equity method investments	—		—		110		—		60		211		16
Total investments	1,148		210		110		190		60		211		1,934
Cash and cash equivalents	37		20		—		—		—		—		—
Restricted cash and cash equivalents	—		2		—		—		—		—		—

Reinsurance balances recoverable on paid and unpaid losses	—		36		—		—		—		2		—
Funds held by reinsured company	—		31		—		—		—		25		—
Other assets	—		21		—		—		—		5		—
Liabilities
Losses and LAE	—		183		—		—		—		334		—
Insurance and reinsurance balances payable	—		22		—		—		—		11		—
Other liabilities	—		76		—		—		—		—		—
Net assets (liabilities)	$	1,185	$	39	$	110	$	190	$	60	$	(102)	$	1,934
Redeemable noncontrolling interests	$	161	$	—	$	—	$	—	$	—	$	—	$	—


	Three Months Ended
	September 30, 2023
	Stone Point		Northshore		Monument		AmTrust		Citco		Core Specialty		Other
	(in millions of U.S. dollars)
INCOME
Net premiums earned	$	—	$	—	$	—	$	—	$	—	$	(2)	$	—

Net investment income	3		—		—		2		—		—		—

Net unrealized gains (losses)	26		—		—		(2)		—		—		11

Total income (loss)	29		—		—		—		—		(2)		11

EXPENSES
Net incurred losses and LAE	—		—		—		—		—		(9)		—




Total expenses	—		—		—		—		—		(9)		—

(Loss) earnings from equity method investments	—		—		(4)		—		1		—		—
Total net (loss) earnings	$	29	$	—	$	(4)	$	—	$	1	$	7	$	11

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 107

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 16. Related Party Transactions


	Three Months Ended
	September 30, 2022
	Stone Point		Northshore		Monument		AmTrust		Citco		Core Specialty		Other
	(in millions of U.S. dollars)
INCOME
Net premiums earned	$	—	$	1	$	—	$	—	$	—	$	—	$	—

Net investment income	4		2		—		2		—		—		—

Net unrealized losses	(17)		(4)		—		(2)		—		—		(33)
Other income	—		2		—		—		—		2		—
Total (loss) income	(13)		1		—		—		—		2		(33)

EXPENSES
Net incurred losses and LAE	—		3		—		—		—		(1)		—
Acquisition costs	—		(2)		—		—		—		—		—



Total expenses	—		1		—		—		—		(1)		—

Loss from equity method investments	—		—		(16)		—		—		(4)		—
Total net loss	$	(13)	$	—	$	(16)	$	—	$	—	$	(1)	$	(33)


	Nine Months Ended
	September 30, 2023
	Stone Point		Northshore		Monument		AmTrust		Citco		Core Specialty		Other
	(in millions of U.S. dollars)
INCOME
Net premiums earned	$	—	$	—	$	—	$	—	$	—	$	(4)	$	—

Net investment income	9		—		—		5		—		—		5
Net realized gains	1		—		—		—		—		—		—
Net unrealized gains (losses)	28		(6)		—		(5)		—		—		86

Total income (loss)	38		(6)		—		—		—		(4)		91

EXPENSES
Net incurred losses and LAE	—		—		—		—		—		(20)		—



Total expenses	—		—		—		—		—		(20)		—

Earnings from equity method investments	—		—		—		—		4		18		—
Total net earnings (loss)	$	38	$	(6)	$	—	$	—	$	4	$	34	$	91

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 108

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 17. Commitments and Contingencies


	Nine Months Ended
	September 30, 2022
	Stone Point		Northshore		Monument		AmTrust		Citco		Core Specialty		Other
	(in millions of U.S. dollars)
INCOME
Net premiums earned	$	—	$	8	$	—	$	—	$	—	$	—	$	—

Net investment income	11		8		—		5		—		—		—

Net unrealized losses	(73)		(12)		—		(5)		—		—		(72)
Other income	—		4		—		—		—		7		—
Total (loss) income	(62)		8		—		—		—		7		(72)

EXPENSES
Net incurred losses and LAE	—		8		—		—		—		(9)		—




Total expenses	—		8		—		—		—		(9)		—

Earnings (loss) from equity method investments	—		—		15		—		2		(5)		—
Total net (loss) earnings	$	(62)	$	—	$	15	$	—	$	2	$	11	$	(72)

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 109

Table of Contents

Item 1 | Notes to the Unaudited Condensed Consolidated Financial Statements | Note 18. Subsequent Events

17. COMMITMENTS AND CONTINGENCIES

Concentration of Credit Risk

We are subject to credit risk principally in relation to our:

i.investments, including equity method investments;

ii.cash and cash equivalents and restricted cash and cash equivalents;

iii.assets pledged to ceding companies under reinsurance contracts;

iv.(re)insurance balances recoverable on paid and unpaid losses; and

v.funds held by reinsured companies and funds held - directly managed (together funds held).

As of September 30, 2023, we had funds held concentrations to reinsured companies exceeding 10% of shareholders’ equity of $5.1 billion (December 31, 2022: $5.0 billion) in aggregate. However, we generally have the contractual ability to offset any shortfall in the payment of the funds held balances with amounts owed by us.

We limit the amount of credit exposure to any one counterparty, and none of our counterparty credit exposures, excluding U.S. government instruments and the counterparties noted above, exceeded 10% of shareholders’ equity as of September 30, 2023. Our credit exposure to the U.S. government was $901 million as of September 30, 2023 (December 31, 2022: $945 million).

Legal Proceedings

We are, from time to time, involved in various legal proceedings in the ordinary course of business, including litigation and arbitration regarding claims. Estimated losses relating to claims arising in the ordinary course of business, including the anticipated outcome of any pending arbitration or litigation, are included in the liability for losses and LAE in our condensed consolidated balance sheets. In addition to claims litigation, we may be subject to other lawsuits and regulatory actions in the normal course of business, which may involve, among other things, allegations of underwriting errors or omissions, employment claims or regulatory activity. We do not believe that the resolution of any currently pending legal proceedings, either individually or taken as a whole, will have a material effect on our business, results of operations or financial condition. We anticipate that, similar to the rest of the (re)insurance industry, we will continue to be subject to litigation and arbitration proceedings in the ordinary course of business, including litigation generally related to the scope of coverage with respect to A&E and other claims.

Unfunded Investment Commitments

As of September 30, 2023, we had unfunded commitments of $1.7 billion to other investments, $120 million to fixed maturities, and $17 million to privately held equity.

Guarantees

As of September 30, 2023, parental guarantees supporting reinsurance obligations, defendant A&E liabilities, subsidiary capital support arrangements and credit facilities were $2.3 billion. We also guarantee the 2040 and 2042 Junior Subordinated Notes, which have an aggregate principal amount of $850 million as of September 30, 2023.

Redeemable Noncontrolling Interests

Since March 31, 2023, pursuant to contractual terms, we have the right to purchase the RNCI interests from the RNCI holders (each such right, a "call right") and since December 31, 2022, the RNCI holders have the right to sell their RNCI interests to us (each such right, a "put right"). Following the closing of the Exchange Transaction described in Note 3, we have maintained a call right over the portion of StarStone Specialty Holdings Limited owned by the Trident V Funds and Dowling Capital Partners I, L.P. and Capital City Partners LLC, and they will maintain put rights to transfer those interests to us.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 110

Table of Contents

Item 4. Controls and Procedures

18. SUBSEQUENT EVENTS

Transactions

Capital Transactions

On November 1, 2023, our Board of Directors approved two separate share repurchase transactions. Pursuant to that approval, on November 6, 2023, we agreed to repurchase 791,735 of our voting ordinary shares held by Canada Pension Plan Investment Board (“CPP Investments”) and its affiliate, and 50,000 of our voting ordinary shares held by the Trident V funds managed by Stone Point Capital LLC (“the Trident V Funds”), for a total of $191 million in aggregate.

In addition, on November 6, 2023, our Chief Executive Officer, Dominic Silvester, agreed to acquire 45,000 of our voting ordinary shares held by the Trident V Funds, for a total of $10 million.

The above transactions were executed at a price per share of $227.18, representing a 5% discount to the trailing 10-day volume weighted average price of our voting ordinary shares as of the close of business on November 3, 2023. The transactions are scheduled to close on November 14, 2023.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 111

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Part II - Other Information

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of management, including our Chief Executive Officer and our Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of September 30, 2023. Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that we maintained effective disclosure controls and procedures to provide reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and timely reported as specified in the rules and forms of the U.S. Securities and Exchange Commission and is accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls Over Financial Reporting

There were no changes in our internal controls over financial reporting that occurred during the three months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 112

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Part II - Other Information

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

For a discussion of legal proceedings, see Note 17 to our condensed consolidated financial statements, which is incorporated herein by reference.

ITEM 1A. RISK FACTORS

Our results of operations and financial condition are subject to numerous risks and uncertainties described in “Risk Factors” included in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022. The risk factors identified therein have not materially changed.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Issuer Purchases of Equity Securities

The following table provides information about ordinary shares acquired by the Company during the three months ended September 30, 2023.

Period

Total Number of Shares Purchased

Average Price Paid per Share

Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)

Maximum Number (or Dollar Value) of Shares that May Yet be Purchased Under the Program (1)

(in millions of U.S. dollars)

Dollar amount available to be repurchased

—

July 1, 2023 - July 31, 2023

—

August 1, 2023 - August 31, 2023

—

September 1, 2023 - September 30, 2023

—

(1) In May 2022, our Board authorized the repurchase of up to $200 million of our ordinary shares (as subsequently amended, the “2022 Repurchase Program”), effective through May 5, 2023, of which $95 million had been utilized as of December 31, 2022. In February 2023, our Board authorized the repurchase of up to an additional $105 million of our ordinary shares under the 2022 Repurchase Program and extended the effective date through February 23, 2024. In March 2023, we repurchased 1,597,712 of our non-voting convertible ordinary shares held by Canada Pension Plan Investment Board (“CPP Investments”) for an aggregate $341 million, representing a price per share of $213.13. Subsequent to the repurchase of our non-voting convertible ordinary shares, the 2022 Repurchase Program was terminated.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the three months ended September 30, 2023, no director or officer of the Company adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 113

Table of Contents

ITEM 6. EXHIBITS

EXHIBIT INDEX


Exhibit No.						Description
3.1						Memorandum of Association of Enstar Group Limited (incorporated by reference to Exhibit 3.1 of the Company’s Form 10-K/A filed on May 2, 2011).
3.2						Sixth Amended and Restated Bye-Laws of Enstar Group Limited (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on June 15, 2021).
3.3						Certificate of Designations of Series C Participating Non-Voting Perpetual Preferred Stock (incorporated by reference to Exhibit 3.1 of the Company’s Form 8-K filed on June 17, 2016).
3.4						Certificate of Designations of 7.00% fixed-to-floating rate perpetual non-cumulative preference shares, Series D (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on June 27, 2018).
3.5						Certificate of Designations of 7.00% perpetual non-cumulative preference shares, Series E (incorporated by reference to Exhibit 4.1 of the Company’s Form 8-K filed on November 21, 2018).
10.1						Amended and Restated Letter of Credit Facility Agreement, dated as of July 28, 2023, by and among Enstar Group Limited and certain of its subsidiaries, National Australia Bank Limited, The Bank of Nova Scotia and each of the lenders party thereto (incorporated by reference to Exhibit 10.1 to the Company’s Form 8-K filed on August 2, 2023).
31.1*						Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted under Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*						Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934 as adopted under Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**						Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**						Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS						XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH						XBRL Taxonomy Extension Schema
101.CAL						XBRL Taxonomy Extension Calculation Linkbase
101.LAB						XBRL Taxonomy Extension Label Linkbase
101.DEF						XBRL Taxonomy Extension Definition Linkbase
101.PRE						XBRL Taxonomy Extension Presentation Linkbase
104						Cover page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)

_______________________________

* filed herewith

** furnished herewith

Enstar Group Limited | Third Quarter 2023 | Form 10-Q 114

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on November 7, 2023.


			ENSTAR GROUP LIMITED

By:			/s/ Matthew Kirk
			Matthew Kirk Chief Financial Officer, Authorized Signatory and Principal Financial Officer

By:			/s/ Girish Ramanathan
			Girish Ramanathan Chief Accounting Officer and Principal Accounting Officer