Bermuda-based Enstar Group Limited announced that one of its wholly-owned subsidiaries has agreed to provide AIG with protection against adverse development on the portion of Validus Re’s loss reserves.

The deal relates to the portion of Validus Re reserves, for which AIG will retain exposure after closing of AIG’s sale of Validus Re to RenaissanceRe.

Per the agreement, Enstar will provide $400 million of adverse development cover in excess of carried loss reserves on assumed reinsurance contracts underwritten by Validus Re.

The adverse development cover is expected to become effective at the time of closing of AIG’s sale of Validus Re to RenaissanceRe.

In a media statement, Dominic Silvester, Enstar’s Chief Executive Officer, said: “Our agreement today with AIG is a further testament to our expertise in executing bespoke solutions that help deliver our partner’s strategic objectives. This transaction demonstrates the continued versatility of legacy risk solutions as a source of value creation, and our continued commitment toward sourcing and executing top-quality transactions.”

Enstar is global reinsurance group that offers capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe and Australia. Since formation, Enstar has acquired over 115 companies and portfolios.

Source: Enstar Group Limited