Two Bermudian-headquartered companies have entered into a $2.3 billion loss portfolio transfer reinsurance agreement, which one party said was the largest such agreement announced in the insurance and reinsurance industry this year.

Axis Capital Holdings Ltd and Enstar Group Ltd said the LPT reinsurance agreement covered a portfolio of reinsurance segment business.

Under the LPT reinsurance agreement, which is structured as a 75 per cent ground-up quota share, Axis will retrocede to Enstar $2.3 billion of reinsurance segment reserves.

The parties said this transaction was predominantly attributable to casualty portfolios related to 2021 and prior underwriting years totalling $3.1 billion at September 30.

Axis expects to recognise an approximate $60 million benefit from the excess of reserves ceded over the consideration over the next several years, according to the payment patterns of these reserves.

Axis will maintain claims control for the covered reserves subject to certain administrative rights of Enstar.

The LPT reinsurance agreement will be provided by Enstar’s wholly owned subsidiary and S&P “A” financial strength rated reinsurance platform, Cavello Bay Reinsurance Ltd.

“This transaction aligns our balance sheet with our previously stated underwriting strategy of leaning into our specialty insurance business,” said Vince Tizzio, president and chief executive of Axis.

“Furthermore, we continue to be focused on advancing the strategic priorities laid out at our Investor Day in May of driving organic growth, reinvesting in the business and managing our capital for the benefit of shareholders.

“We are pleased to be partnering with Enstar in advancing our strategic priorities.”

Dominic Silvester, Enstar’s chief executive, said: “This transaction showcases Enstar’s market-leading position and, being the largest loss portfolio transfer announced in the industry so far this year, it is another example of our ability to deliver significant reinsurance solutions to our global clients.

“We look forward to building a lasting partnership with Axis, a leading provider of specialty lines insurance and reinsurance.”

The closing of the transaction is subject to regulatory approvals and other customary conditions and is expected to occur during the first half of 2025.