Bermuda’s Enstar Group has agreed to provide protection for American International Group against possible adverse developments related to Validus Re’s loss reserves to which it is still exposed.

Earlier this year, RenaissanceRe agreed to purchase Validus from AIG for about $3 billion.

Under the terms of the Enstar deal, Enstar will “provide $400 million of adverse development cover in excess of carried loss reserves on assumed reinsurance contracts underwritten by Validus Re.”

The cover will likely be effective when the Validus-RenaisaanceRe deal is concluded, the company said in a 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 towards sourcing and executing top-quality transactions.”

Nasdaq-listed Enstar has acquired more than 115 companies and portfolios since its formation in the early 1990s. It had $21.9 billion in assets as of June 30 and $4.9 billion of shareholders equity.

The company took a big hit in 2022 on investment losses, reporting a net loss of $906 million that year, though it did return to profit in the fourth quarter and maintained profitability in the first quarter and into the second quarter this year.