Chicago, IL – CNA Financial Corporation (NYSE: CNA) recently announced that its principal operating subsidiary, Continental Casualty Company, has entered into an agreement with Cavello Bay Reinsurance Limited, a subsidiary of Enstar Group Limited, under which Cavello will reinsure a legacy portfolio of excess workers’ compensation policies.
Under the terms of the transaction, which will be deemed effective as of January 1, 2020, CNA will cede to Cavello approximately $690 million of net excess workers’ compensation liabilities relating to business written in 2007 and prior under a retroactive reinsurance agreement with an aggregate limit of $1 billion.
The transaction is expected to close in the first quarter of 2021, subject to regulatory approval and other closing conditions, at which time CNA expects to recognize an after-tax loss of approximately $12 million.
Dino Robusto, Chairman and CEO of CNA, commented, “The transfer of legacy reserves supports CNA’s continued commitment to advancing our core business. We are pleased to be working with an excellent partner in Enstar in pursuit of our goals.”
Dominic Silvester, Enstar’s Chief Executive Officer said: “Our agreement today to partner with CNA, an industry leader, expands our portfolio of U.S. excess workers’ compensation legacy reserves, a line of business we have considerable experience and success in managing.”