Realising Value Enstar Group Limited Investor Financial Supplement September 30, 2020 ENSTARGROUP.COM
Table of Contents Page Explanatory Notes 3 Financial Highlights 5 Book Value Per Share 6 Book Value and Share Price Performance 7 Summary Balance Sheets 8 Summary Earnings Statements 9 Earnings Per Share 10 Non-GAAP Operating Income 11 Non-life Run-off Reserve / Claims Savings 12 Investment Composition - GAAP 13 Investment Performance - GAAP 14 Investment Composition - Non-GAAP 15 Investment Composition - Non-GAAP Reconciliation 16 Capital Position & Credit Ratings 17 Results by Segment 18 | enstargroup.com 2
Explanatory Notes About Enstar Enstar is a NASDAQ-listed leading global insurance group that offers innovative capital release solutions through its network of group companies in Bermuda, the United States, the United Kingdom, Continental Europe, Australia, and other international locations. A market leader in completing legacy acquisitions, Enstar has acquired over 100 companies and portfolios since its formation in 2001. For further information about Enstar, see www.enstargroup.com. Basis of Presentation In this Investor Financial Supplement, the terms "we," "us," "our," "Enstar," or "the Company" refer to Enstar Group Limited and its consolidated subsidiaries. All information contained herein is unaudited. Unless otherwise noted, amounts are in thousands of U.S. Dollars, except for share and per share amounts and ratio information. Certain prior period comparatives have been reclassified to conform to the current presentation. This investor financial supplement is being provided for informational purposes only. It should be read in conjunction with documents filed by Enstar with the U.S. Securities and Exchange Commission, including its Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q. Non-GAAP Operating Income (Loss) Attributable to Enstar Ordinary Shareholders In addition to presenting net earnings (loss) attributable to Enstar ordinary shareholders and diluted earnings (loss) per ordinary share determined in accordance with U.S. GAAP, we believe that presenting non-GAAP operating income (loss) attributable to Enstar ordinary shareholders and diluted non-GAAP operating income (loss) per ordinary share, both of which are non- GAAP financial measures as defined in SEC Regulation G, provides investors with valuable measures of our performance. Non-GAAP operating income (loss) is net earnings attributable to Enstar ordinary shareholders excluding: (i) net realized and unrealized (gains) losses on fixed maturity investments and funds held - directly managed included in net earnings (loss), (ii) change in fair value of insurance contracts for which we have elected the fair value option, (iii) gain (loss) on sale of subsidiaries, if any, (vi) net earnings (loss) from discontinued operations, if any, (v) tax effect of these adjustments where applicable, and (vi) attribution of share of adjustments to noncontrolling interest where applicable. We eliminate the impact of net realized and unrealized (gains) losses on fixed maturity investments and funds held - directly managed and change in fair value of insurance contracts for which we have elected the fair value option because these items are subject to significant fluctuations in fair value from period to period, driven primarily by market conditions and general economic conditions, and therefore their impact on our earnings is not reflective of the performance of our core operations. When applicable, we eliminate the impact of gain (loss) on sale of subsidiaries and net earnings (loss) from discontinued operations because these are also not reflective of the performance of our core operations. Diluted Non-GAAP operating income (loss) per ordinary share is diluted net earnings per ordinary share excluding the per diluted share amounts of each of the adjustments used to calculate non- GAAP operating income (loss). We believe these non-GAAP measures enable readers of our consolidated financial statements to analyze our results in a way that is more aligned with the manner in which our management measures our underlying performance. We believe that presenting these non-GAAP financial measures, which may be defined and calculated differently by other companies, improves the understanding of our consolidated results of operations. These measures should not be viewed as substitutes for those calculated in accordance with U.S. GAAP. Reserve / Claims Savings - Non-GAAP Reserve / Claims Savings is a non-GAAP measure calculated using components of amounts determined in accordance with U.S. GAAP and disclosed in our quarterly U.S. GAAP consolidated financial statements. Reserve / Claims Savings is calculated by adding (i) the reduction (increase) in estimates of net ultimate losses relating to prior periods, included in net incurred losses and LAE, and (ii) the reduction (increase) in estimates of ultimate net defendant asbestos and environmental (“Defendant A&E”) liabilities relating to prior periods, included in other income (expense). Because the reduction (increase) in estimates of ultimate Defendant A&E liabilities for prior periods is presented as a component of other income (expense) in our consolidated statement of earnings, there is not a U.S. GAAP measure that is directly comparable to Reserve/Claims Savings presented on a non-GAAP basis. However, we believe Reserve / Claims Savings provides investors with a meaningful measure of claims management performance within our Non-life Run-off segment that is consistent with management’s view of the business because it combines the reduction (increase) in estimates of net ultimate losses related to our direct exposure to certain acquired asbestos and environmental liabilities with the reduction (increase) in estimates of net ultimate losses related to liabilities that we have insured. See “Non-life Run-off Reserve / Claim Savings” on page 12 for further information. | enstargroup.com 3
Explanatory Notes (continued) Investment Composition - Non-GAAP In certain instances, U.S. GAAP requirements result in classifications of our investment assets that may not correspond to management’s view of the underlying economic exposure of a particular investment. As such, we have prepared a non-GAAP view of our invested assets based on our assessment of the underlying economic exposure of each investment, which is consistent with the manner in which management views our investment portfolio composition. GAAP requires, in part, that invested assets be classified based upon the legal form of the investment without regard to the underlying economic exposure. Management’s view “looks through” the legal form of an investment and aggregates the classification based upon the underlying economic exposure of each investment. For example: 1. Enstar has certain private equity funds, privately held equity (which are direct investments in companies), private credit funds and real estate equity funds that are collectively held in a limited partnership. U.S. GAAP requires that the investment be classified as “Private equity funds” within “Other Investments”. For management reporting purposes, we disaggregate private equity funds, privately held equity, private credit funds and real estate equity funds and present them separately based on the underlying investment. 2. Enstar has certain public equity investments that are held directly on its balance sheet and some that are held in a fund. U.S. GAAP requires that the investment on our balance sheet be classified as “Equities” in our financial statements. Public equity held in fund format is classified as “Equity funds” within “Other Investments”. For management reporting purposes, we have aggregated all directly held public equity and public equity funds into one line item “Public equity.” 3. Enstar has certain investments in public shares of exchange traded funds (“ETF”) where the underlying exposure of the ETF is an investment in investment grade fixed income securities. U.S. GAAP requires that the investment be classified as “Equities”. For management reporting, we have classified the investment as “Bond/loan funds.” 4. Enstar has certain investments in public equity investments where the underlying is CLO mezzanine debt. For management reporting purposes, we have classified as “Bond/loan funds.” 5. Enstar has certain investments in direct CLO equities and some in fund format. For management reporting purposes, we have aggregated all CLO equities into one line item of “CLO equities.” Underwriting Ratios In presenting our results for the Atrium and StarStone segments, we discuss the loss ratio, acquisition expense ratio, operating expense ratio, and the combined ratio of our active underwriting operations within these segments. Management believes that these ratios provide the most meaningful measure for understanding our underwriting profitability. These measures are calculated using U.S. GAAP amounts presented on the statements of earnings for both Atrium and StarStone. The loss ratio is calculated by dividing net incurred losses and LAE by net premiums earned. The acquisition expense ratio is calculated by dividing acquisition costs by net premiums earned. The operating expense ratio is calculated by dividing operating expenses by net premiums earned. The combined ratio is the sum of the loss ratio, the acquisition expense ratio and the operating expense ratio. Cautionary Statements Forward-Looking Statements This investor financial supplement contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include statements regarding the intent, belief or current expectations of Enstar and its management team. Investors are cautioned that any such forward-looking statements speak only as of the date they are made, are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements as a result of various factors. In particular, the evolving COVID-19 pandemic has caused significant economic and financial turmoil globally, as well as uncertainty and volatility in the financial markets. Due to the global uncertainty, we are unable to predict the longer-term effects of the pandemic on our business at this time. Important risk factors regarding Enstar can be found under the heading "Risk Factors" in our Form 10-K for the year ended December 31, 2019 and in our Form 10-Q for the nine months ended September 30, 2020 and are incorporated herein by reference. Furthermore, Enstar undertakes no obligation to update any written or oral forward-looking statements or publicly announce any updates or revisions to any of the forward-looking statements contained herein, to reflect any change in its expectations with regard thereto or any change in events, conditions, circumstances or assumptions underlying such statements, except as required by law. Uncertainties Relating to the COVID-19 Pandemic We expect that uncertainty and volatility in financial markets will continue to impact the value of our investments. The scope, duration and magnitude of the direct and indirect effects of the COVID-19 pandemic are changing rapidly and are difficult to anticipate. As with others in our industry, we are subject to economic factors such as interest rates, foreign exchange rates, underwriting events, regulation, tax policy changes, political risks and other market risks that can impact our strategy, operations, and results. The underwriting losses related to the COVID-19 pandemic disclosed in this press release represent our estimates of net incurred losses and loss adjustment expenses through September 30, 2020. Given the uncertainties associated with COVID-19 and its impact, and the limited information upon which our current estimates have been made, our preliminary reserves and the underlying estimated level of claim losses and costs arising from COVID-19 may materially change. | enstargroup.com 4
Financial Highlights Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Key Earnings Metrics Net earnings attributable to Enstar ordinary shareholders $ 615,013 $ 117,743 $ 896,745 $ 708,336 Non-GAAP operating income attributable to Enstar ordinary shareholders (1) $ 574,382 $ 32,738 $ 804,220 $ 341,155 Basic net earnings per ordinary share $ 28.50 $ 5.48 $ 41.58 $ 32.98 Diluted net earnings per ordinary share $ 28.24 $ 5.42 $ 41.14 $ 32.58 Diluted non-GAAP operating income per ordinary share (1) $ 26.37 $ 1.51 $ 36.89 $ 15.69 Key Non-life Run-off Metric Reduction (increase) in estimates of net ultimate losses - prior periods $ (3,977) $ 57,074 $ 80,455 $ 130,481 Reduction in estimates of ultimate net defendant A&E liabilities - prior periods 48,439 — 75,332 4,259 Total Non-life Run-off reserve / claims savings (1) $ 44,462 $ 57,074 $ 155,787 $ 134,740 Key Investment Return Metrics Net investment income $ 72,130 $ 81,502 $ 241,287 $ 231,424 Net realized gains 53,488 23,389 114,894 49,243 Net unrealized gains, trading 446,517 121,671 723,658 809,246 Total investment return included in net earnings $ 572,135 $ 226,562 $ 1,079,839 $ 1,089,913 Unrealized gains, on fixed income securities, AFS, net of reclassification adjustments excluding foreign exchange 591 13 43,729 731 Total investment return $ 572,726 $ 226,575 $ 1,123,568 $ 1,090,644 Total investable assets $ 15,964,697 $ 13,482,646 $ 15,964,697 $ 13,482,646 Annualized investment book yield 2.34 % 3.05 % 2.70 % 2.92 % Investment return included in net earnings 3.68 % 1.70 % 7.40 % 8.37 % Total investment return 3.69 % 1.70 % 7.70 % 8.37 % Key Shareholder Metrics Ordinary shareholders’ equity $ 5,310,885 $ 4,127,800 $ 5,310,885 $ 4,127,800 Total Enstar shareholders’ equity $ 5,820,885 $ 4,637,800 $ 5,820,885 $ 4,637,800 Basic book value per ordinary share $ 246.97 $ 192.08 $ 246.97 $ 192.08 Fully diluted book value per ordinary share $ 242.36 $ 188.81 $ 242.36 $ 188.81 Change in fully diluted book value per ordinary share 13.8 % 3.0 % 22.4 % 21.1 % Annualized GAAP return on opening ordinary shareholder equity 52.6 % 11.8 % 27.6 % 27.8 % Ordinary shares repurchased under repurchase program: Shares 81,954 — 174,464 — Cost $ 12,864 $ — $ 25,390 $ — Average price per share $ 156.96 $ — $ 145.53 $ — Total ordinary shares outstanding 21,503,814 21,490,210 21,503,814 21,490,210 Fully diluted ordinary shares outstanding 21,996,788 21,968,972 21,996,788 21,968,972 Key Balance Sheet Metrics Total assets $ 21,770,588 $ 18,660,467 $ 21,770,588 $ 18,660,467 Debt obligations $ 1,447,908 $ 1,210,675 $ 1,447,908 $ 1,210,675 Total liabilities $ 15,558,504 $ 13,575,190 $ 15,558,504 $ 13,575,190 Total investable assets to ordinary shareholders’ equity 3.01x 3.27x 3.01x 3.27x Debt to total capitalization attributable to Enstar 19.9 % 20.7 % 19.9 % 20.7 % (1) Non-GAAP financial measure, refer to the explanatory notes for further details. | enstargroup.com 5
Book Value Per Share September 30, 2020 December 31, 2019 Numerator: Total Enstar shareholder's equity $ 5,820,885 $ 4,842,183 Less: Series D and E preferred shares 510,000 510,000 Total Enstar ordinary shareholders' equity (A) 5,310,885 4,332,183 Proceeds from assumed conversion of warrants(1) 20,229 20,229 Numerator for fully diluted book value per ordinary share calculations (B) $ 5,331,114 $ 4,352,412 Denominator: Ordinary shares outstanding (C) (2) 21,503,814 21,511,505 Effect of dilutive securities: Share-based compensation plans (3) 317,073 302,565 Warrants(1) 175,901 175,901 Fully diluted ordinary shares outstanding (D) 21,996,788 21,989,971 Book value per ordinary share: Basic book value per ordinary share = (A) / (C) $ 246.97 $ 201.39 Fully diluted book value per ordinary share = (B) / (D) $ 242.36 $ 197.93 (1) There are warrants outstanding to acquire 175,901 Series C Non-Voting Ordinary Shares for an exercise price of $115.00 per share, subject to certain adjustments (the "Warrants"). The Warrants were issued in April 2011 and expire in April 2021. The Warrant holder may, at its election, satisfy the exercise price of the Warrants on a cashless basis by surrender of shares otherwise issuable upon exercise of the Warrants in accordance with a formula set forth in the Warrants. (2) Ordinary shares outstanding includes voting and non-voting shares but excludes ordinary shares held in the Enstar Group Limited Employee Benefit Trust (the "EB Trust") in respect of awards made under our Joint Share Ownership Plan, a sub-plan to our Amended and Restated 2016 Equity Incentive Plan (the "JSOP"). (3) Share-based dilutive securities include restricted shares, restricted share units, and performance share units ("PSUs"). The amounts for PSUs and ordinary shares held in the EB trust in respect of the JSOP are adjusted at the end of each period end to reflect the latest estimated performance multipliers for the respective awards. The JSOP shares did not have a dilutive effect as at September 30, 2020. Growth in Fully Diluted Book Value Per Share $250 $242.36 $197.93 $200 $159.19 $155.94 $143.68 $150 $129.65 $119.22 $105.20 $93.30 $100 $82.97 $71.68 $50 $0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD 2020 | enstargroup.com 6
Book Value and Share Price Performance Comparison of 10 Year Cumulative Total Return & Fully Diluted BVPS 400% 350% 300% 250% 200% 150% 100% 50% —% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 YTD 2020 Enstar Fully Diluted BVPS ESGR Share Price (1) S&P 500 (1) S&P Insurance Index (1) (1) Source: S&P Market Intelligence | enstargroup.com 7
Summary Balance Sheets September 30, 2020 June 30, 2020 December 31, 2019 ASSETS Short-term and fixed maturity investments, trading $ 5,006,775 $ 5,375,373 $ 6,194,825 Short-term and fixed maturity investments, AFS 3,161,647 2,302,981 1,666,387 Funds held - directly managed 1,066,639 1,168,856 1,187,552 Other investments, including equities 4,358,029 3,919,556 3,244,752 Equity method investments 516,795 362,398 326,277 Total investments 14,109,885 13,129,164 12,619,793 Cash and restricted cash 1,197,322 988,521 971,349 Premiums receivable 450,977 541,450 491,511 Reinsurance and insurance recoverable 2,246,944 2,522,331 2,629,989 Funds held by reinsured companies 657,490 1,466,596 475,732 Goodwill and intangible assets 62,959 178,552 191,568 Other assets (1) 888,523 952,399 971,387 Assets held for sale 2,156,488 1,514,902 1,474,770 TOTAL ASSETS $ 21,770,588 $ 21,293,915 $ 19,826,099 LIABILITIES Losses and loss adjustment expenses $ 10,300,884 $ 10,593,436 $ 9,868,404 Defendant asbestos and environmental liabilities 754,037 808,062 847,685 Unearned premiums 335,336 513,308 533,692 Insurance and reinsurance balances payable 581,615 573,089 420,546 Debt obligations 1,447,908 1,542,022 1,191,207 Other liabilities (2) 485,381 459,404 460,892 Liabilities held for sale 1,653,343 1,237,595 1,208,531 TOTAL LIABILITIES 15,558,504 15,726,916 14,530,957 COMMITMENTS AND CONTINGENCIES REDEEMABLE NONCONTROLLING INTEREST 376,731 366,533 438,791 SHAREHOLDERS’ EQUITY Ordinary shareholders’ equity (3) 5,310,885 4,676,913 4,332,183 Series D & E preferred shares 510,000 510,000 510,000 Total Enstar shareholders’ equity 5,820,885 5,186,913 4,842,183 Noncontrolling interest 14,468 13,553 14,168 TOTAL SHAREHOLDERS’ EQUITY 5,835,353 5,200,466 4,856,351 TOTAL LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND SHAREHOLDERS’ EQUITY $ 21,770,588 $ 21,293,915 $ 19,826,099 (1) Other assets also includes deferred tax assets and deferred acquisition costs. (2) Other liabilities also includes deferred tax liabilities. (3) Ordinary shareholders’ equity includes voting ordinary shares, non-voting convertible ordinary Series C and Series E shares, Series C preferred shares, treasury shares, joint share ownership plan voting ordinary shares, additional paid-in capital, accumulated other comprehensive income and retained earnings. | enstargroup.com 8
Summary Earnings Statements Three Months Ended Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 INCOME Net premiums earned $ 161,724 $ 175,802 $ 463,946 $ 618,711 Fees and commission income 10,787 6,437 28,325 18,931 Net investment income 72,130 81,502 241,287 231,424 Net realized and unrealized gains 500,005 145,060 838,552 858,489 Other income 48,404 822 67,761 15,368 793,050 409,623 1,639,871 1,742,923 EXPENSES Net incurred losses and LAE 109,686 163,258 339,678 566,111 Acquisition costs 37,708 33,310 132,818 162,192 General and administrative expenses 115,828 97,365 359,086 296,304 Interest expense 15,003 14,950 42,436 39,022 Net foreign exchange (gains) losses 8,156 (13,665) 1,375 (20,097) EARNINGS BEFORE INCOME TAXES 506,669 114,405 764,478 699,391 Income tax expense (13,915) (13,465) (25,295) (25,265) Earnings from equity method investments 149,065 17,703 152,725 44,188 NET EARNINGS FROM CONTINUING OPERATIONS 641,819 118,643 891,908 718,314 NET EARNINGS FROM DISCONTINUING OPERATIONS, NET OF INCOME TAXES 4,031 7,916 810 12,041 NET EARNINGS 645,850 126,559 892,718 730,355 Net (earnings) loss attributable to noncontrolling interest (21,912) 109 30,802 4,970 NET EARNINGS ATTRIBUTABLE TO ENSTAR 623,938 126,668 923,520 735,325 Dividends on preferred shares (8,925) (8,925) (26,775) (26,989) NET EARNINGS ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS $ 615,013 $ 117,743 $ 896,745 $ 708,336 COMPREHENSIVE INCOME NET EARNINGS $ 645,850 $ 126,559 $ 892,718 $ 730,355 Other comprehensive income (loss), net of income taxes: Unrealized gains (losses) arising during the period, net of reclassification adjustments 9,331 (301) 61,542 449 Cumulative currency translation adjustment 1,891 (2,551) — (4,390) Increase in defined benefit pension liability — (952) — (952) Total other comprehensive income (loss) 11,222 (3,804) 61,542 (4,893) Comprehensive income 657,072 122,755 954,260 725,462 Comprehensive (income) loss attributable to noncontrolling interest (22,546) 206 23,962 4,912 COMPREHENSIVE INCOME ATTRIBUTABLE TO ENSTAR $ 634,526 $ 122,961 $ 978,222 $ 730,374 | enstargroup.com 9
Earnings Per Share Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Numerator: Earnings attributable to Enstar ordinary shareholders: Net earnings from continuing operations (1) $ 612,636 $ 113,074 $ 896,267 $ 701,234 Net earnings from discontinued operations (2) 2,377 4,669 478 7,102 Net earnings attributable to Enstar ordinary shareholders: 615,013 117,743 896,745 708,336 Denominator: Weighted-average ordinary shares outstanding — basic (3) 21,578,106 21,488,216 21,564,447 21,476,586 Effect of dilutive securities: Share equivalents: Share-based compensation plans (4) 143,581 169,162 180,437 204,288 Warrants 57,042 63,119 54,743 60,625 Weighted-average ordinary shares outstanding — diluted 21,778,729 21,720,497 21,799,627 21,741,499 Earnings (loss) per ordinary share attributable to Enstar: Basic: Net earnings from continuing operations $ 28.39 $ 5.26 $ 41.56 $ 32.65 Net earnings from discontinued operations 0.11 0.22 0.02 0.33 Net earnings per ordinary share $ 28.50 $ 5.48 $ 41.58 $ 32.98 Diluted: Net earnings from continuing operations $ 28.13 $ 5.21 $ 41.12 $ 32.25 Net earnings from discontinued operations 0.11 0.21 0.02 0.33 Net earnings per ordinary share $ 28.24 $ 5.42 $ 41.14 $ 32.58 (1) Net earnings (loss) from continuing operations attributable to Enstar ordinary shareholders equals net earnings (loss) from continuing operations, plus net loss (earnings) from continuing operations attributable to noncontrolling interest, less dividends on preferred shares. (2) Net earnings (loss) from discontinued operations attributable to Enstar ordinary shareholders equals net earnings (loss) from discontinued operations, net of income taxes, plus net loss (earnings) from discontinued operations attributable to noncontrolling interest; refer to Note 4 - "Divestitures, Held-for-Sale Businesses and Discontinued Operations" to our unaudited condensed consolidated financial statements included within Item 1 of our Quarterly Report on Form 10-Q for a breakdown by period. (3) Weighted-average ordinary shares for basic earnings per share includes ordinary shares (voting and non-voting) but excludes ordinary shares held in the EB Trust in respect of JSOP awards. (4) Share-based dilutive securities include restricted shares, restricted share units, and performance share units. Certain share-based compensation awards, including the ordinary shares held in the EB Trust in respect of JSOP awards, were excluded from the calculation for the three and nine months ended September 30, 2020 because they were anti-dilutive. | enstargroup.com 10
Non-GAAP Operating Income Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Net earnings attributable to Enstar ordinary shareholders (A) $ 615,013 $ 117,743 $ 896,745 $ 708,336 Adjustments: Net realized and unrealized (gains) on fixed maturity investments and funds held - directly managed (1) (67,294) (135,005) (207,097) (558,755) Change in fair value of insurance contracts for which we have elected the fair value option 21,042 41,374 96,848 135,377 Net (earnings) from discontinued operations (4,031) (7,916) (810) (12,041) Tax effects of adjustments (2) 5,771 12,042 19,070 50,841 Adjustments attributable to noncontrolling interest (3) 3,881 4,500 (536) 17,397 Non-GAAP operating income attributable to Enstar ordinary shareholders (B) (4) $ 574,382 $ 32,738 $ 804,220 $ 341,155 Diluted net earnings per ordinary share $ 28.24 $ 5.42 $ 41.14 $ 32.58 Adjustments: Net realized and unrealized (gains) on fixed maturity investments and funds held - directly managed (1) (3.09) (6.21) (9.50) (25.71) Change in fair value of insurance contracts for which we have elected the fair value option 0.97 1.90 4.44 6.23 Net (earnings) from discontinued operations (0.19) (0.36) (0.04) (0.55) Tax effects of adjustments (2) 0.26 0.55 0.87 2.34 Adjustments attributable to noncontrolling interest (3) 0.18 0.21 (0.02) 0.80 Diluted non-GAAP operating income per ordinary share (4) $ 26.37 $ 1.51 $ 36.89 $ 15.69 Weighted average ordinary shares outstanding: Basic 21,578,106 21,488,216 21,564,447 21,476,586 Diluted 21,778,729 21,720,497 21,799,627 21,741,499 Opening ordinary shareholders’ equity (C) $ 4,676,913 $ 4,004,830 $ 4,332,183 $ 3,391,933 Annualized GAAP return on opening ordinary shareholders’ equity = ((A) / # of Quarters * 4) / (C) 52.6 % 11.8 % 27.6 % 27.8 % (1) Represents the net realized and unrealized gains and losses related to fixed maturity securities included in net earnings (loss). Our fixed maturity securities are held directly on our balance sheet and also within the "Funds held - directly managed" balance. Refer to Note 5 - "Investments" to our unaudited condensed consolidated financial statements included within Item 1 of our Quarterly Report on Form 10-Q for further details on our net realized and unrealized gains and losses. (2) 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. (3) Represents the impact of the adjustments on the net earnings (loss) attributable to noncontrolling interest associated with the specific subsidiaries to which the adjustments relate. (4) Non-GAAP financial measure, refer to the explanatory notes on page 3 for further details. | enstargroup.com 11
Non-life Run-off Reserve / Claims Savings Three Months Ended Nine Months Ended September 30, September 30, FS Reference (1) 2020 2019 2020 2019 Reconciliation of reserve / claims savings to GAAP line items in the Non-life Run-off segment: Net incurred losses and LAE: Reduction (increase) in estimates of net ultimate losses - prior periods (A) Note 9 $ (3,977) $ 57,074 $ 80,455 $ 130,481 Reduction (increase) in estimates of net ultimate losses - current period Note 9 (8,218) (23,894) (24,153) (106,811) Reduction in provisions for unallocated LAE Note 9 14,605 12,158 34,509 38,229 Amortization of deferred charge assets Note 9 (10,316) (17,009) (36,008) (28,006) Amortization of fair value adjustments Note 9 (5,310) (17,538) (21,653) (34,033) Changes in fair value - fair value option Note 9 (21,042) (41,374) (96,848) (135,377) Net incurred losses and LAE - Non-life Run-off Note 9 $ (34,258) $ (30,583) $ (63,698) $ (135,517) Other income (expense): Reduction in estimates of ultimate net defendant A&E liabilities - prior periods (B) Note 10 $ 48,439 $ — $ 75,332 $ 4,259 Reduction (increase) in estimated future defendant A&E expenses Note 10 3,124 800 6,127 3,104 Amortization of fair value defendant A&E adjustments Note 10 (7,636) (102) (16,234) (303) All other income (expense) - Non-life Run-off 4,096 (983) 2,862 8,076 Other income (expense) - Non-life Run-off Note 22 $ 48,023 $ (285) $ 68,087 $ 15,136 Non-life Run-off reserve / claims savings: Reduction (increase) in estimates of net ultimate losses - prior periods = (A) Note 9 $ (3,977) $ 57,074 $ 80,455 $ 130,481 Reduction in estimates of ultimate net defendant A&E liabilities - prior periods = (B) Note 10 48,439 — 75,332 4,259 Reserve / claims savings: total reduction in net ultimate losses (2) = (A) + (B) $ 44,462 $ 57,074 $ 155,787 $ 134,740 (1) Refer to the corresponding note to our unaudited condensed consolidated financial statements included within Item 1 of our Quarterly Report on Form 10-Q for further details. (2) Non-GAAP financial measure, refer to the explanatory notes on page 3 for further details. | enstargroup.com 12
Investment Composition - GAAP September 30, 2020 December 31, 2019 Short-term and fixed maturity investments, trading and AFS and funds held - directly managed U.S. government & agency $ 789,630 4.9 % $ 696,077 4.9 % U.K. government 114,777 0.7 % 161,772 1.2 % Other government 490,447 3.1 % 702,856 5.0 % Corporate 5,679,909 35.7 % 5,448,270 38.7 % Municipal 161,839 1.0 % 140,687 1.0 % Residential mortgage-backed 529,239 3.3 % 400,914 2.9 % Commercial mortgage-backed 843,119 5.3 % 813,746 5.8 % Asset-backed 613,663 3.8 % 670,235 4.8 % Total 9,222,623 57.8 % 9,034,557 64.3 % Other assets included within funds held - directly managed 12,438 0.1 % 14,207 0.1 % Equities Publicly traded equities 303,932 1.9 % 327,875 2.3 % Exchange-traded funds 78,182 0.5 % 133,047 0.9 % Privately held equities 271,045 1.7 % 265,799 1.9 % Total 653,159 4.1 % 726,721 5.1 % Other investments Hedge funds 2,087,091 13.1 % 1,121,904 8.0 % Fixed income funds 684,031 4.3 % 481,039 3.4 % Equity funds 290,129 1.8 % 410,149 2.9 % Private equity funds 320,455 2.0 % 323,496 2.3 % CLO equities 84,532 0.5 % 87,555 0.6 % CLO equity funds 140,458 0.9 % 87,509 0.6 % Private credit funds 90,476 0.6 % — — % Other 7,698 — % 6,379 — % Total 3,704,870 23.2 % 2,518,031 17.9 % Equity method investments 516,795 3.2 % 326,277 2.3 % Total investments 14,109,885 88.4 % 12,619,793 89.7 % Cash and cash equivalents (including restricted cash) 1,197,322 7.5 % 971,349 6.9 % Funds held by reinsured companies 657,490 4.1 % 475,732 3.4 % Total investable assets $ 15,964,697 100.0 % $ 14,066,874 100.0 % Duration (in years) (1) 4.97 4.86 Average Credit Rating (1) A+ A+ (1) Calculation includes cash and cash equivalents, short-term investments, fixed maturities and the fixed maturities within our funds held - directly managed portfolios at September 30, 2020 and December 31, 2019. | enstargroup.com 13
Investment Performance - GAAP Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Net investment income: Fixed income securities (1) $ 63,472 $ 67,045 $ 214,130 $ 210,278 Cash and restricted cash 678 10,038 3,546 12,041 Other investments, including equities 10,771 7,058 33,880 18,477 Less: Investment expenses (2,791) (2,639) (10,269) (9,372) Total net investment income (expense) $ 72,130 $ 81,502 $ 241,287 $ 231,424 Net realized gains (losses): Fixed income securities (1) $ 45,156 $ 27,270 $ 105,683 $ 50,456 Other investments, including equities 8,332 (3,881) 9,211 (1,213) Total net realized gains (losses) $ 53,488 $ 23,389 $ 114,894 $ 49,243 Net unrealized gains (losses): Fixed income securities, trading (1) $ 22,138 $ 107,735 $ 101,414 $ 508,299 Other investments, including equities 424,379 13,936 622,244 300,947 Total net unrealized gains (losses) $ 446,517 $ 121,671 $ 723,658 $ 809,246 Total investment return included in earnings (A) $ 572,135 $ 226,562 $ 1,079,839 $ 1,089,913 Other comprehensive income: Unrealized gains (losses), on fixed income securities, AFS, net of reclassification adjustments excluding foreign exchange (B) (1) $ 591 $ 13 $ 43,729 $ 731 Total investment return = (A) + (B) $ 572,726 $ 226,575 $ 1,123,568 $ 1,090,644 Annualized income from fixed income assets (2) $ 256,600 $ 308,332 $ 290,235 $ 296,425 Average aggregate fixed income assets, at cost (2)(3) 10,984,792 10,109,050 10,735,478 10,144,450 Annualized investment book yield 2.34 % 3.05 % 2.70 % 2.92 % Average aggregate invested assets, at fair value (2) $ 15,529,010 $ 13,364,607 $ 14,591,198 $ 13,023,499 Investment return included in net earnings 3.68 % 1.70 % 7.40 % 8.37 % Total investment return 3.69 % 1.70 % 7.70 % 8.37 % (1) Fixed income securities includes both trading and AFS short-term and fixed maturity investments as well as funds held - directly managed whereas, fixed income securities, trading excludes AFS investments and fixed income, AFS excludes trading investments. (2) Fixed income assets includes fixed income securities and cash and restricted cash. (3) These amounts are an average of the amounts disclosed in our quarterly U.S. GAAP consolidated financial statements. | enstargroup.com 14
Investment Composition - Non-GAAP (1) Composition of investable assets September 30, 2020 December 31, 2019 Fixed maturities $ 9,222,623 57.8 % $ 9,034,557 64.2 % Equities 819,300 5.1 % 936,876 6.7 % Bond/loan funds 811,644 5.1 % 684,691 4.9 % Hedge funds 2,087,091 13.1 % 1,121,904 8.0 % Private equities 191,240 1.2 % 222,515 1.6 % CLO equities 224,990 1.4 % 175,064 1.2 % Private credit 191,601 1.2 % 79,248 0.5 % Real estate 31,676 0.2 % 23,906 0.2 % Other 487 — % 548 — % Cash equivalents 1,197,322 7.5 % 971,349 6.9 % Funds held 669,928 4.2 % 489,939 3.5 % Total managed cash and investments 15,447,902 96.8 % 13,740,597 97.7 % Equity method investments 516,795 3.2 % 326,277 2.3 % Total investable assets (2) $ 15,964,697 100.0 % $ 14,066,874 100.0 % (1) Non-GAAP financial measures, refer to the explanatory notes on page 4 for further details. (2) Agrees to the total investable assets per GAAP on page 13. | enstargroup.com 15
Investment Composition - Non-GAAP Reconciliation (1) September 30, 2020 December 31, 2019 Equities - GAAP $ 653,159 $ 726,721 Less: Exchange traded funds backed by fixed income securities (78,182) (133,047) Less: Bond fund in equity format (49,431) (70,605) Plus: Equities held in fund format 290,129 410,149 Plus: Privately held equity in fund format 3,625 3,658 Equities - Non-GAAP 819,300 936,876 Fixed income funds - GAAP 684,031 481,039 Plus: Exchange traded funds backed by fixed income securities 78,182 133,047 Plus: Bond fund in equity format 49,431 70,605 Bond/loan funds - Non-GAAP 811,644 684,691 Private equity funds - GAAP 320,455 323,496 Less: Private credit in fund format (101,125) (79,248) Less: Real estate in fund format (24,475) (18,106) Less: Privately held equity in fund format (3,625) (3,658) Plus: Other 10 31 Private equities - Non-GAAP 191,240 222,515 CLO equities - GAAP 84,532 87,555 Plus: CLO equity funds 140,458 87,509 CLO equities - Non-GAAP 224,990 175,064 Private credit funds - GAAP 90,476 — Plus: Private credit held in fund format 101,125 79,248 Private credit - Non-GAAP 191,601 79,248 Funds held by reinsured companies - GAAP 657,490 475,732 Plus: Other assets and liabilities in funds held format 12,438 14,207 Funds held - Non-GAAP 669,928 489,939 Real estate - GAAP — — Plus: Real estate held in fund format 24,475 18,106 Plus: Real estate held in other 7,201 5,800 Real estate - Non-GAAP 31,676 23,906 Short-term and fixed maturity investments, trading and AFS and funds held - directly managed (2) 9,222,623 9,034,557 Other 487 548 Cash and cash equivalents (including restricted cash) 1,197,322 971,349 Hedge Funds 2,087,091 1,121,904 Total managed cash and investments 15,447,902 13,740,597 Equity method investments 516,795 326,277 Total investable assets $ 15,964,697 $ 14,066,874 (1) Non-GAAP financial measures, refer to the explanatory notes on page 4 for further details. (2) Agrees to fixed maturities - non-GAAP on page 15. | enstargroup.com 16
Capital Position & Credit Ratings Capital position September 30, 2020 December 31, 2019 Change Ordinary shareholders' equity $ 5,310,885 $ 4,332,183 $ 978,702 Series D and E preferred shares 510,000 510,000 — Total Enstar shareholders' equity (A) 5,820,885 4,842,183 978,702 Noncontrolling interest 14,468 14,168 300 Total shareholders' equity (B) 5,835,353 4,856,351 979,002 Senior notes 843,095 842,216 879 Junior subordinated notes 344,813 — 344,813 Revolving credit facility 260,000 — 260,000 Term loan facility — 348,991 (348,991) Total debt (C) 1,447,908 1,191,207 256,701 Redeemable noncontrolling interest (D) 376,731 438,791 (62,060) Total capitalization = (B) + (C) + (D) $ 7,659,992 $ 6,486,349 $ 1,173,643 Total capitalization attributable to Enstar = (A) + (C) $ 7,268,793 $ 6,033,390 $ 1,235,403 Debt to total capitalization 18.9 % 18.4 % 0.5 % Debt and Series D and E Preferred Shares to total capitalization 25.6 % 26.2 % (0.6) % Debt to total capitalization attributable to Enstar 19.9 % 19.7 % 0.2 % Debt and Series D and E Preferred Shares to total capitalization available to Enstar 26.9 % 28.2 % (1.3) % Credit ratings (1) Standard and Poor’s Fitch Ratings Long-term issuer BBB (Outlook: Stable) BBB (Outlook: Stable) Senior notes BBB BBB- Junior subordinated notes BB+ BB+ Series D preferred shares BB+ BB+ Series E preferred shares BB+ BB+ (1) Credit ratings are provided by third parties, Standard and 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. | enstargroup.com 17
Results by Segment - Quarter to Date Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Non-life Non-life Run-off Atrium StarStone Other Total Run-off Atrium StarStone Other Total Gross premiums written $ 3,535 $ 49,083 $ 58,566 $ 293 $ 111,477 $ 301 $ 48,746 $ 110,586 $ (2,498) $ 157,135 Net premiums written $ 3,424 $ 46,503 $ 43,338 $ 294 $ 93,559 $ (3,808) $ 43,785 $ 76,020 $ (2,503) $ 113,494 Net premiums earned $ 17,476 $ 42,426 $ 96,116 $ 5,706 $ 161,724 $ 16,837 $ 42,913 $ 111,749 $ 4,303 $ 175,802 Net incurred losses and LAE (34,258) (21,995) (48,390) (5,043) (109,686) (30,583) (28,400) (100,628) (3,647) (163,258) Acquisition costs (2,730) (14,242) (20,608) (128) (37,708) 4,634 (14,466) (23,301) (177) (33,310) Operating expenses (50,345) (3,008) (20,440) — (73,793) (51,395) (3,742) (14,525) — (69,662) Underwriting income (loss) (69,857) 3,181 6,678 535 (59,463) (60,507) (3,695) (26,705) 479 (90,428) Net investment income (loss) 66,918 1,778 6,298 (2,864) 72,130 73,752 1,736 8,161 (2,147) 81,502 Net realized and unrealized gains 486,671 1,533 11,801 — 500,005 138,174 582 6,034 270 145,060 Fees and commission income (expense) 3,637 7,150 — — 10,787 4,196 2,391 (150) — 6,437 Other income (loss) 48,023 72 99 210 48,404 (285) 35 72 1,000 822 Corporate expenses (22,494) (6,084) (3,137) (10,320) (42,035) (11,983) (2,896) — (12,824) (27,703) Interest income (expense) (16,705) — (510) 2,212 (15,003) (17,964) — — 3,014 (14,950) Net foreign exchange gains (losses) (9,663) 2,275 (761) (7) (8,156) 13,056 (924) 1,509 24 13,665 EARNINGS (LOSS) BEFORE INCOME TAXES 486,530 9,905 20,468 (10,234) 506,669 138,439 (2,771) (11,079) (10,184) 114,405 Income tax benefit (expense) (9,271) (2,520) (733) (1,391) (13,915) (13,382) (222) 139 — (13,465) Earnings from equity method investments 149,065 — — — 149,065 17,703 — — — 17,703 NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS 626,324 7,385 19,735 (11,625) 641,819 142,760 (2,993) (10,940) (10,184) 118,643 NET EARNINGS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES — — 4,031 — 4,031 — — 7,916 — 7,916 NET EARNINGS (LOSS) 626,324 7,385 23,766 (11,625) 645,850 142,760 (2,993) (3,024) (10,184) 126,559 Net (earnings) loss attributable to noncontrolling interest (2,519) (2,996) (16,397) — (21,912) (1,439) 1,228 320 — 109 NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR 623,805 4,389 7,369 (11,625) 623,938 141,321 (1,765) (2,704) (10,184) 126,668 Dividends on preferred shares — — — (8,925) (8,925) — — — (8,925) (8,925) NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS $ 623,805 $ 4,389 $ 7,369 $ (20,550) $ 615,013 $ 141,321 $ (1,765) $ (2,704) $ (19,109) $ 117,743 Underwriting ratios: Loss ratio 51.8 % 50.3 % 66.2 % 90.0 % Acquisition expense ratio 33.6 % 21.4 % 33.7 % 20.9 % Operating expense ratio 7.1 % 21.4 % 8.7 % 13.0 % Combined ratio 92.5 % 93.1 % 108.6 % 123.9 % | enstargroup.com 18
Results by Segment - Year to Date Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 Non-life Non-life Run-Off Atrium StarStone Other Total Run-Off Atrium StarStone Other Total Gross premiums written $ 1,707 $ 155,551 $ 300,135 $ 3,237 $ 460,630 $ (24,785) $ 146,519 $ 363,352 $ (1,174) $ 483,912 Net premiums written $ 2,397 $ 136,093 $ 227,066 $ 3,238 $ 368,794 $ (26,395) $ 127,246 $ 291,083 $ (1,197) $ 390,737 Net premiums earned $ 44,023 $ 128,183 $ 276,566 $ 15,174 $ 463,946 $ 141,981 $ 119,865 $ 339,993 $ 16,872 $ 618,711 Net incurred losses and LAE (63,698) (66,003) (197,259) (12,718) (339,678) (135,517) (58,662) (358,864) (13,068) (566,111) Acquisition costs (13,226) (43,235) (76,026) (331) (132,818) (40,033) (41,023) (80,582) (554) (162,192) Operating expenses (147,117) (8,757) (66,385) — (222,259) (139,595) (9,968) (53,217) — (202,780) Underwriting income (loss) (180,018) 10,188 (63,104) 2,125 (230,809) (173,164) 10,212 (152,670) 3,250 (312,372) Net investment income (loss) 223,425 4,382 21,625 (8,145) 241,287 206,337 5,500 25,865 (6,278) 231,424 Net realized and unrealized gains (losses) 838,483 3,392 (3,323) — 838,552 815,902 5,464 31,274 5,849 858,489 Fees and commission income (expense) 12,588 15,737 — — 28,325 13,673 5,773 (515) — 18,931 Other income (expense) 68,087 105 216 (647) 67,761 15,136 106 445 (319) 15,368 Corporate expenses (48,014) (14,494) (39,153) (35,166) (136,827) (47,287) (10,186) — (36,051) (93,524) Interest income (expense) (48,785) — (1,611) 7,960 (42,436) (45,699) — (475) 7,152 (39,022) Net foreign exchange gains (losses) 385 1,115 (5,509) 2,634 (1,375) 20,426 (1) (326) (2) 20,097 EARNINGS (LOSS) BEFORE INCOME TAXES 866,151 20,425 (90,859) (31,239) 764,478 805,324 16,868 (96,402) (26,399) 699,391 Income tax expense (18,276) (3,303) (2,325) (1,391) (25,295) (23,501) (1,930) 251 (85) (25,265) Earnings from equity method investments 152,725 — — — 152,725 44,406 — (218) — 44,188 NET EARNINGS (LOSS) FROM CONTINUING OPERATIONS 1,000,600 17,122 (93,184) (32,630) 891,908 826,229 14,938 (96,369) (26,484) 718,314 NET EARNINGS FROM DISCONTINUED OPERATIONS, NET OF INCOME TAXES — — 810 — 810 — — 12,041 — 12,041 NET EARNINGS (LOSS) 1,000,600 17,122 (92,374) (32,630) 892,718 826,229 14,938 (84,328) (26,484) 730,355 Net (earnings) loss attributable to noncontrolling interest 504 (7,024) 37,322 — 30,802 (6,351) (6,127) 17,448 — 4,970 NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR 1,001,104 10,098 (55,052) (32,630) 923,520 819,878 8,811 (66,880) (26,484) 735,325 Dividends on preferred shares — — — (26,775) (26,775) — — — (26,989) (26,989) NET EARNINGS (LOSS) ATTRIBUTABLE TO ENSTAR ORDINARY SHAREHOLDERS $ 1,001,104 $ 10,098 $ (55,052) $ (59,405) $ 896,745 $ 819,878 $ 8,811 $ (66,880) $ (53,473) $ 708,336 Underwriting ratios: Loss ratio 51.5 % 71.3 % 48.9 % 105.6 % Acquisition expense ratio 33.7 % 27.5 % 34.2 % 23.7 % Operating expense ratio 6.9 % 24.0 % 8.4 % 15.6 % Combined ratio 92.1 % 122.8 % 91.5 % 144.9 % | enstargroup.com 19
