Hello, everyone. I am Matthew Kirk, Group Treasurer and Head of Investor Relations. Thank you for listening to Enstar's first quarter 2022 earnings audio review with acting CFO, Orla Gregory..

Before we begin, I'd like to remind everyone that this presentation contains forward-looking statements and non-GAAP financial measures. Important information regarding these statements and measures is outlined to the text that appears below the link to this recording..

With that, I will turn it over to Orla. .

Thanks, Matt, and welcome to our audio update, which complements our first quarter public filings and provides more context around our results. We started the year with one of our biggest-ever loss portfolio transactions, our $3.1 billion runoff deal with Aspen.

It's also one of the largest transactions in industry history and underlines our reputation and our leading position in the runoff market..

We will assume an incremental $2.4 billion of net loss reserves, with a diverse mix of property, liability and specialty lines of business in exchange for a premium of $2.4 billion, and we will also assume control of claims management.

We expect to close the transaction in the second quarter, and our teams have worked diligently with our partner to forge a successful integration..

Some other highlights since the beginning of the year. We completed a BMA-approved $500 million junior subordinated note offering in January at an attractive rate of 5.5%. And we repurchased $42 million of ordinary shares during the quarter at an average discount to book of 18.6%.

Subsequent to quarter end, we utilized the remaining capacity under the 2021 share repurchase program of $17 million. And we also authorized a new $200 million share repurchase plan..

We have made meaningful progress in deploying into risk assets resulting from our 2021 hedge fund redemption. We have initiated a strategic review of our life insurance platform, Enhanzed Re. As part of this, we evaluated the current marketplace offerings available and Enhanzed Re's strategic position in this market.

As a result, we have concluded we will not be seeking new life business portfolios on this platform..

We also continue to make significant advancements to our ESG strategy, with key disclosures available on our website, including our corporate sustainability report. We believe Enstar's current and future initiatives will benefit the global community and create long-term value for stakeholders..

Finally, the Russian invasion of Ukraine has not only resulted in a humanitarian crisis, but also led to volatility in global markets and loss of insured property.

We have evaluated potential investment underwriting and operational exposures as well as our acquisition pipeline and concluded that there are no significant direct impacts from this event to Enstar..

Turning to our financial results. Our quarterly performance was affected by negative investment market performance linked to rising interest rates and other economic uncertainties. In summary, $334 million of recognized realized and unrealized fixed income investment losses drove our Q1 net loss of $282 million and return on equity of minus 5%.

Book value per share decreased by 9.4% from $316.34 to $286.51 and reflects unrealized fixed income investment losses as the rising interest rate environment has adversely impacted fixed income performance in the short term..

However, we expect to benefit from this over the medium to long term. These results remain within our capital risk tolerances. As a result, we reported annualized total investment return, or TIR, of negative 6.1%. On an adjusted basis, which excludes gains and losses on fixed income securities, annualized TIR was 0.5%..

From a reinsurance performance perspective, we measure the success of our legacy insurance platform with a unique metric called runoff liability earnings, or OLE. OLE measures the change in ultimate net reserves reported in a period on our acquired liabilities and is expressed as a percentage of average net insurance liabilities.

Annualized OLE of 5.1% benefited from reductions in the value of portfolios we hold at fair value and favorable results on our inactive catastrophe programs held by Enhanzed Re..

Annualized adjusted OLE, which excludes these favorable items, was 0.0%. This was in line with our expectations as we complete most of our annual loss reserve studies in the third and fourth quarters of each year and as a result tend to record the largest movements during those periods..

From a regulatory perspective, our 2021 capital metrics will be published as part of our financial condition report filed with the Bermuda Monetary Authority at the end of May. We expect our level of statutory capitalization will not only allow for the successful onboarding of the Aspen transaction, but also for incremental M&A in 2022..

I mentioned the rise in interest rates earlier. As we look to the remainder of the year, we expect continued near-term market volatility. While this will impact us in the short term, we believe we are well positioned to capitalize on the rising rate environment over the midterm.

First, reinvestment of maturing bonds and durable liquidity will capture the higher-yielding environment..

Next, over $3.4 billion of our fixed income and interest-bearing funds held is floating rate, where we will benefit from the rate resets in the coming quarters. Lastly, prospective M&A where investment return is a component of the anticipated return profile is expected to be more accretive..

The final matter I'll cover is inflation. This has always been an area of focus for us and one we continue to manage. To date, we've not seen the same type of claim cost trends as insurers with short tail lines of business such as property and auto are seeing.

This is due to both the type of business we select and how we operate our claims management function. Notably, our reserving process includes expectations of long-term claims loss trends, which includes inflation. Inflation would need to persist for many years to affect long-term trends..

Secondly, unlike traditional insurance companies, we are repricing books of business with the benefit of data and hindsight as most of the portfolios we see were written years ago. Given this season, we would not expect a large uptick in frequency. Thirdly, most of our exposures are capped by contractual limits within our insurance contracts.

And finally, our business model has always been to settle claims in an efficient and responsive manner, reducing the risk of increased claims costs..

With close to 3 decades of operating history, we have successfully navigated through inflationary periods in the past and are focused on continuing to effectively manage all aspects of our portfolios. And finally, our business model has always been to settle claims in an efficient and responsive manner, reducing the risk of increased claims costs.

With close to 3 decades of operating history, we have successfully navigated through inflationary periods in the past and are focused on continuing to effectively manage all aspects of our portfolios..

To close, we are proud to be the leading capital release solutions partner with a strong track record of creating value for our clients and our shareholders for over 27 years. On behalf of our more than 830 dedicated global employees, we thank you for taking the time to listen to our audio update..