---

---

---

---

---

---

---

---

•	liability for losses and loss adjustment expenses ("LAE");

•	liability for policy benefits for life contracts;

•	reinsurance balances recoverable;

•	gross and net premiums written and net premiums earned;

•	impairment charges, including other-than-temporary impairments on investment securities classified as available-for-sale, and impairments on goodwill, intangible assets and deferred charges;

•	fair value measurements of investments;

•	fair value estimates associated with accounting for acquisitions;

•	fair value estimates associated with loss portfolio transfer reinsurance agreements for which we have elected the fair value option; and

•	redeemable noncontrolling interests.

---

---

---

---

---

---

---

---

---

---

---

---

---

---

•	Private equities and private equity funds invest primarily in the financial services industry. All of our investments in private equities and private equity funds are subject to restrictions on redemptions and sales that are determined by the governing documents and limit our ability to liquidate those investments. These restrictions have been in place since the dates of our initial investments.

•

Fixed income funds comprise a number of positions in diversified fixed income funds that are managed by third-party managers. Underlying investments vary from high-grade corporate bonds to non-investment grade senior secured loans and bonds, but are generally invested in liquid fixed income markets. These funds have regularly published prices. One of our funds has a lock-up period of up to two years and is eligible for quarterly redemptions thereafter with 65 days notice. All other funds have liquidity terms that vary from daily up to 45 day's notice. Investments of $0.3 million in fixed income funds were subject to gates or side-pockets, where

---

•

Hedge funds may invest in a wide range of instruments, including debt and equity securities, and utilize various sophisticated strategies to achieve their objectives. We invest in a mixture of fixed income, equity and multi-strategy hedge funds. Our hedge funds have various lock-up periods of up to three years and redemption terms, predominantly 60 and 90 days. Certain of our hedge funds which are past their lock up periods are currently eligible for redemption while others are still in the lock-up period.

•	Equity funds invest in a diversified portfolio of U.S. and international publicly-traded equity securities. The funds have liquidity terms that vary from daily up to quarterly.

•	CLO equities comprise investments in the equity tranches of term-financed securitizations of diversified pools of corporate bank loans. CLO equities denote direct investments by us in these securities.

•	CLO equity fund invests primarily in the equity tranches of term-financed securitizations of diversified pools of corporate bank loans. The fund has a fair value of $41.5 million and is eligible for redemption.

•	Private credit funds invest in direct senior or collateralized loans. The investments are subject to restrictions on redemption and sales that are determined by the governing documents and limit our ability to liquidate our positions in the funds.

•	Call options on equities comprise directly held options to purchase the common equity of publicly traded corporations.

•	Other primarily comprises a fund that provides loans to educational institutions throughout the United States and its territories.

---

---

•

The funds held balance in relation to the Allianz transaction, described in Note 4 - "Significant New Business" in our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017. This receives a variable return reflecting the economics of the investment portfolio underlying the funds held asset and qualifies as an embedded derivative. We have recorded the aggregate of the funds held, typically held at cost, and the embedded derivative as a single amount in our consolidated balance sheet. As at September 30, 2018 and December 31, 2017, the funds held at cost had a carrying value of $1,074.1 million and $994.8 million, respectively, and the embedded derivative had a fair value of $(36.3) million and $4.7 million, respectively, the aggregate of which was $1,037.8 million and $999.5 million, respectively, as included in the table below.

•	The funds held balance in relation to the QBE reinsurance transaction described in Note 4 - "Significant New Business" in our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2017, for which we elected the fair value option.

---

---

•	Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access. Valuation adjustments and block discounts are not applied to Level 1 instruments.

•	Level 2 - Valuations based on quoted prices in active markets for similar assets or liabilities, quoted prices for identical assets or liabilities in inactive markets, or for which significant inputs are observable (e.g. interest rates, yield curves, prepayment speeds, default rates, loss severities, etc.) or can be corroborated by observable market data.

•	Level 3 - Valuations based on unobservable inputs where there is little or no market activity. Unadjusted third party pricing sources or management's assumptions and internal valuation models may be used to determine the fair values.

---

---

---

•

U.S. government and agency securities consist of securities issued by the U.S. Treasury and mortgage pass-through agencies such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and other agencies. Non-U.S. government securities consist of bonds issued by non-U.S. governments and agencies along with supranational organizations. The significant inputs used to determine the fair value of these securities include the spread above the risk-free yield curve, reported trades and broker-dealer quotes. These are considered to be observable market inputs and, therefore, the fair values of these securities are classified as Level 2.

•

Corporate securities consist primarily of investment-grade debt of a wide variety of corporate issuers and industries. The fair values of these securities are determined using the spread above the risk-free yield curve, reported trades, broker-dealer quotes, benchmark yields, and industry and market indicators. These are considered observable market inputs and, therefore, the fair values of these securities are classified as Level 2. Where pricing is unavailable from pricing services, such as in periods of low trading activity or when transactions are not orderly, we obtain non-binding quotes from broker-dealers. Where significant inputs are unable to be corroborated with market observable information, we classify the securities as Level 3.

•	Municipal securities consist primarily of bonds issued by U.S.-domiciled state and municipal entities. The fair values of these securities are determined using the spread above the risk-free yield curve, reported trades, broker-dealer quotes and benchmark yields. These are considered observable market inputs and, therefore, the fair values of these securities are classified as Level 2.

•

Asset-backed securities consist primarily of investment-grade bonds backed by pools of loans with a variety of underlying collateral. Residential and commercial mortgage-backed securities include both agency and non-agency originated securities. Where pricing is unavailable from pricing services, we obtain non-binding quotes from broker-dealers. This is generally the case when there is a low volume of trading activity and current transactions are not orderly. The significant inputs used to determine the fair value of these securities include the spread above the risk-free yield curve, reported trades, benchmark yields, prepayment speeds and default rates. The fair values of these securities are classified as Level 2 if the significant inputs are

---

•	For our investments in private equities and private equity funds, we measure fair value by obtaining the most recently available NAV from the external fund manager or third-party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.

•

Our investments in fixed income funds and equity funds are valued based on a combination of prices from independent pricing services, external fund managers or third-party administrators. For the publicly available prices we have classified the investments as Level 2. For the non-publicly available prices we are using NAV as a practical expedient and therefore these have not been categorized within the fair value hierarchy.

•	For our investments in hedge funds, we measure fair value by obtaining the most recently available NAV as advised by the external fund manager or third-party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.

•

We measure the fair value of our direct investment in CLO equities based on valuations provided by our external CLO equity manager. If the investment does not involve an external CLO equity manager, the fair value of the investment is valued based on valuations provided by the broker or lead underwriter of the investment (the "broker"). Our CLO equity investments have been classified as Level 3 due to the use of unobservable inputs in the valuation and the limited number of relevant trades in secondary markets.

---

•	For our investments in CLO equity funds, we measure fair value by obtaining the most recently available NAV as advised by the external fund manager or third party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.

•	For our investments in private credit funds, we measure fair value by obtaining the most recently available NAV from the external fund manager or third-party administrator. The fair values of these investments are measured using the NAV as a practical expedient and therefore have not been categorized within the fair value hierarchy.

•	For our investments in call options on publicly traded equities, we measure fair value by obtaining the latest option price as of our reporting date. These are classified as Level 2.

---

---

---

•

An increase in the corporate bond rate or credit spread for non-performance risk would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable. Conversely, a decrease in the corporate bond rate or credit spread for non-performance risk would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable.

•	An increase in the weighted average cost of capital would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable. Conversely, a decrease in the weighted average cost of capital would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable.

•	An increase in the risk cost of capital would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable. Conversely, a decrease in the risk cost of capital would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable.

•	An acceleration of the estimated payment pattern would result in an increase in the fair value of the liability for losses and LAE and reinsurance balances recoverable. Conversely, a deceleration of the estimated payment pattern would result in a decrease in the fair value of the liability for losses and LAE and reinsurance balances recoverable.

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

---

•	Investments in funds (carried within other investments) managed by Stone Point, with respect to which we recognized unrealized gains and interest income;

•	Investments in registered investment companies affiliated with entities owned by Trident or otherwise affiliated with Stone Point, with respect to which we recognized unrealized gains and interest income;

•	Separate accounts managed by Eagle Point Credit Management and PRIMA Capital Advisors, which are affiliates of entities owned by Trident, with respect to which we incurred management fees;

•	Investments in funds (carried within other investments) managed by Sound Point Capital, an entity in which Mr. Carey has an indirect minority ownership interest and serves as a director, with respect to which we recognized net unrealized gains;

•	Sound Point Capital has acted as collateral manager for certain of our direct investments in CLO equity securities, with respect to which we recognized net unrealized gains (losses) and interest income; and

•	A separate account managed by Sound Point Capital, with respect to which we incurred management fees.

---

---

---

---

---

---

---

---

---

---

---

---

---

---

•	Atrium Underwriting Group Limited and its subsidiaries ("Atrium"), which manage and underwrite specialist insurance and reinsurance business for Lloyd’s Syndicate 609; and

•	StarStone Insurance Bermuda Limited and its subsidiaries ("StarStone"), which is an A.M. Best A- rated global specialty insurance group with multiple underwriting platforms.

---

(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.

---

•

Net investment income. In a rising interest rate environment, our net investment income would improve as maturities are reinvested at higher rates. Conversely, in a declining interest rate environment, our net investment income would decline as maturities are reinvested at lower rates. All else being equal, we would also expect our net investment income to grow as total investable assets increases as we acquire more business, partially offset by reductions in the investment portfolio for paid claims.

•

Net realized and unrealized gains or losses. These arise from investments in fixed maturities, funds held, equity securities and other investments. Given the nature of our investments in fixed maturities and the average duration of our fixed maturity securities, the return of our fixed maturities investments will be impacted by changes in interest rates. In a rising rate environment, securities may experience unrealized losses prior to maturity. During the first nine months of 2018, we recognized net unrealized losses on our investments of $236.0 million, of which $159.7 million and $45.4 million related to our investments in fixed maturities, trading and funds withheld - directly managed, respectively, primarily due to rising sovereign yields and widening credit spreads. We generally account for our fixed maturity securities as "trading", whereas other companies in our industry may utilize "available-for-sale" accounting. The difference is that unrealized changes on investments classified as trading are recorded through earnings, whereas unrealized changes on investments classified as available-for-sale are recorded directly to shareholders' equity. We may experience further unrealized losses on our fixed maturity investments, depending on investment conditions and general economic conditions. Unrealized amounts would only become realized in the event of a sale of the specific securities prior to maturity or a credit default. For further information on the sensitivity of our portfolio to changes in interest rates, refer to the Interest Rate Risk section within Item 3. "Quantitative and Qualitative Disclosures About Market Risk", included within this Quarterly Report on Form 10-Q. For further discussion of our investments, see "Investable Assets" below.

---

---

---

---

---

---

---

•	Consolidated net losses of $16.0 million and basic and diluted net losses per ordinary share of $0.74

•	Non-GAAP operating loss1 of $2.5 million and diluted non-GAAP operating loss per ordinary share1 of $0.12

•	Net earnings from Non-life Run-off segment of $32.6 million, including investment results

•	Net investment income of $69.4 million and net realized and unrealized losses of $57.2 million, comprised $10.0 million of net realized losses and $47.2 million of net unrealized losses

•	Net premiums earned of $264.6 million, including $37.0 million and $216.4 million in our Atrium and StarStone segments, respectively

•	Combined ratios of 94.7% and 128.5% for the active underwriting operations within our Atrium and StarStone segments, respectively

---

•	Consolidated net losses of $48.9 million and basic and diluted net losses per ordinary share of $2.39

•	Non-GAAP operating income1 of $120.0 million and diluted non-GAAP operating income per ordinary share1 of $5.81

•	Net earnings from Non-life Run-off segment of $37.2 million, including investment results

•	Net investment income of $202.2 million and net realized and unrealized losses of $254.7 million, comprised of $18.6 million of net realized losses and $236.0 million of net unrealized losses

•	Net premiums earned of $663.6 million, including $106.7 million and $526.8 million in our Atrium and StarStone segments, respectively

•	Combined ratios of 95.8% and 118.0% for the active underwriting operations within our Atrium and StarStone segments, respectively

•	Total investments, cash and funds held of $11,374.4 million

•	Total reinsurance balances recoverable of $1,975.6 million

•	Total assets of $15,121.2 million

•	Total shareholders' equity, including preferred shares, of $3,905.4 million and redeemable noncontrolling interest of $458.3 million. Shareholders' equity includes $400.0 million of preferred shares issued in June 2018

•	Total gross reserves for losses and LAE of $8,535.7 million, with $2,010.9 million of gross reserves assumed in our Non-life Run-off operations during the nine months ended September 30, 2018

•	Diluted book value per ordinary share of $161.10, a year-to-date increase of 1.2%

•

Non-life Run-off - Net earnings attributable to the Non-life Run-off segment were $32.6 million for the three months ended September 30, 2018 compared to $80.2 million for the three months ended September 30, 2017. The decrease in net earnings of $47.6 million was primarily due to net realized and unrealized losses of $58.5 million on our investment portfolio in the current period, partially offset by higher net investment income and higher other income;

•	Atrium - Net earnings were $2.0 million for the three months ended September 30, 2018 compared to net losses of $6.1 million for the three months ended September 30, 2017. Net losses in the comparative period were primarily due to the large losses in the third quarter of 2017, namely those attributable to hurricanes Harvey, Irma and Maria, as well as the Mexico earthquake;

•

StarStone - Net losses were $37.1 million for the three months ended September 30, 2018 compared to net losses of $20.1 million for the three months ended September 30, 2017. The increase in net losses was primarily attributable to higher net incurred losses and LAE and higher acquisition costs. The segment results also include the consolidation of StarStone Group's reinsurance to KaylaRe following Enstar's acquisition;

---

•

Net Realized and Unrealized Losses - Net realized and unrealized losses were $57.2 million for the three months ended September 30, 2018 compared to net realized and unrealized gains of $29.3 million for the three months ended September 30, 2017. Net unrealized losses for the three months ended September 30, 2018 included net unrealized losses of $35.2 million on other investments and $13.4 million on fixed maturities investments, which are accounted for on a trading basis through net earnings. The net unrealized losses on our other investments were primarily driven by unrealized losses in our equity and hedge funds. The unrealized losses on fixed maturities were primarily driven by increased sovereign yields and widening corporate credit spreads in the current quarter. Many insurance companies use available-for-sale accounting where unrealized amounts are recorded directly to shareholders’ equity and therefore do not impact earnings. Unrealized amounts would only become realized in the event of a sale of the specific securities prior to maturity or a credit default;

•	Net Investment Income - Net investment income was $69.4 million and $52.0 million for the three months ended September 30, 2018 and 2017, respectively. The increase was primarily due to an increase in average investable assets in our Non-Life Run-off segment due to the transactions noted above, higher reinvestment rates, an increase in duration, and portfolio rebalancing;

•

Noncontrolling Interest - The net losses attributable to noncontrolling interest are directly related to the results from those subsidiary companies in which there are either noncontrolling interests or redeemable noncontrolling interests. The net losses attributable to noncontrolling interest were $11.5 million and $14.8 million for the three months ended September 30, 2018 and 2017, respectively. The decrease was driven by higher net losses in the Atrium segment in the third quarter of 2017 compared to 2018, primarily due to the large losses in the third quarter of 2017, namely those attributable to hurricanes Harvey, Irma and Maria, as well as the Mexico earthquake, which did not reoccur in 2018; and

•

Our non-GAAP operating loss, which excludes the impact of unrealized losses on fixed maturity securities and other items, was $2.5 million for the three months ended September 30, 2018, a decrease of $37.3 million from non-GAAP operating income of $34.8 million for the three months ended September 30, 2017. For a reconciliation of non-GAAP operating income to net earnings (loss) calculated in accordance with GAAP, see "Non-GAAP Financial Measures" below.

•

Non-life Run-off - Net earnings attributable to the Non-life Run-off segment were $37.2 million and $231.2 million for the nine months ended September 30, 2018 and 2017, respectively. The decrease in net earnings of $194.0 million was primarily due net realized and unrealized losses on our investment portfolio in the current period, partially offset by lower net incurred losses and LAE and higher net investment income;

•	Net Investment Income - Net investment income was $202.2 million and $150.2 million for the nine months ended September 30, 2018 and 2017, respectively. The increase of $52.0 million was primarily attributable to an increase in average investable assets due to the transactions noted above, higher reinvestment rates, an increase in duration, and portfolio rebalancing;

•

Net Realized and Unrealized Losses - Net realized and unrealized losses were $254.7 million for the nine months ended September 30, 2018 compared to net realized and unrealized gains of $139.7 million for the nine months ended September 30, 2017. Net unrealized losses for the nine months ended September 30, 2018 included net unrealized losses of $159.7 million on fixed maturities investments, which are accounted for on a trading basis through net earnings and $37.1 million on other investments. The unrealized losses on fixed maturities were primarily driven by increased sovereign yields and widening corporate credit spreads in the current quarter. Many insurance companies use available-for-sale accounting where unrealized

---

•	Atrium - Net earnings for the nine months ended September 30, 2018 and 2017 were $5.5 million and $1.5 million, respectively. The increase was primarily attributable to a lower loss ratio in the current period;

•	StarStone - Net losses were $61.7 million and $1.1 million for the nine months ended September 30, 2018 and 2017, respectively. The increase in net losses was primarily attributable to the increase in net incurred losses and LAE, higher acquisition costs and net realized and unrealized losses on our investment portfolio, partially offset by higher net earned premiums;

•	Other Activities - Net losses were $29.9 million and $47.7 million for the nine months ended September 30, 2018 and 2017, respectively, with the decrease in net losses primarily attributable to the loss on sale of Laguna in the comparative period;

•

Noncontrolling Interest - The net (earnings) losses attributable to the noncontrolling interest are directly related to the results from those subsidiary companies in which there are either noncontrolling interests or redeemable noncontrolling interests. For the nine months ended September 30, 2018 and 2017, the net losses attributable to noncontrolling interest were $19.1 million and the net earnings attributable to noncontrolling interest were $14.1 million, respectively, primarily reflecting losses from the Atrium and StarStone segments, as discussed above; and

•

Our non-GAAP operating income, which excludes the impact of unrealized losses on fixed maturity securities and other items, was $120.0 million for the nine months ended September 30, 2018, a decrease of $27.1 million from non-GAAP operating income of $147.2 million for the nine months ended September 30, 2017. For a reconciliation of non-GAAP operating income to net earnings (loss) calculated in accordance with GAAP, see "Non-GAAP Financial Measures" below.

---

---

---

---

---

---

---

---

---

---

---

---

(1)	Refer to "Underwriting Ratios" for a description of how these ratios are calculated.

---

(1)	Refer to "Underwriting Ratios" for a description of how these ratios are calculated.

---

---

---

---

---

---

---

---

---

---

---

---

---

•	net realized losses on sale of investments of $10.0 million for the three months ended September 30, 2018, compared to net realized gains on sale of investments of $5.4 million for the three months ended September 30, 2017, an increase in net realized losses on sale of investments of $15.4 million;

•	net unrealized losses on fixed maturity securities, trading, of $13.4 million for the three months ended September 30, 2018, compared to $10.7 million for the three months ended September 30, 2017, an increase in net unrealized losses of $2.7 million, primarily driven by lower valuations due to increased sovereign yields in the current period;

•	net unrealized gains on equity securities, trading, of $1.8 million for the three months ended September 30, 2018, compared to $2.7 million for the three months ended September 30, 2017, a decrease of $0.8 million, primarily driven by a less favorable movement in international equity markets in 2018;

•

decrease in fair value of other investments of $35.2 million for the three months ended September 30, 2018, compared to an increase of $27.8 million for the three months ended September 30, 2017, representing a decrease of $63.0 million. The decrease for the three months ended September 30, 2018 was primarily comprised of unrealized losses in our hedge funds and equity funds, partially offset by unrealized gains in our bond funds, private equities, CLO equities and private credit funds. The increase for the three months ended September 30, 2017 was primarily comprised of unrealized gains in our equity funds, fixed income funds, hedge funds, private equities and CLO equities; and

•	decrease in fair value of embedded derivative on funds held and decrease in fair value option on funds held of $0.4 million for the three months ended September 30, 2018, compared to an increase of $4.2 million for the three months ended September 30, 2017, representing a decrease of $4.6 million, primarily driven by lower valuations due to increased sovereign yields.

•	net realized losses on sale of investments of $18.6 million for the nine months ended September 30, 2018, compared to net realized gains of $1.3 million for the nine months ended September 30, 2017, an increase of $19.9 million;

---

•

net unrealized losses on fixed maturity securities, trading of $159.7 million for the nine months ended September 30, 2018, compared to net unrealized gains of $23.8 million for the nine months ended September 30, 2017, a decrease of $183.5 million, primarily driven by lower valuations due to increased sovereign yields and widening of investment-grade corporate credit spreads in the current period;

•	net unrealized gains on equity securities, trading of $6.2 million for the nine months ended September 30, 2018, compared to $13.2 million for the nine months ended September 30, 2017, a decrease of $7.1 million, primarily driven by a less favorable movement in equity markets in 2018;

•

decrease in fair value of other investments of $37.1 million for the nine months ended September 30, 2018, compared to an increase in fair value of other investments of $71.0 million for the nine months ended September 30, 2017, a decrease of $108.1 million. The decrease for the nine months ended September 30, 2018 was primarily comprised of unrealized losses in our equity funds and hedge funds, offset by unrealized gains in our fixed income funds, CLO equities, private equities and private credit funds. The increase for the nine months ended September 30, 2017 was primarily comprised of unrealized gains in our equity funds, fixed income funds, hedge funds, private equities and CLO equities; and

•

decrease in fair value of embedded derivative on funds held and decrease in fair value option on funds held of $45.4 million for the nine months ended September 30, 2018, compared to an increase of $30.4 million for the nine months ended September 30, 2017, representing a decrease of $75.8 million, primarily driven by lower valuations due to increased sovereign yields and widening of investment-grade corporate credit spreads in the current period.

---

---

•	net realized losses on sale of investments of $9.0 million in 2018, compared to net realized gains of $5.2 million in 2017, a decrease of $14.1 million;

•	net unrealized losses on fixed maturity securities, trading, of $13.1 million in 2018, compared to $12.9 million in 2017, an increase in net unrealized losses of $0.2 million, primarily driven by lower valuations due to increased sovereign yields in the current period;

•	net unrealized gains on equity securities, trading, of $1.7 million in 2018, compared to net unrealized gains of $2.4 million in 2017, a decrease in unrealized gains of $0.7 million, primarily driven by a less favorable movement in international equity markets in 2018;

•

decrease in fair value of other investments of $37.8 million in 2018, compared to an increase of $26.1 million in 2017, representing a decrease of $63.8 million. The decrease for the three months ended September 30, 2018 was primarily comprised of unrealized losses in our equity funds and hedge funds, partially offset by unrealized gains in our private equities, fixed income funds, CLO equities and private credit funds. The increase for the three months ended September 30, 2017 was primarily comprised of unrealized gains in our equity funds, fixed income funds, hedge funds, private equities and CLO equities; and

•	decrease in fair value of embedded derivative on funds held and decrease in fair value option on funds held of $0.4 million in 2018, compared to an increase of $4.2 million in 2017, representing a decrease of $4.6 million, primarily driven by lower valuations due to increased sovereign yields.

•	net realized losses of $15.4 million in 2018, compared to net realized gains of $3.3 million in 2017, an increase in net realized losses of $18.7 million;

•	net unrealized losses on fixed maturity securities, trading, of $141.0 million in 2018, compared to net unrealized gains of $12.8 million in 2017, a decrease of $153.8 million, primarily driven by lower valuations due to increased sovereign yields and widening of investment-grade corporate credit spreads in the current period;

•	net unrealized gains on equity securities, trading of $1.5 million in 2018, compared to $12.4 million in 2017, a decrease of $10.9 million, primarily driven by a less favorable movement in international equity markets in 2018;

•	decrease in fair value of other investments of $30.6 million in 2018, compared to an increase in fair value of other investments of $68.1 million in 2017, representing a decrease of $98.7 million. The decrease for the

---

•	decrease in fair value of embedded derivative on funds held and decrease in fair value option on funds held of $45.4 million in 2018, compared to an increase of $30.4 million in 2017, representing a decrease of $75.8 million, primarily driven by lower valuations due to increased sovereign yields and widening of investment-grade corporate credit spreads in the current period.

---

---

---

•	net realized losses on sale of investments of $1.1 million in 2018, compared to net realized gains of $0.1 million in 2017, a decrease of $1.3 million;

•	net unrealized losses on fixed maturities, trading, of $0.3 million in 2018, compared to net unrealized gains of $2.0 million in 2017, a decrease of $2.3 million, driven by lower valuations due to increased sovereign yields in the current period; and

•	increase in fair value of other investments of $2.4 million in 2018, compared to an increase of $2.8 million in 2017, representing a decrease of $0.4 million. The increase in fair value of other investments for the three months ended September 30, 2018 and September 30, 2017 was primarily comprised of unrealized gains in our private equities, fixed income funds and equity funds.

•	net unrealized losses on fixed maturities, trading, of $17.0 million in 2018, compared to net unrealized gains of $10.9 million in 2017, a decrease of $28.0 million, driven by lower valuations due to increased sovereign yields and widening of investment-grade corporate credit spreads in the current period;

•	net unrealized gains on equities, trading, of $4.7 million in 2018, compared to net unrealized gains of $0.6 million in 2017, an increase of $4.1 million, primarily driven by a more favorable movement in an equity security in 2018; and

•

increase in fair value of other investments of $0.4 million in 2018, compared to an increase of $9.6 million in 2017, a decrease of $9.2 million. The increase for the nine months ended September 30, 2018 was primarily comprised of unrealized gains in our fixed income funds and CLO equities, offset by unrealized losses in our equity funds and private equities. The increase for the nine months ended September 30, 2017 was primarily comprised of unrealized gains in our fixed income funds, equity funds and private equities.

---

---

---

---

---

---

(1)

The reserves for losses and LAE represent management’s estimate of the ultimate cost of settling losses. The estimation of losses is based on various complex and subjective judgments. Actual losses paid may differ, perhaps significantly, from the reserve estimates reflected in our financial statements. Similarly, the timing of payment of our estimated losses is not fixed and there may be significant changes in actual payment activity. The assumptions used in estimating the likely payments due by period are based on our historical claims payment experience and industry payment patterns, but due to the inherent uncertainty in the process of estimating the timing of such payments, there is a risk that the amounts paid in any such period can be significantly different from the amounts disclosed above. The amounts in the above table represent our estimates of known liabilities as of September 30, 2018 and do not take into account corresponding reinsurance balance recoverable amounts that would be due to us. Furthermore, certain of the reserves included in the audited consolidated financial statements as of September 30, 2018 were acquired by us and initially recorded at fair value with subsequent amortization, whereas the expected payments by period in the table above are the estimated payments at a future time and do not reflect the fair value adjustment in the amount payable.

(2)	Policy benefits for life and annuity contracts recorded in our unaudited consolidated balance sheet as at September 30, 2018 of $107.5 million are computed on a discounted basis, whereas the expected payments by period in the table above are the estimated payments at a future time and do not reflect a discount of the amount payable.

---

•	risks associated with implementing our business strategies and initiatives;

•	the adequacy of our loss reserves and the need to adjust such reserves as claims develop over time;

•	risks relating to our acquisitions, including our ability to continue to grow, successfully price acquisitions, evaluate opportunities, address operational challenges, support our planned growth and assimilate acquired companies into our internal control system in order to maintain effective internal controls, provide reliable financial reports and prevent fraud;

•	risks relating to our active underwriting businesses, including unpredictability and severity of catastrophic and other major loss events, failure of risk management and loss limitation methods, the risk of a ratings downgrade or withdrawal, cyclicality of demand and pricing in the insurance and reinsurance markets;

•	risks relating to the performance of our investment portfolio and our ability to structure our investments in a manner that recognizes our liquidity needs;

•	changes and uncertainty in economic conditions, including interest rates, inflation, currency exchange rates, equity markets and credit conditions, which could affect our investment portfolio, our ability to finance future acquisitions and our profitability;

•	the risk that ongoing or future industry regulatory developments will disrupt our business, affect the ability of our subsidiaries to operate in the ordinary course or to make distributions to us, or mandate changes in

---

•	risks that we may require additional capital in the future, which may not be available or may be available only on unfavorable terms;

•	risks relating to the availability and collectability of our reinsurance;

•	losses due to foreign currency exchange rate fluctuations;

•	increased competitive pressures, including the consolidation and increased globalization of reinsurance providers;

•	emerging claim and coverage issues;

•	lengthy and unpredictable litigation affecting assessment of losses and/or coverage issues;

•	loss of key personnel;

•	the ability of our subsidiaries to distribute funds to us and the resulting impact on our liquidity;

•	our ability to comply with covenants in our debt agreements;

•	changes in our plans, strategies, objectives, expectations or intentions, which may happen at any time at management’s discretion;

•	operational risks, including system, data security or human failures and external hazards;

•	risks relating to our ability to obtain regulatory approvals, including the timing, terms and conditions of any such approvals, and to satisfy other closing conditions in connection with our acquisition agreements, which could affect our ability to complete acquisitions;

•	our ability to implement our strategies relating to our active underwriting businesses;

•	risks relating to our investments in life settlements contracts, including that actual experience may differ from our assumptions regarding longevity, cost projections, and risk of non-payment from the insurance carrier;

•	risks relating to our subsidiaries with liabilities arising from legacy manufacturing operations;

•	tax, regulatory or legal restrictions or limitations applicable to us or the insurance and reinsurance business generally;

•	changes in tax laws or regulations applicable to us or our subsidiaries, or the risk that we or one of our non-U.S. subsidiaries become subject to significant, or significantly increased, income taxes in the United States or elsewhere;

•	changes in Bermuda law or regulation or the political stability of Bermuda; and

•	changes in accounting policies or practices.

---

---

---

---

(1)	Assumes 10% change in the U.S. dollar relative to other currencies

---

---

(1)	Consists of shares withheld from employees in order to facilitate the payment of withholding taxes on restricted shares granted pursuant to our equity incentive plan. The price for the shares is their fair market value, as determined by reference to the closing price of our ordinary shares on the vesting date.

---

---

1.	I have reviewed this Quarterly Report on Form 10-Q of Enstar Group Limited;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

1.	I have reviewed this Quarterly Report on Form 10-Q of Enstar Group Limited;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.