Cavello Bay Reinsurance, a Bermuda-based subsidiary of Enstar Group, has filed a $400 mn lawsuit against Aspen Insurance Holdings and several affiliates, alleging breach of a 2022 reinsurance agreement.
The suit, lodged Aug 22 in Connecticut Superior Court, claims Aspen owes damages exceeding $400 mn. Interest on the disputed sum alone accrues at more than $50,000 per day, according to the filing.
Defendants include Aspen Insurance UK, Aspen Managing Agency, Aspen Bermuda, Aspen American Insurance, Aspen Specialty Insurance, and the parent holding company.
The dispute traces back to a Jan 10, 2022 agreement. Cavello Bay agreed to reinsure Aspen for claims linked to contracts issued or assumed by Aspen for losses occurring on or before Dec 31, 2019. Losses after Jan 1, 2020 fell outside the deal.
Cavello Bay said it fulfilled its obligations by reimbursing Aspen for qualifying losses.
However, the reinsurer argued Aspen refused to identify or credit premiums collected after Oct 1, 2021 — the contract’s effective date — despite a clause requiring those amounts reduce Cavello Bay’s payments.
According to the complaint, Aspen’s refusal left Cavello Bay economically disadvantaged. The company said the initial reinsurance premium at closing was lower than it should have been and that it has overpaid ultimate net losses without access to the credited premiums.
Cavello Bay stated it attempted to resolve the conflict through correspondence in March and May 2024 but said Aspen remained uncooperative.
Cavello Bay has attempted in good faith to resolve these issues with Aspen for well over a year to no avail.
The case underscores ongoing tension in legacy reinsurance deals, where disputes often hinge on interpretation of premium credit and loss allocation terms.
