Blue Cross Blue Shield of Michigan has agreed to sell its wholly owned subsidiary, AF Group, to Enstar Group in a transaction backed by investment firm Sixth Street. The move marks a major shift for both organizations and signals a new chapter for one of the nation’s most established workers’ compensation insurers.
The deal, announced February 13, 2026, still requires regulatory approval and other standard closing steps. If completed as expected in the fourth quarter of 2026, AF Group will become a wholly owned subsidiary of Enstar while continuing to operate largely independently from its Lansing headquarters.
A Strategic Exit After Three Decades of Growth
Blue Cross Blue Shield of Michigan acquired AF Group in 1994. At that time, the organization operated as a state-owned entity with limited reach. Under Blue Cross ownership, AF Group expanded far beyond its original mandate and evolved into a national provider of property and casualty insurance, including workers’ compensation coverage for businesses across the country.
Tricia Keith, president and CEO of Blue Cross Blue Shield of Michigan, indicated that the subsidiary had reached a size and maturity that required alignment with a parent focused on property and casualty insurance rather than health care. Blue Cross remains primarily a health insurer, and rising medical costs continue to place pressure on affordability for members and employer groups.
The sale strengthens Blue Cross’s balance sheet and increases capital flexibility. In plain terms, it frees resources so the organization can concentrate on health insurance products and medical services rather than commercial insurance operations.
Why Enstar Wants AF Group
Enstar Group is a global insurance and reinsurance company with more than $22 billion in assets and over three decades of industry experience. The firm has built a reputation for acquiring and managing insurance businesses, particularly those with strong underwriting operations and specialized expertise.
AF Group fits that profile. The company has established itself as a significant player in workers’ compensation insurance, a niche that requires disciplined pricing, claims management, and long-term risk assessment. Workers’ compensation policies often remain active for years, and claims can develop slowly. That makes experience and financial strength especially valuable.
Sixth Street, the investment firm supporting the transaction, manages more than $125 billion in assets. Its involvement signals confidence in AF Group’s long-term profitability and growth prospects.
Continuity for Customers and Partners
Despite the change in ownership, AF Group is expected to continue operating largely as it does today. The company will keep its Lansing headquarters and maintain nationwide service to policyholders, brokers, and business clients.
Lisa Corless, president and CEO of AF Group, emphasized continuity. She noted the organization’s “people-first” culture and underwriting discipline as core strengths that will carry forward under Enstar’s ownership. In practical terms, customers should see little disruption in day-to-day operations.
For businesses that rely on workers’ compensation coverage, stability matters. Employers need insurers that will remain solvent and responsive for decades, not just a few policy cycles.
What the Deal Says About the Insurance Industry
This transaction reflects a broader trend: specialization. Large health insurers increasingly focus on medical coverage, care delivery, and cost management. Property and casualty insurers concentrate on commercial risks such as workplace injuries, liability, and property damage.
Combining both under one corporate roof can work, but it can also dilute focus. Selling AF Group allows Blue Cross to sharpen its mission. Acquiring AF Group allows Enstar to expand deeper into commercial insurance lines where it already has expertise.
Think of it as a corporate version of “stay in your lane.” Each organization moves closer to its core business, which often leads to clearer strategy and stronger performance.
Advisers Behind the Transaction
Several major firms supported the deal. J.P. Morgan Securities LLC served as exclusive financial adviser to Blue Cross Blue Shield of Michigan. Debevoise & Plimpton LLP provided legal counsel, and Milliman acted as actuarial adviser. These roles are typical in large insurance transactions, where financial modeling, regulatory compliance, and risk analysis are critical.
The financial terms were not disclosed, which is common when private companies are involved.
The sale of AF Group marks the end of a 32-year partnership between the insurer and Blue Cross Blue Shield of Michigan. It also positions both organizations to pursue clearer strategic paths. Blue Cross can concentrate on health care affordability and member services. Enstar gains a well-established national insurer with strong underwriting capabilities. If regulatory approvals proceed as expected, the transaction will stand as one of the more significant insurance deals of 2026.