HAMILTON, Bermuda, Oct. 31, 2024 (GLOBE NEWSWIRE) -- SiriusPoint Ltd. (“SiriusPoint” or the “Company”) (NYSE:SPNT) today announced results for its third quarter ended September 30, 2024
- Third quarter net income of $5 million, impacted by completion of the previously announced CMIG shareholder transaction. Underlying net income1 of $89 million, up 69% versus prior year driven by higher underwriting and investment income
- Combined ratio of 88.5% in the third quarter for Core business, representing a 4 point improvement versus prior year, resulting in a year to date core combined ratio of 91.1% and core underwriting income of $144 million
- Growth in the quarter of 10% on gross premiums written for continuing lines business (excluding 2023 exited programs), contributing to 7% growth year to date
- Book value per diluted common share of $14.73, an increase of 3% in the quarter and 10% since year-end 2023. Balance sheet remains strong with Q3’24 BSCR estimate at 265%
- Pre-tax estimate of Hurricane Milton losses, net of reinsurance and reinstatement premiums, of approximately $30 million to $40 million
Scott Egan, Chief Executive Officer, said: “It has been another strong quarter of delivery for SiriusPoint, marking our eighth consecutive quarter of positive underwriting income. We have delivered a 4.0 point improvement in the combined ratio to 88.5% whilst growing continuing lines premium by 10% during the quarter. Our focus is resolute on building a strong business driven by disciplined underwriting to create a balanced portfolio that creates shareholder value.
Our strategic partnerships are a powerful tool to help us deliver our growth and underwriting ambitions. We added six new distribution partnerships in the quarter through our MGA Centre of Excellence, which is earning a reputation in the market as an attractive and leading platform for program administrators and MGAs. Fee income from our two consolidated A&H MGAs grew 18% year to date. Net investment income was strong, at $78m for the quarter, and our FY 24 net investment income is now trending ahead of our previous guidance.
We completed on an important two-part strategic transaction with CMIG in the quarter, deploying capital for the purchase and retirement of $125m of common shares and the settlement of Series A Preference Shares, both for cash. Our Q3 BSCR estimate of 265% demonstrates the strength of our balance sheet, and our annualized year to date underlying ROE of 14.4%, which excludes one-off actions, is in line with our medium-term guidance of 12-15% and demonstrates the strength of our earnings.
This quarter marks my second full year at SiriusPoint, and I am incredibly proud of the scale and pace of transformation we have achieved so far. This company is and always will be about our people and I am incredibly grateful to them for their relentless dedication and determination to make the company better. Together, we will drive further value through strategic, targeted improvement as we build a sustainable, best-in-class business for the future.”
Third Quarter 2024 Highlights
- Net income available to SiriusPoint common shareholders of $4.5 million, or $0.03 per diluted common share
- Core income of $69.5 million, including underwriting income of $62.5 million, Core combined ratio of 88.5%
- Core net services fee income of $6.8 million, with service margin of 14.1%
- Net investment income of $77.7 million and total investment result of $92.5 million
- Book value per diluted common share increased $0.42 per share, or 2.9%, from June 30, 2024 to $14.73
- Annualized return on average common equity of 0.7%
Nine Months Ended September 30, 2024 Highlights
- Net income available to SiriusPoint common shareholders of $205.2 million, or $1.11 per diluted common share
- Core income of $177.9 million, including underwriting income of $143.7 million, Core combined ratio of 91.1%
- Core net services fee income of $36.3 million, with service margin of 21.2%
- Net investment income of $234.7 million and total investment result of $195.6 million
- Book value per diluted common share increased $1.38 per share, or 10.3%, from December 31, 2023 to $14.73
- Annualized return on average common equity of 11.4%
- Debt to capital ratio down to 19.7% compared to 23.8% as of December 31, 2023
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1 See definition in “Non-GAAP Financial Measures and Other Financial Metrics” on page 6.
Key Financial Metrics
The following table shows certain key financial metrics for the three and nine months ended September 30, 2024 and 2023:
| Three months ended | Nine months ended | ||||||||||||||
| September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | ||||||||||||
| ($ in millions, except for per share data and ratios) | |||||||||||||||
| Combined ratio | 84.4 | % | 88.0 | % | 86.1 | % | 81.6 | % | |||||||
| Core underwriting income (1) | $ | 62.5 | $ | 42.5 | $ | 143.7 | $ | 213.2 | |||||||
| Core net services income (1) | $ | 7.0 | $ | 7.5 | $ | 34.2 | $ | 31.9 | |||||||
| Core income (1) | $ | 69.5 | $ | 50.0 | $ | 177.9 | $ | 245.1 | |||||||
| Core combined ratio (1) | 88.5 | % | 92.5 | % | 91.1 | % | 87.6 | % | |||||||
| Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders | 0.7 | % | 11.3 | % | 11.4 | % | 16.7 | % | |||||||
| Book value per common share (2) | $ | 15.41 | $ | 13.76 | $ | 15.41 | $ | 13.76 | |||||||
| Book value per diluted common share (2) | $ | 14.73 | $ | 13.35 | $ | 14.73 | $ | 13.35 | |||||||
| Tangible book value per diluted common share (1) (2) | $ | 13.88 | $ | 12.47 | $ | 13.88 | $ | 12.47 | |||||||
| (1) | Core underwriting income, Core net services income, Core income and Core combined ratio are non-GAAP financial measures. See definitions in “Non-GAAP Financial Measures” and reconciliations in “Segment Reporting.” Tangible book value per diluted common share is a non-GAAP financial measure. See definition and reconciliation in “Non-GAAP Financial Measures.” |
| (2) | Prior year comparatives represent amounts as of December 31, 2023. |
Third Quarter 2024 Summary
Consolidated underwriting income for the three months ended September 30, 2024 was $89.0 million compared to $73.8 million for the three months ended September 30, 2023. The improvement was primarily driven by increased favorable prior year loss reserve development and a more favorable commission ratio. For the three months ended September 30, 2024, favorable prior year loss reserve development was $30.6 million from favorable development in Property, mainly driven by reserve releases relating to favorable COVID-19 development trends, as well as favorable development in Accident and Health (“A&H”) due to lower than expected reported attritional losses, compared to $24.7 million for the three months ended September 30, 2023 driven by reserving analyses performed in connection with the March 2, 2023 loss portfolio transfer transaction (“2023 LPT”).
Consolidated underwriting income for the nine months ended September 30, 2024 was $243.7 million compared to $339.2 million for the nine months ended September 30, 2023. The decrease was primarily driven by lower favorable prior year loss reserve development. Favorable prior year loss reserve development for the nine months ended September 30, 2023 included $122.2 million driven by reserving analyses performed in connection with the 2023 LPT. Excluding the favorable development linked to the 2023 LPT, underwriting income increased by $19.8 million primarily resulting from favorable development in Property, mainly driven by reserve releases relating to favorable COVID-19 development trends, as well as favorable development in A&H and our runoff business, due to lower than expected reported attritional losses. This increase was partially offset by higher acquisition costs from business mix changes, including the growth of Insurance & Services.
Reportable Segments
The determination of our reportable segments is based on the manner in which management monitors the performance of our operations, which consist of two reportable segments - Reinsurance and Insurance & Services.
Collectively, the sum of our two segments, Reinsurance and Insurance & Services, constitute our “Core” results. Core underwriting income, Core net services income, Core income and Core combined ratio are non-GAAP financial measures. See reconciliations in “Segment Reporting”. We believe it is useful to review Core results as it better reflects how management views the business and reflects our decision to exit the runoff business. The sum of Core results and Corporate results are equal to the consolidated results of operations.
Core Premium Volume
Three months ended September 30, 2024 and 2023
Gross premiums written decreased by $35.0 million, or 4.8%, to $690.5 million for the three months ended September 30, 2024 compared to $725.5 million for the three months ended September 30, 2023. Net premiums earned decreased by $29.0 million, or 5.0%, to $546.3 million for the three months ended September 30, 2024 compared to $575.3 million for the three months ended September 30, 2023. The decreases in premiums written were primarily driven by the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a Cyber program to another carrier. These decreases were partially offset by increases in Reinsurance from Property and International Specialty and increases from Insurance & Services from strategic organic and new program growth.
Nine months ended September 30, 2024 and 2023
Gross premiums written decreased by $177.0 million, or 6.8%, to $2,413.9 million for the nine months ended September 30, 2024 compared to $2,590.9 million for the nine months ended September 30, 2023. Net premiums earned decreased by $104.7 million, or 6.1%, to $1,617.5 million for the nine months ended September 30, 2024 compared to $1,722.2 million for the nine months ended September 30, 2023. The decreases in premium volume were primarily due to the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a Cyber program to another carrier, with the most significant offset being strategic organic and new program growth within Insurance & Services.
Core Results
Three months ended September 30, 2024 and 2023
Core results for the three months ended September 30, 2024 included income of $69.5 million compared to $50.0 million for the three months ended September 30, 2023. Income for the three months ended September 30, 2024 consists of underwriting income of $62.5 million (88.5% combined ratio) and net services income of $7.0 million, compared to underwriting income of $42.5 million (92.5% combined ratio) and net services income of $7.5 million for the three months ended September 30, 2023. The improvement in net underwriting results was primarily driven by favorable prior year loss reserve development and a more favorable commission ratio, partially offset by higher catastrophe losses.
Losses incurred included $29.7 million of favorable prior year loss reserve development for the three months ended September 30, 2024 primarily resulting from favorable development in Property, mainly driven by reserve releases relating to favorable COVID-19 development trends, as well as favorable development in A&H due to lower than expected reported attritional losses, compared to $12.6 million for the three months ended September 30, 2023 driven by reserving analyses performed in connection with the 2023 LPT.
Catastrophe losses, net of reinsurance and reinstatement premiums, for the three months ended September 30, 2024, were $10.6 million, or 1.9 percentage points on the combined ratio, including $10.0 million from Hurricane Helene, compared to $6.7 million, or 1.2 percentage points on the combined ratio, for the three months ended September 30, 2023, which includes losses of $3.8 million from the Hawaii wildfires and $3.3 million from Hurricane Idalia.
Nine months ended September 30, 2024 and 2023
Core results for the nine months ended September 30, 2024 included income of $177.9 million compared to $245.1 million for the nine months ended September 30, 2023. Income for the nine months ended September 30, 2024 consists of underwriting income of $143.7 million (91.1% combined ratio) and net services income of $34.2 million, compared to underwriting income of $213.2 million (87.6% combined ratio) and net services income of $31.9 million for the nine months ended September 30, 2023. The decrease in net underwriting results was primarily driven by lower favorable prior year loss reserve development. Favorable prior year loss reserve development for the nine months ended September 30, 2023 included $102.4 million driven by reserving analyses performed in connection with the 2023 LPT.
Excluding the favorable development linked to the 2023 LPT, net underwriting income increased by $27.7 million primarily driven by favorable development in Property, mainly driven by reserve releases relating to favorable COVID-19 development trends, as well as favorable development in A&H due to lower than expected reported attritional losses, partially offset by higher acquisition costs from business mix changes, including the growth of Insurance & Services.
Reinsurance Segment
Three months ended September 30, 2024 and 2023
Reinsurance gross premiums written were $314.5 million for the three months ended September 30, 2024, an increase of $49.1 million, or 18.5%, compared to the three months ended September 30, 2023, primarily driven by increases in Bermuda and New York Property and International Specialty, partially offset by lower premiums written in New York Casualty.
Reinsurance generated underwriting income of $41.6 million (84.6% combined ratio) for the three months ended September 30, 2024, compared to underwriting income of $36.9 million (85.6% combined ratio) for the three months ended September 30, 2023. The increase in net underwriting results was primarily driven by lower attritional losses and favorable commission ratio, partially offset by higher catastrophe losses.
Catastrophe losses, net of reinsurance and reinstatement premiums, for the three months ended September 30, 2024, were $11.3 million or 4.2 percentage points on the combined ratio, including $10.0 million from Hurricane Helene, compared to $6.8 million or 2.6 percentage points on the combined ratio for the three months ended September 30, 2023, which includes losses of $3.8 million from the Hawaii wildfires and $3.3 million from Hurricane Idalia.
Nine months ended September 30, 2024 and 2023
Reinsurance gross premiums written were $1,023.4 million for the nine months ended September 30, 2024, an increase of $4.1 million, or 0.4%, compared to the nine months ended September 30, 2023, primarily driven by increases in International Specialty, partially offset by lower premiums written in New York Casualty and Bermuda Specialty.
Reinsurance generated underwriting income of $106.5 million (86.3% combined ratio) for the nine months ended September 30, 2024, compared to underwriting income of $178.4 million (77.4% combined ratio) for the nine months ended September 30, 2023. The decrease in net underwriting results was primarily due to decreased favorable prior year loss reserve development as the nine months ended September 30, 2023 included $90.6 million driven by reserving analyses performed in connection with the 2023 LPT. Net favorable prior year loss reserve development was $33.2 million for the nine months ended September 30, 2024 primarily driven by favorable development in Property, mainly driven by reserve releases relating to favorable COVID-19 development trends.
Insurance & Services Segment
Three months ended September 30, 2024 and 2023
Insurance & Services gross premiums written were $376.0 million for the three months ended September 30, 2024, a decrease of $84.1 million, or 18.3%, compared to the three months ended September 30, 2023, primarily driven by the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a Cyber program to another carrier, representing $98.0 million of gross premiums written for the three months ended September 30, 2023, as well as lower A&H premiums, partially offset by strategic organic and new program growth.
Insurance & Services generated segment income of $27.9 million for the three months ended September 30, 2024, compared to income of $13.3 million for the three months ended September 30, 2023. Segment income for the three months ended September 30, 2024 consists of underwriting income of $20.9 million (92.4% combined ratio) and net services income of $7.0 million, compared to underwriting income of $5.6 million (98.3% combined ratio) and net services income of $7.7 million for the three months ended September 30, 2023. The improvement in underwriting results was primarily driven by net favorable prior year loss reserve development of $13.1 million for the three months ended September 30, 2024, mainly in A&H due to lower than expected reported attritional losses, compared to net adverse prior year loss reserve development of $6.6 million for the three months ended September 30, 2023, mainly in Workers’ Compensation.
Nine months ended September 30, 2024 and 2023
Insurance & Services gross premiums written were $1,390.5 million for the nine months ended September 30, 2024, a decrease of $181.1 million, or 11.5%, compared to the nine months ended September 30, 2023, primarily driven by the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a Cyber program to another carrier, representing $331.8 million of gross premiums written for the nine months ended September 30, 2023, as well as lower A&H premiums, partially offset by strategic organic and new program growth.
Insurance & Services generated segment income of $71.4 million for the nine months ended September 30, 2024, compared to income of $69.5 million for the nine months ended September 30, 2023. Segment income for the nine months ended September 30, 2024 consists of underwriting income of $37.2 million (95.6% combined ratio) and net services income of $34.2 million, compared to underwriting income of $34.8 million (96.3% combined ratio) and net services income of $34.7 million for the nine months ended September 30, 2023. The improvement in underwriting income of $2.4 million for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023 was primarily driven by lower attritional losses in A&H.
Investments
Three months ended September 30, 2024 and 2023
Total net investment income and realized and unrealized investment gains for the three months ended September 30, 2024 was primarily attributable to net investment income related to interest income from our debt and short-term investment portfolio of $81.5 million. Increased investment income is primarily due to increased interest rates and our rotation of the portfolio from cash and cash equivalents and U.S. government and government agency positions to high-grade corporate debt and other securitized assets, in an effort to better diversify our portfolio.
Total net investment income and realized and unrealized investment gains (losses) for the three months ended September 30, 2023 was primarily attributable to investment results from our debt and short-term investment portfolio of $71.0 million driven by dividend and interest income primarily on U.S. treasury bill and corporate debt positions.
Nine months ended September 30, 2024 and 2023
Total net investment income and realized and unrealized investment gains (losses) for the nine months ended September 30, 2024 was primarily attributable to net investment income related to interest income from our debt and short-term investment portfolio of $228.5 million, partially offset by unrealized losses on other long-term investments of $45.8 million. Increased investment income is primarily due to increased interest rates and our rotation of the portfolio from cash and cash equivalents and U.S. government and government agency positions to high-grade corporate debt and other securitized assets, in an effort to better diversify our portfolio. Losses on private other long-term investments were the result of updated fair value analyses consistent with the current insurtech market trends and disposals of positions as we execute our strategy to focus on underwriting relationships with MGAs.
Total net investment income and realized and unrealized investment gains for the nine months ended September 30, 2023 was primarily attributable to net investment income related to interest income from our debt and short-term investment portfolio of $208.5 million. Increased dividend and investment income is due to the ongoing re-positioning of the portfolio to focus on investing in high grade fixed income securities.
Webcast Details
The Company will hold a webcast to discuss its third quarter 2024 results at 8:30 a.m. Eastern Time on November 1, 2024. The webcast of the conference call will be available over the Internet from the Company’s website at www.siriuspt.com under the “Investor Relations” section. Participants should follow the instructions provided on the website to download and install any necessary audio applications. The conference call will be available by dialing 1-877-451-6152 (domestic) or 1-201-389-0879 (international). Participants should ask for the SiriusPoint Ltd. third quarter 2024 earnings call.
