SiriusPoint turns a profit despite cat losses
Specialty re/insurer SiriusPoint reported a net profit of $45 million in the financial year 2021, despite falling to a net loss of $140 million in the fourth quarter. Going into 2022, the company's focus will be on pursuing profitable and sustainable growth and continuing to shift its business mix from reinsurance to insurance.
For the full-year 2021, the company generated a core loss of $163 million, which includes an underwriting loss of $174 million and core combined ratio of 110.0%, partially offset by core net services income of $11 million.
SiriusPoint said the results were primarily driven by catastrophe losses from the European floods and Hurricane Ida and a change in mix of business because of the acquisition of Sirius Group, partially offset by net favourable prior year loss reserve development.
Catastrophe losses, net of reinsurance and reinstatement premiums, for 2021 amounted to $326.0 million, significantly higher than $36.6 million seen in 2020. Losses included $133 million for the European floods and $97 million for Hurricane Ida.
Commenting on the results, Sid Sankaran, chairman and chief executive officer of SiriusPoint, said: “In 2021 we made significant progress in dramatically reshaping our company. Our strategy is focused on a comprehensive re-underwriting of the property and casualty reinsurance portfolio, building value in a newly formed Insurance & Services segment, including our robust and growing MGA platform, and repositioning our capital allocation within our investment portfolio. We believe these actions will reduce our volatility profile and build long-term, differentiated, and sustainable value.”
Sankaran, however, noted that the company's underwriting results for the year reflect a historical overexposure to cat risk and legacy hedge fund re equity exposure.
“They are not in line with our expectations,” he admitted, “but I am pleased with the significant progress we have made towards re-engineering our business.
“We have cut our Cat exposure dramatically, reallocated capital to more attractive opportunities, and reduced our risk profile. As a result of these changes, we now have a smaller global property book, an improving and differentiated global specialty and casualty business, and a continuing mix shift from reinsurance to insurance.”
“Our plan is to reduce capital intensity and volatility on the asset side. This frees up capital to support the growth of our Insurance & Services business,” Sankaran said.
“[...] We have financial strength, a flexible underwriting and operating platform, a strong entrepreneurial culture, and a disciplined growth mindset. I am full of enthusiasm for the year ahead.”
