SiriusPoint almost doubles net income

Bermuda-based SiriusPoint nearly doubled its second quarter net income as it trimmed expenses and benefited from a jump in other revenues, the company said. 

The specialty re/insurer said it recorded its seventh consecutive quarter of underwriting profit as it recorded net income of $109.9 million compared to $55.9 million in the same period in 2023. 

The jump in net income came as gross written premiums increased by 2.6% to $864 million while net premiums earned dropped to $590.5 million from $639.7 million. The company's combined ratio worsened to 89% from 83%. 

However, the company said its core combined ratio improved to 92.5% compared to 91.5% a year earlier. The company also said it had strong growth in its continuing lines business, which excludes programmes exited in 2023, with GWP rising 22%.

Apart from an increase in other revenues from $5 million to $129 million, the re/insurer also cut expenses from  $633 million to $614 million, largely due to a drop in loss and loss expenses of $11 million and a drop in foreign exchange costs of $14 million. 

“We have continued to execute on our ambition to deliver consistent and stable earnings that create long-term shareholder value," said Scott Egan, chief executive officer. "We had another strong quarter, our seventh consecutive quarter of positive underwriting income. 

"We report a combined ratio for the core operations of 92.5% for the half year, or 92.8% excluding the loss portfolio transfer, which is a 1.0 point improvement over the prior year period on a like-for-like basis. 

"We are growing our continuing lines premium in our target areas of North America programmes, International and Specialty. Q2 was strong in this regard with growth in gross premiums of 22% for continuing lines business. We have increased our full year 2024 net investment income guidance to $275 million to $285 million up from $250 million to $265 million."

Egan said the performance of the company's partnerships with managing general agencies continued to improve, with net income rising 6.5%. 

He added: "We continue to rationalize our MGA equity stakes and realise the significant off-balance sheet value of our Consolidated MGAs. Our total equity stakes in MGAs is down to 22 compared to 36 at the start of 2023. We have also added 11 new distribution partnerships since the start of 2024 providing further evidence of our intent to grow through distribution partnerships in our targeted areas.

"Bolstered by another quarter of strong underwriting results and the completion of our previously announced debt actions, our balance sheet is the strongest it has ever been. Q2'24 BSCR estimate is 284%. This enabled us to reach an agreement for the cash settlement of the Series A Preference shares, purchase and retire $125 million in common stock from CMIG and announce a share buyback authorisation increase to $306 million. These actions attest to our belief in the compelling value of our shares and capital position, which is enhanced by strong performance and relentless execution.”

The company said it had net investment income of $78.2 million, which was offset by $55 million in net realized and unrealized investment losses.  

The company's reinsurance segment had gross written premiums of $352 million and underwriting income of $25 million, down from $61.8 million in 2023. The company attributed the decline to a decrease in favourable prior year loss reserve development to $6.3 million from $25.9 million. 

The insurance and services segment recorded gross premiums written of $490.2 million, an increase of $42.7 million, or 9.5%, compared to 2023. This was attributed to strategic organic and new programme growth, as well as increases across accident and health, partially offset 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 programme to another carrier, representing $117.0 million of gross premiums written in the same period in 2023.

The segment recorded underwriting income of $21 million compared to $12.0 million in 2023. This consisted of underwriting income of $11.9 million (96.0% combined ratio) and net services income of $9.1 million, compared to underwriting income of $1.5 million (99.6% combined ratio) and net services income of $10.5 million for the three months ended June 30, 2023. The improvement in underwriting results was primarily driven by increased profitability in North America A&H and growth in the Arcadian business, the company said. 

SiriusPoint also said it had reached a settlement with shareholder CMIG, in which it agreed to buy 9.1 million shares back for $125 million and to pay a total of $261.0 million upon the closing of the transactions contemplated by the settlement, which is expected to occur in the third quarter of 2024.

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