SiriusPoint profit knocked by shareholder settlement

Specialty re/insurer SiriusPoint’s third quarter earnings were knocked by the cost of a shareholder settlement, but the company still produced underlying net income of $89.1 million, the company said. 

The Bermuda-based re/insurer said it had net income in the quarter of $4.5 million compared to $57.5 million in the same period in 2023, but this was due to a previously announced loss on settlement with shareholder CM Bermuda (CMIG) of $117.3 million. 

Under that agreement, SiriusPoint will buy back $125 million of its share and redeem convertible preference shares for cash for a total of $261 million. The agreement reduces CM Bermuda’s holding in the company from 33% to 28%. 

The company had net premiums earned in the period of $568.9 million, down from $613 million while losses and loss expenses fell from $373 million to $317 million. 

Investment income rose to $77 from $75 million while net realised and unrealised gains rebounded from a $7 million loss to a $6.9 million gain. The company said its investment performance was running ahead of its guidance.   

“It has been another strong quarter of delivery for SiriusPoint, marking our eighth consecutive quarter of positive underwriting income,” said Scott Egan, chief executive officer. “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.”

Egan said the company was continuing to build its distribution partnerships with managing general agencies, and had six new partnerships in the quarter through its MGA Centre of Excellence, adding that fee income from our two consolidated accident and health 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.

Egan added: “We completed on an important two-part strategic transaction with CMIG in the quarter, deploying capital for the purchase and retirement of $125 million 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.”

Egan noted he had now been at SiriusPoint for two years, adding: “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.”

The company said its underwriting income rose to $89 million from $73.8 million, marking the company’s eight consecutive quarter of underwriting profits. 

It said the improvement was driven by increased favourable prior year loss reserve development and a more favourable commission ratio, with favourable prior year loss reserve development was $30.6 million from favourable development in property, mainly driven by reserve releases relating to favourable COVID-19 development trends, as well as favourable development in accident and health. 

SiriusPoint said it estimated Hurricane Milton losses, net of reinsurance and reinstatement premiums, of approximately $30 million to $40 million.

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