SiriusPoint’s Q3’24 CoR strengthens to 84.4% as reinsurance GPW rises

Bermuda-based insurer and reinsurer SiriusPoint has reported an improved combined ratio of 84.4% for the third quarter of 2024 as consolidated underwriting income increased from $73.8 million to $89 million, driven by increased favorable prior year loss reserve development.

For the third quarter of 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 due to lower than expected reported attritional losses, explains the firm.

Net income for the third quarter totalled just $5 million and was impacted by the completion of the firm’s previously announced CMIG shareholder transaction. However, underlying net income rose 69% to $89 million on the back of higher underwriting and investment income.

SiriusPoint also reports on its core results, which is the sum of its Reinsurance and Insurance & Services segments.

Core net income rose from $50 million in Q3 2023 to $69.5 million in Q3 2024, and includes underwriting income of $62.5 million with a combined ratio of 88.5% and net services income of $7 million, compared to underwriting income of $42.5 million with a combined ratio of 92.5% and net services income of $7.5 million a year earlier.

SiriusPoint attributes the strong core underwriting performance to favorable prior year loss reserve development and a more favorable commission ratio, partially offset by higher catastrophe losses.

For the third quarter, catastrophe losses, net of reinsurance and reinstatement premiums, were $10.6 million, including $10 million from hurricane Helene, compared with total losses of $6.7 million last year.

Losses incurred in the three month period included $29.7 million of favorable prior year loss reserve development, driven by the reasons highlighted above.

Regarding hurricane Milton, which struck Florida as a major storm soon after Helene, SiriusPoint estimates pre-tax losses, net of reinsurance and reinstatement premiums, of between $30 million and $40 million.

In terms of growth, gross premiums written (GPW) came down by 4.8% year-on-year to $690.5 million, as net premiums earned (NPE) fell 5% to $546.3 million, with declines attributed to the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a workers’ comp program and the planned transition of a cyber program to another carrier.

The dip in premium growth was somewhat offset by an 18.5% rise in GPW in the firm’s Reinsurance segment to $314.5 million, primarily driven by increases in Bermuda and New York property and international specialty, partially offset by lower premiums written in New York casualty.

Within the reinsurance arm, underwriting income increased from $36.9 million to $41.6 million with a combined ratio of 84.6%, driven by lower attritional losses and favorable commission ratio, partially offset by higher catastrophe losses.

In reinsurance, cat losses, net of reinsurance and reinstatement premiums, were $11.3 million for the third quarter, including $10 million from hurricane Helene.

Turning to the Insurance & Services segment, GPW declined 18.3% year-on-year to $376 million, driven by the movements highlighted above.

The segment produced income of $27.9 million for Q3 2024 compared with $13.3 million a year earlier, which consists of underwriting income of $20.9 million with a combined ratio of 92.4% and net services income of $7 million, compared with underwriting profit of $5.6 million with a combined ratio of 98.3% and net services income of $7.7 million in Q3 2023. The company highlights net favorable prior year loss reserve development of $13.1 million for the quarter as the driver of the better underwriting performance in this segment.

Alongside the solid underwriting performance, SiriusPoint has reported net investment income of $77.7 million and total investment result of $92.5 million for the third quarter of 2024.

Scott Egan, Chief Executive Officer, commented: “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.”

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