8-K
SiriusPoint Ltd (SPNT)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): February 24, 2022 (February 24, 2022)
SIRIUSPOINT LTD.
(Exact name of registrant as specified in its charter)
| Bermuda | 001-36052 | 98-1599372 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (I.R.S. Employer<br>Identification No.) |
Point Building
3 Waterloo Lane
Pembroke HM 08 Bermuda
(Address of principal executive offices and Zip Code)
Registrant’s telephone number, including area code: +1 441 542-3300
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | | --- | --- || ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | | --- | --- || ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | | --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Shares, $0.10 par value | SPNT | New York Stock Exchange |
| 8.00% Resettable Fixed Rate Preference Shares,<br> Series B, $0.10 par value, <br>$25.00 liquidation preference per share | SPNT PB | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
| Item 2.02 | Results of Operations and Financial Condition. |
|---|
On February 24, 2022, SiriusPoint Ltd. issued a press release reporting its financial results for the fourth quarter ended December 31, 2021 attached hereto as Exhibit 99.1.
The information contained in this Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, is being furnished pursuant to this Item 2.02. This information shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, or incorporated by reference into any filing under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
| Item 7.01 | Regulation FD Disclosure. |
|---|
On February 24, 2022, SiriusPoint Ltd. made available to investors its fourth quarter financial supplement attached hereto as Exhibit 99.2, and slide presentation attached hereto as Exhibit 99.3, which may be used from time to time by SiriusPoint Ltd. in presentations to investors.
The information contained in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2 and Exhibit 99.3 attached hereto, are being furnished pursuant to this Item 7.01. This information shall not deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section, or incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
|---|
(d) Exhibits
| Exhibit<br>No. | Description |
|---|---|
| 99.1 | Press Release dated February 24, 2022, announcing the earnings of SiriusPoint Ltd. for the Fourth Quarter Ended December 31, 2021. |
| 99.2 | Fourth Quarter Ended December 31, 2021 Financial Supplement. |
| 99.3 | SiriusPoint Ltd. Presentation to Investors, dated February 24, 2022. |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: February 24, 2022 | /s/ David W. Junius | |
|---|---|---|
| Name: | David W. Junius | |
| Title: | Chief Financial Officer |
Document
SiriusPoint Announces Fourth Quarter and Full Year 2021 Earnings Results
HAMILTON, Bermuda, February 24, 2022 - SiriusPoint Ltd. (“SiriusPoint” or the “Company”) (NYSE:SPNT) today announced results for its fourth quarter ended December 31, 2021.
Fourth Quarter 2021 Highlights
•Net loss of $140 million, or $0.88 per diluted common share
•Tangible diluted book value per share decreased $0.80, or 5.7%, from the third quarter of 2021 to $13.27
•Core loss of $7 million, which includes underwriting income of $35 million and Core combined ratio of 93.6%, offset by a Core net services loss of $41 million
•Core catastrophe losses were $24 million or 5 percentage points on the Core combined ratio
•Annualized return on average common equity of (23.7)%
•Net investment loss of $151 million, including (7.5)% return from our investment in the TP Enhanced Fund
Full Year 2021 Highlights
•Net income of $45 million, or $0.27 per diluted common share
•Tangible diluted book value per share decreased $3.44, or 20.6%, from December 31, 2020 to $13.27
•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
•Core catastrophe losses were $326 million or 19 percentage points on the Core combined ratio
•Return on average common equity of 2.3%
•Net investment income of $313 million, including 27.9% return from our investment in the TP Enhanced Fund
Sid Sankaran, Chairman and Chief Executive Officer, 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.
Our 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, 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.
We enjoyed superior returns from our investment portfolio in the first three quarters of the year. The fourth quarter results reflected poor performance in the broader equity markets, during which we completed a planned reallocation of $450 million from hedge fund exposure to cash and fixed income investments, with an additional $100 million reallocation in Q1 2022. We have amended the investment management agreement with Third Point LLC to facilitate the transformation of our investment portfolio from equity to fixed income that is in line with our risk appetite and the strategic direction of the company. 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.
Going into 2022, our focus remains on pursuing profitable and sustainable growth, and continuing to shift our business mix as we execute our Insurance & Services strategy. 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.”
Key Financial Metrics
The following table shows certain key financial metrics for the three and twelve months ended December 31, 2021 and 2020:
| Three months ended | Twelve months ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | ||||||||
| ( in millions, except for per share data and ratios) | |||||||||||
| Core underwriting income (loss) (1) | $ | (44.8) | $ | (173.6) | $ | (68.7) | |||||
| Core net services income (loss) (1) | $ | 0.3 | $ | 11.0 | $ | 0.4 | |||||
| Core loss (1) | $ | (44.5) | $ | (162.6) | $ | (68.3) | |||||
| Core combined ratio (1) | 93.6 | % | 128.2 | % | 110.0 | % | 111.9 | % | |||
| Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders | (23.7) | % | 35.9 | % | 2.3 | % | 9.6 | % | |||
| Basic book value per share (1) | $ | 16.88 | $ | 14.46 | $ | 16.88 | |||||
| Tangible basic book value per share (1) | $ | 16.88 | $ | 13.38 | $ | 16.88 | |||||
| Diluted book value per share (1) (2) | $ | 16.71 | $ | 14.33 | $ | 16.71 | |||||
| Tangible diluted book value per share (1) | $ | 16.71 | $ | 13.27 | $ | 16.71 |
All values are in US Dollars.
(1)Core underwriting income (loss), Core net services income (loss), Core loss and Core combined ratio are non-GAAP financial measures. See definitions in “Non-GAAP Financial Measures” and reconciliations in “Segment Reporting”. Basic book value per share, tangible basic book value per share, diluted book value per share and tangible diluted book value per share are non-GAAP financial measures. See definitions and reconciliations in “Non-GAAP Financial Measures”.
(2)In the year ended December 31, 2021, we changed the method for calculating the dilutive effect of restricted shares, restricted share units and options to calculate the dilutive impact in a manner similar to how dilution is calculated using the treasury stock method for earnings per share. All prior periods presented have been revised to conform to this new presentation. See “Non-GAAP Financial Measures” for additional information.
Fourth Quarter 2021 Summary
Reportable Segments
As a result of the acquisition of Sirius Group and the subsequent changes in strategy and new executive management team, SiriusPoint reports on two operating segments effective as of the fourth quarter of 2021: Reinsurance and Insurance & Services. Previously, we managed our business in four reportable segments: Specialty, Accident & Health (“A&H”), Property, and Runoff & Other. This change better reflects the management structure of SiriusPoint, provides greater transparency into the growing contribution from our managing general agents (“MGAs”) and other strategic partnerships, and reflects our decision to exit the runoff business. Where applicable, all prior periods presented have been revised to conform to this new presentation.
Core Results
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 important 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.
Effective January 1, 2021, the Company changed its accounting policy for assumed written premiums. Previously, the Company estimated ultimate premium written for the entire contract period and recorded this estimate at inception of the contract. The Company changed its accounting policy to recognize premiums written ratably over the term of the related policy or reinsurance treaty. The change in accounting policy had no impact on the previously reported net income (loss) or shareholders’ equity attributable to SiriusPoint common shareholders. Prior period segment results have been revised to conform to the current period presentation.
Three months ended December 31, 2021 and 2020
Core results for the three months ended December 31, 2021 were a loss of $6.6 million, compared to a loss of $44.5 million for the three months ended December 31, 2020. The loss for the three months ended December 31, 2021 consists of underwriting income of $34.7 million (93.6% combined ratio) and a net services loss of $41.3 million, compared to an underwriting loss of $44.8 million (128.2% combined ratio) and net services income of $0.3 million for the three months ended December 31, 2020. The change in results was primarily driven by moderate catastrophe loss activity in the fourth
quarter and favorable prior year loss development, partially offset by net investment losses from our strategic investments valued at fair value.
Catastrophe losses, net of reinsurance and reinstatement premiums, for the three months ended December 31, 2021 were $24.1 million, or 4.5 percentage points on the combined ratio, primarily related to the December tornadoes and other fourth quarter catastrophes. Catastrophe losses, net of reinsurance and reinstatement premiums, for the three months ended December 31, 2020 were $7.0 million, or 4.4 percentage points on the combined ratio, primarily related to Hurricane Delta and Hurricane Zeta.
Year ended December 31, 2021 and 2020
Core results for the year ended December 31, 2021 were a loss of $162.6 million for the year ended December 31, 2021, compared to a loss of $68.3 million for the year ended December 31, 2020. The loss for the year ended December 31, 2021 consists of an underwriting loss of $173.6 million (110.0% combined ratio) and net services income of $11.0 million, compared to an underwriting loss of $68.7 million (111.9% combined ratio) and net services income of $0.4 million for the year ended December 31, 2020. The change in results was primarily driven by catastrophe losses from the European floods and Hurricane Ida and a change in mix of business as a result of the acquisition of Sirius Group, partially offset by net favorable prior year loss reserve development.
Catastrophe losses, net of reinsurance and reinstatement premiums, for the year ended December 31, 2021 were $326.0 million, or 18.8 percentage points on the combined ratio, including $133 million for the European floods and $97 million for Hurricane Ida, based on our ground-up assessment of client exposed business to each event and a top-down estimate, based on industry loss for each event and an estimate of our market share, and other 2021 catastrophe events. Catastrophe losses, net of reinsurance and reinstatement premiums, for the year ended December 31, 2020 were $36.6 million, or 6.3 percentage points on the combined ratio, related to Hurricane Laura and other 2020 catastrophe events.
Reinsurance Segment
Three months ended December 31, 2021 and 2020
Reinsurance generated segment income of $30.9 million (91.2% combined ratio) for the three months ended December 31, 2021, compared to a segment loss of $46.0 million (129.4% combined ratio) for the three months ended December 31, 2020. The change in segment results was primarily driven by moderate catastrophe loss activity in the fourth quarter, a change in the mix of business as a result of the acquisition of Sirius Group and favorable prior year loss development of $11.9 million. The three months ended December 31, 2020 included net adverse prior year loss reserve development of $40.4 million as a result of increased casualty reserves in response to accumulated loss experience and cedent reserving increases.
Reinsurance gross premiums written were $418.8 million for the three months ended December 31, 2021, an increase of $275.3 million compared to the three months ended December 31, 2020, primarily driven by an increase in premiums of $305.4 million as a result of new premiums from the legacy Sirius Group companies.
Year ended December 31, 2021 and 2020
Reinsurance generated a segment loss of $196.6 million (116.3% combined ratio) for the year ended December 31, 2021, compared to a segment loss of $68.3 million (111.9% combined ratio) for the year ended December 31, 2020. The change in segment results was primarily driven by increased catastrophe losses from the European floods and Hurricane Ida, partially offset by favorable prior year loss development of $18.6 million.
Reinsurance gross premiums written were $1,350.4 million for the year ended December 31, 2021, an increase of $816.3 million compared to the year ended December 31, 2020, primarily driven by an increase in premiums of $928.7 million as a result of new premiums from the legacy Sirius Group companies from the date of acquisition. Excluding the premiums from the Sirius Group legacy companies, the decrease in gross premiums written was due to a reduction in property catastrophe excess reinsurance premiums to reduce catastrophic risk exposures in anticipation of the Sirius Group acquisition.
Insurance & Services Segment
Three months ended December 31, 2021 and 2020
Insurance & Services generated a segment loss of $37.5 million for the three months ended December 31, 2021, compared to segment income of $1.5 million for the three months ended December 31, 2020. The segment loss for the three months ended December 31, 2021 consists of underwriting income of $3.8 million (98.0% combined ratio) and a net services loss of $41.3
million, compared to underwriting income of $1.2 million (55.5% combined ratio) and net services income of $0.3 million for the three months ended December 31, 2020. The change in underwriting results was primarily driven by a change in mix of business from the growth in our strategic partnerships, and the net services loss was driven by investment losses from our strategic investments valued at fair value.
Insurance & Services gross premiums written were $269.9 million for the three months ended December 31, 2021, an increase of $249.0 million compared to the three months ended December 31, 2020, primarily driven by an increase in premiums of $168.2 million as a result of new premiums from the legacy Sirius Group companies and due to an increase in premiums written from our new MGA partnerships, in which we invest capital and expertise.
Year ended December 31, 2021 and 2020
Insurance & Services generated segment income of $34.0 million for the year ended December 31, 2021, compared to segment income of $nil for the year ended December 31, 2020. The segment income for the year ended December 31, 2021 consists of underwriting income of $23.3 million (95.5% combined ratio) and net services income of $10.7 million, compared to a underwriting loss of $0.4 million (105.6% combined ratio) and net services income of $0.4 million for the year ended December 31, 2020. The change in underwriting results was primarily driven by underwriting and net services income from the legacy Sirius Group companies from the date of acquisition and favorable prior year loss development of $13.5 million. The Accident & Health line continues to benefit from favorable loss ratio trends in its healthcare products due to the recognition of lower healthcare utilization rates that we attribute to the COVID-19 pandemic.
Insurance & Services gross premiums written were $897.9 million for the year ended December 31, 2021, an increase of $872.4 million compared to the year ended December 31, 2020, primarily driven by an increase in premiums of $620.8 million as a result of new premiums from the legacy Sirius Group companies from the date of acquisition, and due to an increase in premium written from our new MGA partnerships.
Investments
Total realized and unrealized investment gains (losses) and net investment income (loss) was $(151.2) million for the three months ended December 31, 2021, compared to $204.8 million for the three months ended December 31, 2020.
Investment results for the three months ended December 31, 2021 were primarily due to a net investment loss of $100.4 million from our investment in the TP Enhanced Fund, corresponding to a (7.5)% return. The return was primarily attributable to long event/fundamental equities, led by financials, and in particular fintech positions. In addition, we also recognized $38.2 million of losses on alternative investments within our other long term investment portfolio.
Investment results for the three months ended December 31, 2020 were primarily attributable to net investment income of $186.6 million from our investment in the TP Enhanced Fund, corresponding to a 21.5% return.
For the year ended December 31, 2021, net investment income from the TP Enhanced Fund totaled $298.5 million, corresponding to a 27.9% return. The return was primarily attributable to long event/fundamental equities, in particular from private positions that executed well-received initial public offerings.
Loss Portfolio Transfer with the Compre Group
On October 29, 2021, we closed a loss portfolio transfer transaction (“LPT”) with Pallas Reinsurance Company Ltd., a subsidiary of the Compre Group, an insurance and reinsurance legacy specialist. The LPT covers $362 million of our loss reserves for the subject business, including much of the legacy Sirius Group runoff portfolio, including asbestos and environmental lines, for a premium of $381 million. We recognized a net Corporate charge of $23 million, including $4 million of federal excise tax expense, in the fourth quarter of 2021 related to this transaction.
Our transaction with the Compre Group underscores the ongoing transformation of SiriusPoint, our focus on optimizing capital allocation and rebalancing towards insurance and higher margin and growth lines, and provides further certainty on SiriusPoint’s reserve position. Following the completion of the LPT, our net loss reserves from Runoff business were reduced by 48%. This transaction transfers the risk of the subject reserves developing adversely to Compre Group in exchange for the premium payment, and reduces statutory and rating agency capital charges on the subject reserves.
Acquisition of Sirius Group
Results for the three months ended March 31, 2021 were revised due to an increase in the total identifiable net assets acquired as part of the Sirius Group acquisition. This resulted in an additional bargain gain of $37.5 million recognized in other revenues in full year 2021 results. Net income available to SiriusPoint common shareholders increased by a corresponding
amount; however, there was no impact on total shareholders’ equity as the offsetting entry was recognized in additional paid-in capital. There was no impact from this adjustment to underwriting results, segments results or key performance indicators, including book value per share metrics, except for return on average common shareholders’ equity attributable to SiriusPoint common shareholders.
Conference Call Details
The Company will hold a conference call to discuss its fourth quarter 2021 results at 8:30 a.m. Eastern Time on February 25, 2022. The call will be webcast live 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 also be available by dialing 1-877-451-6152 (domestic) or 1-201-389-0879 (international). Participants should ask for the SiriusPoint Ltd. fourth quarter 2021 earnings call.
A replay of the live conference call will be available approximately two hours after the call. The replay will be available on the Company’s website at www.siriuspt.com under the “Investor Relations” section.
Safe Harbor Statement Regarding Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding optimizing capital allocation, rebalancing towards Insurance & Services and reducing our risk profile, creating a sustainable long-term franchise and future profitability. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking information presented in this press release is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this press release. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from the Company’s expectations due to a variety of known and unknown risks, uncertainties and other factors. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements are the following: our ability to execute on our strategic transformation, including changing the mix of business between insurance and reinsurance; the impact of the novel coronavirus (“COVID-19”) pandemic or other unpredictable catastrophic events including uncertainties with respect to current and future COVID-19 losses across many classes of insurance business and the amount of insurance losses that may ultimately be ceded to the reinsurance market, supply chain issues, labor shortages and related increased costs, changing interest rates, equity market volatility and ongoing business and financial market impacts of COVID-19; the costs, expenses and difficulties of the integration of the operations of Sirius International Insurance Group, Ltd. (“Sirius Group”); fluctuations in our results of operations; a downgrade or withdrawal of our financial ratings; inadequacy of loss and loss adjustment expense reserves, the lack of availability of capital, and periods characterized by excess underwriting capacity and unfavorable premium rates; the performance of financial markets, impact of inflation, and foreign currency fluctuations; legal restrictions on certain of SiriusPoint’s insurance and reinsurance subsidiaries’ ability to pay dividends and other distributions to SiriusPoint; our ability to compete successfully in the (re)insurance market and the effect of consolidation in the (re)insurance industry; technology breaches or failures, including those resulting from a malicious cyber-attack on us, our business partners or service providers; the effects of global climate change, including increased severity and frequency of weather-related natural disasters and catastrophes and increased coastal flooding in many geographic areas; our ability to retain key employees and the effects of potential labor disruptions due to COVID-19 or otherwise; the outcome of legal and regulatory proceedings, regulatory constraints on our business, including legal restrictions on certain of our insurance and reinsurance subsidiaries’ ability to pay dividends and other distributions to us, and losses from unfavorable outcomes from litigation and other legal proceedings; reduced returns or losses in SiriusPoint’s investment portfolio; our concentrated exposure in funds and accounts managed by Third Point LLC, our lack of control over Third Point LLC, our limited ability to withdraw our capital accounts and conflicts of interest among various members of Third Point Advisors LLC, TP Enhanced Fund, Third Point LLC and us; our potential exposure to U.S. federal income and withholding taxes and our significant deferred tax assets, which could become devalued if we do not generate future taxable income or applicable corporate tax rates are reduced; future strategic transactions such as acquisitions, dispositions, investments, mergers or joint ventures; and other risks and factors listed in the Company's most recent Annual Report on Form 10-K and subsequent periodic and current disclosures filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date made and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information or otherwise.
Non-GAAP Financial Measures and Other Financial Metrics
In presenting SiriusPoint’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). SiriusPoint’s management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of SiriusPoint’s financial performance, identifying trends in our results and providing meaningful period-to-period comparisons. Core underwriting income, Core net services income, Core income, and Core combined ratio are non-GAAP financial measures. Management believes it is important to review Core results as it better reflects how management views the business and reflects the Company’s decision to exit the runoff business. Basic book value per share, tangible basic book value per share, diluted book value per share and tangible diluted book value per share are also non-GAAP financial measures. SiriusPoint’s management believes that long-term growth in book value per share is an important measure of the Company’s financial performance because it allows management and investors to track over time the value created by the retention of earnings. In addition, SiriusPoint’s management believes this metric is useful to investors because it provides a basis for comparison with other companies in the industry that also report a similar measure. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial information in accordance with Regulation G.
About the Company
SiriusPoint is a global insurer and reinsurer providing solutions to clients and brokers in almost 150 countries. Bermuda-headquartered with offices in New York, London, Stockholm and other locations around the world, we are listed on the New York Stock Exchange (SPNT). We have licenses to write Property & Casualty and Accident & Health insurance and reinsurance globally. Our offering and distribution capabilities are strengthened by a portfolio of strategic partnerships with Managing General Agents and technology driven insurance services companies within our Insurance & Services division. With over $3 billion total capital, SiriusPoint’s operating companies have a financial strength rating of A- (Excellent) from AM Best, S&P and Fitch. For more information please visit www.siriuspt.com.
Contacts
Investor Relations
Clare Kerrigan - Corporate Communications and Investor Relations
clare.kerrigan@siriuspt.com
+1 441 542-3333
SIRIUSPOINT LTD.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2021 and December 31, 2020
(expressed in millions of U.S. dollars, except per share and share amounts)
| December 31,<br>2021 | December 31, 2020 | |||
|---|---|---|---|---|
| Assets | ||||
| Investments in related party investment funds, at fair value (cost - $441.9; 2020 - $891.9) | $ | 909.6 | $ | 1,055.6 |
| Debt securities, trading, at fair value (cost - $2,099.3; 2020 - $91.4) | 2,085.6 | 101.3 | ||
| Short-term investments, at fair value (cost - $1,076.0; 2020 - N/A) | 1,075.8 | — | ||
| Equity securities, trading, at fair value (cost - $4.5; 2020 - N/A) | 2.8 | — | ||
| Other long-term investments, at fair value (cost - $443.0; 2020 - $4.0) (includes related party investments at fair value of $258.2 (2020 - $4.0)) | 456.1 | 4.0 | ||
| Total investments | 4,529.9 | 1,160.9 | ||
| Cash and cash equivalents | 999.8 | 526.0 | ||
| Restricted cash and cash equivalents | 948.6 | 1,187.9 | ||
| Redemption receivable from related party investment fund | 250.0 | — | ||
| Due from brokers | 15.9 | 94.9 | ||
| Interest and dividends receivable | 8.3 | 0.9 | ||
| Insurance and reinsurance balances receivable, net | 1,708.2 | 441.9 | ||
| Deferred acquisition costs and value of business acquired, net | 218.8 | 68.6 | ||
| Unearned premiums ceded | 242.8 | 20.5 | ||
| Loss and loss adjustment expenses recoverable, net | 1,215.3 | 14.4 | ||
| Deferred tax asset | 182.0 | 0.4 | ||
| Intangible assets | 171.9 | — | ||
| Other assets | 126.8 | 18.8 | ||
| Total assets | $ | 10,618.3 | $ | 3,535.2 |
| Liabilities | ||||
| Loss and loss adjustment expense reserves | $ | 4,841.4 | $ | 1,310.1 |
| Unearned premium reserves | 1,198.4 | 284.8 | ||
| Reinsurance balances payable | 688.3 | 78.1 | ||
| Deposit liabilities | 150.7 | 153.0 | ||
| Securities sold, not yet purchased, at fair value | — | 12.0 | ||
| Due to brokers | 6.5 | — | ||
| Accounts payable, accrued expenses and other liabilities | 229.8 | 17.6 | ||
| Deferred tax liability | 95.4 | — | ||
| Liability-classified capital instruments | 87.8 | — | ||
| Debt | 816.7 | 114.3 | ||
| Total liabilities | 8,115.0 | 1,969.9 | ||
| Commitments and contingent liabilities | ||||
| Shareholders’ equity | ||||
| Series B preference shares (par value $0.10; authorized and issued: 8,000,000) | 200.0 | — | ||
| Common shares (issued and outstanding: 161,929,777; 2020 - 95,582,733) | 16.2 | 9.6 | ||
| Additional paid-in capital | 1,622.7 | 933.9 | ||
| Retained earnings | 665.0 | 620.4 | ||
| Accumulated other comprehensive loss | (0.2) | — | ||
| Shareholders’ equity attributable to SiriusPoint shareholders | 2,503.7 | 1,563.9 | ||
| Noncontrolling interests | (0.4) | 1.4 | ||
| Total shareholders’ equity | 2,503.3 | 1,565.3 | ||
| Total liabilities, noncontrolling interests and shareholders’ equity | $ | 10,618.3 | $ | 3,535.2 |
SIRIUSPOINT LTD.
CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
For the three and twelve months ended December 31, 2021 and 2020
(expressed in millions of U.S. dollars, except per share and share amounts)
| Three months ended | Twelve months ended | |||||||
|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||
| Revenues | ||||||||
| Net premiums earned | $ | 519.9 | $ | 181.9 | $ | 1,717.0 | $ | 610.8 |
| Net realized and unrealized investment gains (losses) | (60.6) | 14.7 | (16.9) | 69.2 | ||||
| Net realized and unrealized investment gains (losses) from related party investment funds | (97.2) | 186.6 | 304.0 | 195.0 | ||||
| Other net investment income | 6.6 | 3.5 | 25.4 | 14.7 | ||||
| Total realized and unrealized investment gains (losses) and net investment income (loss) | (151.2) | 204.8 | 312.5 | 278.9 | ||||
| Other revenues | 29.3 | — | 151.2 | — | ||||
| Total revenues | 398.0 | 386.7 | 2,180.7 | 889.7 | ||||
| Expenses | ||||||||
| Loss and loss adjustment expenses incurred, net | 351.4 | 177.9 | 1,326.5 | 465.3 | ||||
| Acquisition costs, net | 106.3 | 39.3 | 387.8 | 187.1 | ||||
| Other underwriting expenses | 38.2 | 9.0 | 158.8 | 30.1 | ||||
| Net corporate and other expenses | 72.1 | 11.6 | 266.6 | 41.9 | ||||
| Intangible asset amortization | 1.8 | — | 5.9 | — | ||||
| Interest expense | 9.6 | 2.1 | 34.0 | 8.2 | ||||
| Foreign exchange (gains) losses | (27.5) | 8.3 | (44.0) | 5.2 | ||||
| Total expenses | 551.9 | 248.2 | 2,135.6 | 737.8 | ||||
| Income (loss) before income tax (expense) benefit | (153.9) | 138.5 | 45.1 | 151.9 | ||||
| Income tax (expense) benefit | 17.1 | (3.7) | 10.7 | (8.1) | ||||
| Net income (loss) | (136.8) | 134.8 | 55.8 | 143.8 | ||||
| Net (income) loss attributable to noncontrolling interests | 0.5 | (0.4) | 2.3 | (0.3) | ||||
| Net income (loss) available to SiriusPoint | (136.3) | 134.4 | 58.1 | 143.5 | ||||
| Dividends on Series B preference shares | (4.0) | — | (13.5) | — | ||||
| Net income (loss) available to SiriusPoint common shareholders | $ | (140.3) | $ | 134.4 | $ | 44.6 | $ | 143.5 |
| Earnings (loss) per share available to SiriusPoint common shareholders | ||||||||
| Basic earnings (loss) per share available to SiriusPoint common shareholders | $ | (0.88) | $ | 1.43 | $ | 0.28 | $ | 1.54 |
| Diluted earnings (loss) per share available to SiriusPoint common shareholders | $ | (0.88) | $ | 1.43 | $ | 0.27 | $ | 1.53 |
| Weighted average number of common shares used in the determination of earnings (loss) per share | ||||||||
| Basic | 159,268,777 | 92,638,978 | 148,667,770 | 92,510,090 | ||||
| Diluted | 159,268,777 | 93,165,559 | 150,156,466 | 92,957,799 |
SIRIUSPOINT LTD.
SEGMENT REPORTING
| For the three months ended December 31, 2021 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reinsurance | Insurance & Services | Core | Eliminations (2) | Corporate | Segment Measure Reclass | Total | ||||||||||||
| Gross premiums written | $ | 418.8 | $ | 269.9 | $ | 688.7 | $ | — | $ | 2.1 | $ | — | $ | 690.8 | ||||
| Net premiums written | 351.1 | 184.3 | 535.4 | — | (24.5) | — | 510.9 | |||||||||||
| Net premiums earned | 348.1 | 188.1 | 536.2 | — | (16.3) | — | 519.9 | |||||||||||
| Loss and loss adjustment expenses incurred, net | 215.7 | 122.0 | 337.7 | (0.9) | 14.6 | — | 351.4 | |||||||||||
| Acquisition costs, net | 78.6 | 52.1 | 130.7 | (25.1) | 0.7 | — | 106.3 | |||||||||||
| Other underwriting expenses | 22.9 | 10.2 | 33.1 | — | 5.1 | — | 38.2 | |||||||||||
| Underwriting income (loss) | 30.9 | 3.8 | 34.7 | 26.0 | (36.7) | — | 24.0 | |||||||||||
| Services revenue | — | 43.8 | 43.8 | (30.0) | — | (13.8) | — | |||||||||||
| Services expenses | — | 39.5 | 39.5 | — | — | (39.5) | — | |||||||||||
| Net services fee income | — | 4.3 | 4.3 | (30.0) | — | 25.7 | — | |||||||||||
| Services noncontrolling loss | — | 0.5 | 0.5 | — | — | (0.5) | — | |||||||||||
| Net investment gains (losses) from strategic investments at fair value | — | (46.1) | (46.1) | — | — | 46.1 | — | |||||||||||
| Net services loss | — | (41.3) | (41.3) | (30.0) | — | 71.3 | — | |||||||||||
| Segment income (loss) | 30.9 | (37.5) | (6.6) | (4.0) | (36.7) | 71.3 | 24.0 | |||||||||||
| Net realized and unrealized investment losses | (14.5) | (46.1) | (60.6) | |||||||||||||||
| Net realized and unrealized investment losses from related party investment funds | (97.2) | — | (97.2) | |||||||||||||||
| Other net investment income | 6.6 | — | 6.6 | |||||||||||||||
| Other revenues | 15.5 | 13.8 | 29.3 | |||||||||||||||
| Net corporate and other expenses | (32.6) | (39.5) | (72.1) | |||||||||||||||
| Intangible asset amortization | (1.8) | — | (1.8) | |||||||||||||||
| Interest expense | (9.6) | — | (9.6) | |||||||||||||||
| Foreign exchange gains | 27.5 | — | 27.5 | |||||||||||||||
| Income (loss) before income tax benefit | $ | 30.9 | $ | (37.5) | (6.6) | (4.0) | (142.8) | (0.5) | (153.9) | |||||||||
| Income tax benefit | — | — | 17.1 | — | 17.1 | |||||||||||||
| Net loss | (6.6) | (4.0) | (125.7) | (0.5) | (136.8) | |||||||||||||
| Net loss attributable to noncontrolling interest | — | — | — | 0.5 | 0.5 | |||||||||||||
| Net loss attributable to SiriusPoint | $ | (6.6) | $ | (4.0) | $ | (125.7) | $ | — | $ | (136.3) | ||||||||
| Underwriting Ratios: (1) | ||||||||||||||||||
| Loss ratio | 62.0 | % | 64.9 | % | 63.0 | % | 67.6 | % | ||||||||||
| Acquisition cost ratio | 22.6 | % | 27.7 | % | 24.4 | % | 20.4 | % | ||||||||||
| Other underwriting expenses ratio | 6.6 | % | 5.4 | % | 6.2 | % | 7.3 | % | ||||||||||
| Combined ratio | 91.2 | % | 98.0 | % | 93.6 | % | 95.3 | % |
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
| For the three months ended December 31, 2020 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reinsurance | Insurance & Services | Core | Eliminations (2) | Corporate | Segment Measure Reclass | Total | ||||||||||||
| Gross premiums written | $ | 143.5 | $ | 20.9 | $ | 164.4 | $ | — | $ | 26.0 | $ | — | $ | 190.4 | ||||
| Net premiums written | 135.8 | 11.4 | 147.2 | — | 26.0 | — | 173.2 | |||||||||||
| Net premiums earned | 155.9 | 2.7 | 158.6 | — | 23.3 | — | 181.9 | |||||||||||
| Loss and loss adjustment expenses incurred, net | 158.3 | 0.8 | 159.1 | — | 18.8 | — | 177.9 | |||||||||||
| Acquisition costs, net | 36.7 | 0.6 | 37.3 | (0.1) | 2.1 | — | 39.3 | |||||||||||
| Other underwriting expenses | 6.9 | 0.1 | 7.0 | — | 2.0 | — | 9.0 | |||||||||||
| Underwriting income (loss) | (46.0) | 1.2 | (44.8) | 0.1 | 0.4 | — | (44.3) | |||||||||||
| Services revenue | — | 1.7 | 1.7 | (1.7) | — | — | — | |||||||||||
| Services expenses | — | 1.0 | 1.0 | — | — | (1.0) | — | |||||||||||
| Net services fee income | — | 0.7 | 0.7 | (1.7) | — | 1.0 | — | |||||||||||
| Services noncontrolling income | — | (0.4) | (0.4) | — | — | 0.4 | — | |||||||||||
| Net services income | — | 0.3 | 0.3 | (1.7) | — | 1.4 | — | |||||||||||
| Segment income (loss) | (46.0) | 1.5 | (44.5) | (1.6) | 0.4 | 1.4 | (44.3) | |||||||||||
| Net realized and unrealized investment gains | 14.7 | — | 14.7 | |||||||||||||||
| Net realized and unrealized investment gains from related party investment funds | 186.6 | — | 186.6 | |||||||||||||||
| Other net investment income | 3.5 | — | 3.5 | |||||||||||||||
| Net corporate and other expenses | (11.6) | — | (11.6) | |||||||||||||||
| Interest expense | (2.1) | — | (2.1) | |||||||||||||||
| Foreign exchange losses | (8.3) | — | (8.3) | |||||||||||||||
| Income (loss) before income tax expense | $ | (46.0) | $ | 1.5 | (44.5) | (1.6) | 183.2 | 1.4 | 138.5 | |||||||||
| Income tax expense | — | — | (3.7) | — | (3.7) | |||||||||||||
| Net income (loss) | (44.5) | (1.6) | 179.5 | 1.4 | 134.8 | |||||||||||||
| Net income attributable to noncontrolling interests | — | — | — | (0.4) | (0.4) | |||||||||||||
| Net income (loss) available to SiriusPoint | $ | (44.5) | $ | (1.6) | $ | 179.5 | $ | 1.0 | $ | 134.4 | ||||||||
| Underwriting Ratios: (1) | ||||||||||||||||||
| Loss ratio | 101.5 | % | 29.6 | % | 100.3 | % | 97.8 | % | ||||||||||
| Acquisition cost ratio | 23.5 | % | 22.2 | % | 23.5 | % | 21.6 | % | ||||||||||
| Other underwriting expenses ratio | 4.4 | % | 3.7 | % | 4.4 | % | 4.9 | % | ||||||||||
| Combined ratio | 129.4 | % | 55.5 | % | 128.2 | % | 124.3 | % |
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
| For the year ended December 31, 2021 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reinsurance | Insurance & Services | Core | Eliminations (2) | Corporate | Segment Measure Reclass | Total | ||||||||||||
| Gross premiums written | $ | 1,350.4 | $ | 897.9 | $ | 2,248.3 | $ | — | $ | (11.8) | $ | — | $ | 2,236.5 | ||||
| Net premiums written | 1,124.9 | 652.8 | 1,777.7 | — | (43.5) | — | 1,734.2 | |||||||||||
| Net premiums earned | 1,210.9 | 522.8 | 1,733.7 | — | (16.7) | — | 1,717.0 | |||||||||||
| Loss and loss adjustment expenses incurred, net | 999.6 | 320.6 | 1,320.2 | (2.6) | 8.9 | — | 1,326.5 | |||||||||||
| Acquisition costs, net | 302.7 | 149.7 | 452.4 | (67.6) | 3.0 | — | 387.8 | |||||||||||
| Other underwriting expenses | 105.5 | 29.2 | 134.7 | — | 24.1 | — | 158.8 | |||||||||||
| Underwriting income (loss) | (196.9) | 23.3 | (173.6) | 70.2 | (52.7) | — | (156.1) | |||||||||||
| Services revenue | — | 133.7 | 133.7 | (82.6) | — | (51.1) | — | |||||||||||
| Services expenses | — | 120.5 | 120.5 | — | — | (120.5) | — | |||||||||||
| Net services fee income | — | 13.2 | 13.2 | (82.6) | — | 69.4 | — | |||||||||||
| Services noncontrolling loss | — | 2.3 | 2.3 | — | — | (2.3) | — | |||||||||||
| Net investment gains (losses) from strategic investments at fair value | 0.3 | (4.8) | (4.5) | — | — | 4.5 | — | |||||||||||
| Net services income | 0.3 | 10.7 | 11.0 | (82.6) | — | 71.6 | — | |||||||||||
| Segment income (loss) | (196.6) | 34.0 | (162.6) | (12.4) | (52.7) | 71.6 | (156.1) | |||||||||||
| Net realized and unrealized investment losses | (12.4) | (4.5) | (16.9) | |||||||||||||||
| Net realized and unrealized investment gains from related party investment funds | 304.0 | — | 304.0 | |||||||||||||||
| Other net investment income | 25.4 | — | 25.4 | |||||||||||||||
| Other revenues | 100.1 | 51.1 | 151.2 | |||||||||||||||
| Net corporate and other expenses | (146.1) | (120.5) | (266.6) | |||||||||||||||
| Intangible asset amortization | (5.9) | — | (5.9) | |||||||||||||||
| Interest expense | (34.0) | — | (34.0) | |||||||||||||||
| Foreign exchange gains | 44.0 | — | 44.0 | |||||||||||||||
| Income (loss) before income tax benefit | $ | (196.6) | $ | 34.0 | (162.6) | (12.4) | 222.4 | (2.3) | 45.1 | |||||||||
| Income tax benefit | — | — | 10.7 | — | 10.7 | |||||||||||||
| Net income (loss) | (162.6) | (12.4) | 233.1 | (2.3) | 55.8 | |||||||||||||
| Net loss attributable to noncontrolling interests | — | — | — | 2.3 | 2.3 | |||||||||||||
| Net income (loss) available to SiriusPoint | $ | (162.6) | $ | (12.4) | $ | 233.1 | $ | — | $ | 58.1 | ||||||||
| Underwriting Ratios: (1) | ||||||||||||||||||
| Loss ratio | 82.6 | % | 61.3 | % | 76.1 | % | 77.3 | % | ||||||||||
| Acquisition cost ratio | 25.0 | % | 28.6 | % | 26.1 | % | 22.6 | % | ||||||||||
| Other underwriting expenses ratio | 8.7 | % | 5.6 | % | 7.8 | % | 9.2 | % | ||||||||||
| Combined ratio | 116.3 | % | 95.5 | % | 110.0 | % | 109.1 | % |
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
| For the year ended December 31, 2020 | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Reinsurance | Insurance & Services | Core | Eliminations (2) | Corporate | Segment Measure Reclass | Total | ||||||||||||
| Gross premiums written | $ | 534.1 | $ | 25.5 | $ | 559.6 | $ | — | $ | 28.9 | $ | — | $ | 588.5 | ||||
| Net premiums written | 497.3 | 16.0 | 513.3 | — | 28.9 | — | 542.2 | |||||||||||
| Net premiums earned | 575.6 | 7.1 | 582.7 | — | 28.1 | — | 610.8 | |||||||||||
| Loss and loss adjustment expenses incurred, net | 459.5 | 5.9 | 465.4 | — | (0.1) | — | 465.3 | |||||||||||
| Acquisition costs, net | 160.4 | 1.4 | 161.8 | (0.1) | 25.4 | — | 187.1 | |||||||||||
| Other underwriting expenses | 24.0 | 0.2 | 24.2 | — | 5.9 | — | 30.1 | |||||||||||
| Underwriting loss | (68.3) | (0.4) | (68.7) | 0.1 | (3.1) | — | (71.7) | |||||||||||
| Services revenue | — | 1.7 | 1.7 | (1.7) | — | — | — | |||||||||||
| Services expenses | — | 1.0 | 1.0 | — | — | (1.0) | — | |||||||||||
| Net services fee income | — | 0.7 | 0.7 | (1.7) | — | 1.0 | — | |||||||||||
| Services noncontrolling income | — | (0.3) | (0.3) | — | — | 0.3 | — | |||||||||||
| Net services income | — | 0.4 | 0.4 | (1.7) | — | 1.3 | — | |||||||||||
| Segment loss | (68.3) | — | (68.3) | (1.6) | (3.1) | 1.3 | (71.7) | |||||||||||
| Net realized and unrealized investment gains | 69.2 | — | 69.2 | |||||||||||||||
| Net realized and unrealized investment gains from related party investment funds | 195.0 | — | 195.0 | |||||||||||||||
| Other net investment income | 14.7 | — | 14.7 | |||||||||||||||
| Net corporate and other expenses | (40.9) | (1.0) | (41.9) | |||||||||||||||
| Interest expense | (8.2) | — | (8.2) | |||||||||||||||
| Foreign exchange losses | (5.2) | — | (5.2) | |||||||||||||||
| Income (loss) before income tax expense | $ | (68.3) | $ | — | (68.3) | (1.6) | 221.5 | 0.3 | 151.9 | |||||||||
| Income tax expense | — | — | (8.1) | — | (8.1) | |||||||||||||
| Net income (loss) | (68.3) | (1.6) | 213.4 | 0.3 | 143.8 | |||||||||||||
| Net income attributable to noncontrolling interests | — | — | — | (0.3) | (0.3) | |||||||||||||
| Net income (loss) available to SiriusPoint | $ | (68.3) | $ | (1.6) | $ | 213.4 | $ | — | $ | 143.5 | ||||||||
| Underwriting Ratios: (1) | ||||||||||||||||||
| Loss ratio | 79.8 | % | 83.1 | % | 79.9 | % | 76.2 | % | ||||||||||
| Acquisition cost ratio | 27.9 | % | 19.7 | % | 27.8 | % | 30.6 | % | ||||||||||
| Other underwriting expenses ratio | 4.2 | % | 2.8 | % | 4.2 | % | 4.9 | % | ||||||||||
| Combined ratio | 111.9 | % | 105.6 | % | 111.9 | % | 111.7 | % |
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
SIRIUSPOINT LTD.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATIONS & OTHER FINANCIAL MEASURES
Non-GAAP Financial Measures
Core Results
Collectively, the sum of the Company's two segments, Reinsurance and Insurance & Services, constitute "Core" results. Core underwriting income, Core net services income, Core income and Core combined ratio are non-GAAP financial measures. We believe it is important 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 underwriting income - calculated by subtracting loss and loss adjustment expenses incurred, net, acquisition costs, net, and other underwriting expenses from net premiums earned.
Core net services income - consists of services revenues which include commissions, brokerage and fee income related to consolidated MGAs, and other revenues, services expenses which include direct expenses related to consolidated MGAs, services non-controlling income which represent minority ownership interests in consolidated MGAs, and net investment gains from Strategic Investments at fair value which are net investment gains/losses from investment in our strategic partners. Net services income is a key indicator of the profitability of the Company's services provided, including investment returns on non-consolidated investment positions held.
Core income - consists of two components, core underwriting income and core net services income. Core income is a key measure of our segment performance.
Core combined ratio - calculated by dividing the sum of Core loss and loss adjustment expenses incurred, net, acquisition costs, net and other underwriting expenses by Core net premiums earned. This ratio is a key indicator of our underwriting profitability.
Basic Book Value Per Share, Tangible Basic Book Value Per Share, Diluted Book Value Per Share, Tangible Diluted Book Value Per Share
Basic book value per share, as presented, is a non-GAAP financial measure and is calculated by dividing common shareholders’ equity attributable to SiriusPoint common shareholders by the number of common shares outstanding, excluding the total number of issued unvested restricted shares, at period end. While restricted shares are outstanding, they are excluded from Basic book value per share because they are unvested.
Tangible basic book value per share, as presented, is a non-GAAP financial measure and is calculated by dividing tangible common shareholders’ equity attributable to SiriusPoint common shareholders by the number of common shares outstanding, excluding the total number of unvested restricted shares, at period end. Management believes that effects of intangible assets are not indicative of underlying underwriting results or trends and make book value comparisons to less acquisitive peer companies less meaningful. The Company's management believes tangible book value per share is useful to investors because it provides a more accurate measure of the realizable value of shareholder returns, excluding the impact of intangible assets.
Diluted book value per share and tangible diluted book value per share, as presented, are non-GAAP financial measures and are calculated similar to the treasury stock method. Under the treasury stock method, we assume that proceeds received from in-the-money options and/or warrants exercised are used to repurchase common shares in the market. The dilutive effect of restricted shares, restricted share units and options are calculated in a manner consistent with how dilution is calculated using the treasury stock method for earnings per share. We have also followed a similar approach for calculating dilution for warrants, Series A preference shares, Upside Rights and other potentially dilutive securities issued as part of our acquisition of Sirius Group. Management believes these measures are useful to investors because they measure the realizable value of shareholder returns in a manner consistent with how dilution is calculated using the treasury stock method for earnings per share. Management believes that effects of intangible assets are not indicative of underlying underwriting results or trends and make book value comparisons to less acquisitive peer companies less meaningful. Also, the tangible diluted book value per share is useful because it provides a more accurate measure of the realizable value of shareholder returns, excluding intangible assets.
The following table sets forth the of basic book value per share, tangible basic book value per share, diluted book value per share and tangible diluted book value per share as of December 31, 2021 and December 31, 2020:
| December 31,2021 | December 31, 2020 | ||
|---|---|---|---|
| Basic and diluted book value per share numerator: | ( in millions, except share and per share amounts) | ||
| Shareholders' equity attributable to SiriusPoint shareholders | $ | 1,563.9 | |
| Less: Series B preference shares | (200.0) | — | |
| Common shareholders’ equity attributable to SiriusPoint common shareholders - basic | 2,303.7 | 1,563.9 | |
| Plus: carrying value of Series A preference shares issued in merger | 20.4 | — | |
| Common shareholders’ equity attributable to SiriusPoint common shareholders - diluted | 2,324.1 | 1,563.9 | |
| Less: intangible assets | (171.9) | — | |
| Tangible common shareholders' equity attributable to SiriusPoint common shareholders - basic | 2,131.8 | 1,563.9 | |
| Tangible common shareholders' equity attributable to SiriusPoint common shareholders - diluted | $ | 1,563.9 | |
| Basic and diluted book value per share denominator: | |||
| Common shares outstanding | 161,929,777 | 95,582,733 | |
| Unvested restricted shares | (2,590,194) | (2,933,993) | |
| Basic book value per share denominator | 159,339,583 | 92,648,740 | |
| Effect of dilutive Series A preference shares issued in merger(1) | — | — | |
| Effect of dilutive warrants(2) | — | — | |
| Effect of dilutive stock options, restricted shares and restricted share units issued to directors and employees | 2,898,237 | 969,386 | |
| Diluted book value per share denominator | 162,237,820 | 93,618,126 | |
| Basic book value per share | $ | 16.88 | |
| Tangible basic book value per share | $ | 16.88 | |
| Diluted book value per share | $ | 16.71 | |
| Tangible diluted book value per share | $ | 16.71 |
All values are in US Dollars.
(1)As of December 31, 2021 there was no dilution as the conversion would result in the forfeiture of all of the Series A preference shares.
(2)As of December 31, 2021 and 2020, there was no dilution as a result of the Company’s share price being under the lowest exercise price for warrants.
Other Financial Measures
Annualized Return on Average Common Shareholders’ Equity Attributable to SiriusPoint Common Shareholders
Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders is calculated by dividing annualized net income (loss) available to SiriusPoint common shareholders for the period by the average common shareholders’ equity determined using the common shareholders' equity balances at the beginning and end of the period.
Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders for the three and twelve months ended December 31, 2021 and 2020 was calculated as follows:
| Three months ended | Twelve months ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | ||||||||
| ( in millions) | |||||||||||
| Net income (loss) available to SiriusPoint common shareholders | $ | 134.4 | $ | 44.6 | $ | 143.5 | |||||
| Common shareholders’ equity attributable to SiriusPoint common shareholders - beginning of period | $ | 1,427.6 | $ | 1,563.9 | $ | 1,414.1 | |||||
| Common shareholders’ equity attributable to SiriusPoint common shareholders - end of period | 2,303.7 | 1,563.9 | 2,303.7 | 1,563.9 | |||||||
| Average common shareholders’ equity attributable to SiriusPoint common shareholders | $ | 1,495.7 | $ | 1,933.8 | $ | 1,489.0 | |||||
| Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders | (23.7) | % | 35.9 | % | 2.3 | % | 9.6 | % |
All values are in US Dollars.
Document
SiriusPoint Ltd.
Financial Supplement
December 31, 2021
(UNAUDITED)
This financial supplement is for informational purposes only. It should be read in conjunction with documents filed with the Securities and Exchange Commission by SiriusPoint Ltd., including the Company’s Annual Report on Form 10-K.
| Point House | Clare Kerrigan - Corporate Communications and Investor Relations |
|---|---|
| 3 Waterloo Lane | Tel: (441) 542-3333 |
| Pembroke HM 08 | Email: investor.relations@siriuspt.com |
| Bermuda | Website: www.siriuspt.com |
SiriusPoint Ltd.
Basis of Presentation and Non-GAAP Financial Measures:
Unless the context otherwise indicates or requires, as used in this financial supplement references to “we,” “our,” “us,” the “Company,” and "SiriusPoint" refer to SiriusPoint Ltd. and its directly and indirectly owned subsidiaries, as a combined entity, except where otherwise stated or where it is clear that the terms mean only SiriusPoint Ltd. exclusive of its subsidiaries. We have made rounding adjustments to reach some of the figures included in this financial supplement and, unless otherwise indicated, percentages presented in this financial supplement are approximate.
In presenting SiriusPoint’s results, management has included financial measures that are not calculated under standards or rules that comprise accounting principles generally accepted in the United States (“GAAP”). SiriusPoint’s management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of SiriusPoint’s financial performance, identifying trends in our results and providing meaningful period-to-period comparisons. Core underwriting income, Core net services income, Core income, and Core combined ratio are non-GAAP financial measures. Management believes it is important to review Core results as it better reflects how management views the business and reflects the Company’s decision to exit the runoff business. Basic book value per share, tangible basic book value per share, diluted book value per share and tangible diluted book value per share are also non-GAAP financial measures. SiriusPoint’s management believes that long-term growth in book value per share is an important measure of the Company’s financial performance because it allows management and investors to track over time the value created by the retention of earnings. In addition, SiriusPoint’s management believes this metric is useful to investors because it provides a basis for comparison with other companies in the industry that also report a similar measure. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial information in accordance with Regulation G.
Safe Harbor Statement Regarding Forward-Looking Statements:
This Financial Supplement includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking information presented in this Financial Supplement is not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this Financial Supplement. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “plan,” “seek,” “comfortable with,” “will,” “expect,” “intend,” “estimate,” “anticipate,” “believe” or “continue” or the negative thereof or variations thereon or similar terminology. Actual events, results and outcomes may differ materially from the Company’s expectations due to a variety of known and unknown risks, uncertainties and other factors. Among the risks and uncertainties that could cause actual results to differ from those described in the forward-looking statements are the following: our ability to execute on our strategic transformation, including changing the mix of business between insurance and reinsurance; the impact of the novel coronavirus (“COVID-19”) pandemic or other unpredictable catastrophic events including uncertainties with respect to current and future COVID-19 losses across many classes of insurance business and the amount of insurance losses that may ultimately be ceded to the reinsurance market, supply chain issues, labor shortages and related increased costs, changing interest rates, equity market volatility and ongoing business and financial market impacts of COVID-19; the costs, expenses and difficulties of the integration of the operations of Sirius International Insurance Group, Ltd. (“Sirius Group”); fluctuations in our results of operations; a downgrade or withdrawal of our financial ratings; inadequacy of loss and loss adjustment expense reserves, the lack of availability of capital, and periods characterized by excess underwriting capacity and unfavorable premium rates; the performance of financial markets, impact of inflation, and foreign currency fluctuations; legal restrictions on certain of SiriusPoint’s insurance and reinsurance subsidiaries’ ability to pay dividends and other distributions to SiriusPoint; our ability to compete successfully in the (re)insurance market and the effect of consolidation in the (re)insurance industry; technology breaches or failures, including those resulting from a malicious cyber-attack on us, our business partners or service providers; the effects of global climate change, including increased severity and frequency of weather-related natural disasters and catastrophes and increased coastal flooding in many geographic areas; our ability to retain key employees and the effects of potential labor disruptions due to COVID-19 or otherwise; the outcome of legal and regulatory proceedings, regulatory constraints on our business, including legal restrictions on certain of our insurance and reinsurance subsidiaries’ ability to pay dividends and other distributions to us, and losses from unfavorable outcomes from litigation and other legal proceedings; reduced returns or losses in SiriusPoint’s investment portfolio; our concentrated exposure in funds and accounts managed by Third Point LLC, our lack of control over Third Point LLC, our limited ability to withdraw our capital accounts and conflicts of interest among various members of Third Point Advisors LLC, TP Enhanced Fund, Third Point LLC and us; our potential exposure to U.S. federal income and withholding taxes and our significant deferred tax assets, which could become devalued if we do not generate future taxable income or applicable corporate tax rates are reduced; future strategic transactions such as acquisitions, dispositions, investments, mergers or joint ventures; and other risks and factors listed in the Company's most recent Annual Report on Form 10-K and subsequent periodic and current disclosures filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the date made and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information or otherwise.
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SiriusPoint Ltd.
Table of Contents
| Key Performance Indicators | |
|---|---|
| Key Performance Indicators | 4 |
| Consolidated Financial Statements | |
| Consolidated Balance Sheets - by Quarter | 5 |
| Consolidated Statements of Income (Loss) | 6 |
| Consolidated Statements of Income (Loss) - by Quarter | 7 |
| Operating Segment Information | |
| Segment Reporting - Three months ended December 31, 2021 | 8 |
| Segment Reporting - Three months ended December 31, 2020 | 9 |
| Segment Reporting - Year ended December 31, 2021 | 10 |
| Segment Reporting - Year ended December 31, 2020 | 11 |
| Reinsurance Segment - by Quarter | 12 |
| Insurance & Services Segment - by Quarter | 13 |
| Core Results- by Quarter | 14 |
| Investments | |
| Investments - by Quarter | 15 |
| Other | |
| Earnings (loss) per Share - by Quarter | 16 |
| Annualized Return on Average Common Shareholders’ Equity - by Quarter | 17 |
| Basic and Diluted Book Value per Share - by Quarter | 18 |
Page 3 of 18
SiriusPoint Ltd.
Key Performance Indicators
December 31, 2021 and 2020
(expressed in millions of U.S. dollars, except per share data and ratios)
| Three months ended | Twelve months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||||||
| Core underwriting income (loss) (1) | $ | 34.7 | $ | (44.8) | $ | (173.6) | $ | (68.7) | ||||
| Core net services income (loss) (1) | $ | (41.3) | $ | 0.3 | $ | 11.0 | $ | 0.4 | ||||
| Core loss (1) | $ | (6.6) | $ | (44.5) | $ | (162.6) | $ | (68.3) | ||||
| Core combined ratio (1) | 93.6 | % | 128.2 | % | 110.0 | % | 111.9 | % | ||||
| Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders | (23.7) | % | 35.9 | % | 2.3 | % | 9.6 | % | ||||
| Basic book value per share (1) | $ | 14.46 | $ | 16.88 | $ | 14.46 | $ | 16.88 | ||||
| Tangible basic book value per share (1) | $ | 13.38 | $ | 16.88 | $ | 13.38 | $ | 16.88 | ||||
| Diluted book value per share (1) (2) | $ | 14.33 | $ | 16.71 | $ | 14.33 | $ | 16.71 | ||||
| Tangible diluted book value per share (1) | $ | 13.27 | $ | 16.71 | $ | 13.27 | $ | 16.71 |
(1)Core underwriting income (loss), Core net services income (loss), Core loss and Core combined ratio are non-GAAP financial measures. See reconciliations in “Segment Reporting”. Basic book value per share, tangible basic book value per share, diluted book value per share and tangible diluted book value per share are non-GAAP financial measures. See reconciliations in “Basic and Diluted Book Value per Share - by Quarter”.
(2)In the year ended December 31, 2021, we changed the method for calculating the dilutive effect of restricted shares, restricted share units and options to calculate the dilutive impact in a manner similar with how dilution is calculated using the treasury stock method for earnings per share. All prior periods presented have been revised to conform to this new presentation.
Page 4 of 18
SiriusPoint Ltd.
Consolidated Balance Sheets - by Quarter
(expressed in millions of U.S. dollars)
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Assets | ||||||||||
| Investments in related party investment funds, at fair value | $ | 909.6 | $ | 1,456.8 | $ | 1,254.4 | $ | 1,208.8 | $ | 1,055.6 |
| Debt securities, trading, at fair value | 2,085.6 | 2,100.9 | 2,009.3 | 2,940.3 | 101.3 | |||||
| Short-term investments, at fair value | 1,075.8 | 1,057.9 | 766.7 | — | — | |||||
| Equity securities, trading, at fair value | 2.8 | 3.4 | 5.0 | 5.9 | — | |||||
| Other long-term investments, at fair value | 456.1 | 454.5 | 463.7 | 473.1 | 4.0 | |||||
| Total investments | 4,529.9 | 5,073.5 | 4,499.1 | 4,628.1 | 1,160.9 | |||||
| Cash and cash equivalents | 999.8 | 701.2 | 1,032.6 | 932.4 | 526.0 | |||||
| Restricted cash and cash equivalents | 948.6 | 1,482.3 | 1,554.4 | 1,411.3 | 1,187.9 | |||||
| Redemption receivable from related party investment fund | 250.0 | — | — | — | — | |||||
| Due from brokers | 15.9 | 51.4 | 55.7 | 37.8 | 94.9 | |||||
| Interest and dividends receivable | 8.3 | 8.6 | 11.1 | 10.3 | 0.9 | |||||
| Insurance and reinsurance balances receivable, net | 1,708.2 | 1,621.4 | 1,515.3 | 1,613.8 | 441.9 | |||||
| Deferred acquisition costs and value of business acquired, net | 218.8 | 220.2 | 212.1 | 218.8 | 68.6 | |||||
| Unearned premiums ceded | 242.8 | 248.3 | 247.0 | 247.7 | 20.5 | |||||
| Loss and loss adjustment expenses recoverable, net | 1,215.3 | 843.5 | 516.6 | 492.6 | 14.4 | |||||
| Deferred tax asset | 182.0 | 194.2 | 216.3 | 256.5 | 0.4 | |||||
| Intangible assets | 171.9 | 173.7 | 176.7 | 174.2 | — | |||||
| Other assets | 126.8 | 97.0 | 153.7 | 146.2 | 18.8 | |||||
| Total assets | $ | 10,618.3 | $ | 10,715.3 | $ | 10,190.6 | $ | 10,169.7 | $ | 3,535.2 |
| Liabilities | ||||||||||
| Loss and loss adjustment expense reserves | $ | 4,841.4 | $ | 4,862.3 | $ | 4,232.3 | $ | 4,259.3 | $ | 1,310.1 |
| Unearned premium reserves | 1,198.4 | 1,215.4 | 1,238.1 | 1,244.8 | 284.8 | |||||
| Reinsurance balances payable | 688.3 | 596.4 | 526.3 | 528.8 | 78.1 | |||||
| Deposit liabilities | 150.7 | 154.0 | 148.6 | 150.7 | 153.0 | |||||
| Securities sold, not yet purchased, at fair value | — | 2.9 | 10.0 | 9.2 | 12.0 | |||||
| Due to brokers | 6.5 | 9.6 | 38.9 | 26.2 | — | |||||
| Accounts payable, accrued expenses and other liabilities | 229.8 | 154.1 | 164.1 | 154.4 | 17.6 | |||||
| Deferred tax liability | 95.4 | 152.2 | 190.2 | 223.0 | — | |||||
| Liability-classified capital instruments | 87.8 | 103.4 | 122.2 | 135.0 | — | |||||
| Debt | 816.7 | 827.0 | 836.5 | 829.0 | 114.3 | |||||
| Total liabilities | 8,115.0 | 8,077.3 | 7,507.2 | 7,560.4 | 1,969.9 | |||||
| Shareholders’ equity | ||||||||||
| Series B preference shares | 200.0 | 200.0 | 200.0 | 200.0 | — | |||||
| Common shares | 16.2 | 16.2 | 16.2 | 16.2 | 9.6 | |||||
| Additional paid-in capital | 1,622.7 | 1,616.8 | 1,609.1 | 1,602.1 | 933.9 | |||||
| Retained earnings | 665.0 | 805.3 | 853.3 | 788.8 | 620.4 | |||||
| Accumulated other comprehensive income (loss) | (0.2) | (0.3) | 1.5 | 0.4 | — | |||||
| Shareholders’ equity attributable to SiriusPoint shareholders | 2,503.7 | 2,638.0 | 2,680.1 | 2,607.5 | 1,563.9 | |||||
| Noncontrolling interests | (0.4) | — | 3.3 | 1.8 | 1.4 | |||||
| Total shareholders’ equity | 2,503.3 | 2,638.0 | 2,683.4 | 2,609.3 | 1,565.3 | |||||
| Total liabilities, noncontrolling interests and shareholders’ equity | $ | 10,618.3 | $ | 10,715.3 | $ | 10,190.6 | $ | 10,169.7 | $ | 3,535.2 |
Page 5 of 18
SiriusPoint Ltd.
Consolidated Statements of Income (Loss)
(expressed in millions of U.S. dollars, except share and per share data)
| Three months ended | Twelve months ended | |||||||
|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | |||||
| Revenues | ||||||||
| Net premiums earned | $ | 519.9 | $ | 181.9 | $ | 1,717.0 | $ | 610.8 |
| Net realized and unrealized investment gains (losses) | (60.6) | 14.7 | (16.9) | 69.2 | ||||
| Net realized and unrealized investment gains (losses) from related party investment funds | (97.2) | 186.6 | 304.0 | 195.0 | ||||
| Other net investment income | 6.6 | 3.5 | 25.4 | 14.7 | ||||
| Total realized and unrealized investment gains (losses) and net investment income (loss) | (151.2) | 204.8 | 312.5 | 278.9 | ||||
| Other revenues | 29.3 | — | 151.2 | — | ||||
| Total revenues | 398.0 | 386.7 | 2,180.7 | 889.7 | ||||
| Expenses | ||||||||
| Loss and loss adjustment expenses incurred, net | 351.4 | 177.9 | 1,326.5 | 465.3 | ||||
| Acquisition costs, net | 106.3 | 39.3 | 387.8 | 187.1 | ||||
| Other underwriting expenses | 38.2 | 9.0 | 158.8 | 30.1 | ||||
| Net corporate and other expenses | 72.1 | 11.6 | 266.6 | 41.9 | ||||
| Intangible asset amortization | 1.8 | — | 5.9 | — | ||||
| Interest expense | 9.6 | 2.1 | 34.0 | 8.2 | ||||
| Foreign exchange (gains) losses | (27.5) | 8.3 | (44.0) | 5.2 | ||||
| Total expenses | 551.9 | 248.2 | 2,135.6 | 737.8 | ||||
| Income (loss) before income tax (expense) benefit | (153.9) | 138.5 | 45.1 | 151.9 | ||||
| Income tax (expense) benefit | 17.1 | (3.7) | 10.7 | (8.1) | ||||
| Net income (loss) | (136.8) | 134.8 | 55.8 | 143.8 | ||||
| Net (income) loss attributable to noncontrolling interests | 0.5 | (0.4) | 2.3 | (0.3) | ||||
| Net income (loss) available to SiriusPoint | (136.3) | 134.4 | 58.1 | 143.5 | ||||
| Dividends on Series B preference shares | (4.0) | — | (13.5) | — | ||||
| Net income (loss) available to SiriusPoint common shareholders | $ | (140.3) | $ | 134.4 | $ | 44.6 | $ | 143.5 |
| Earnings (loss) per share available to SiriusPoint common shareholders | ||||||||
| Basic earnings (loss) per share available to SiriusPoint common shareholders (1) | $ | (0.88) | $ | 1.43 | $ | 0.28 | $ | 1.54 |
| Diluted earnings (loss) per share available to SiriusPoint common shareholders (1) | $ | (0.88) | $ | 1.43 | $ | 0.27 | $ | 1.53 |
| Weighted average number of common shares used in the determination of earnings (loss) per share | ||||||||
| Basic | 159,268,777 | 92,638,978 | 148,667,770 | 92,510,090 | ||||
| Diluted | 159,268,777 | 93,165,559 | 150,156,466 | 92,957,799 |
(1) Basic earnings (loss) per share is based on the weighted average number of common shares and participating securities outstanding during the period. The weighted average number of common shares excludes any dilutive effect of outstanding warrants, options and unvested restricted shares. Diluted earnings (loss) per share is based on the weighted average number of common shares and participating securities outstanding and includes any dilutive effects of warrants, options and unvested restricted shares under share plans and are determined using the treasury stock method. U.S. GAAP requires that participating securities be treated in the same manner as outstanding shares for earnings per share calculations. The Company treats certain of its unvested restricted shares as participating securities. In the event of a net loss, all participating securities, outstanding warrants, options and restricted shares are excluded from both basic and diluted loss per share since their inclusion would be anti-dilutive.
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SiriusPoint Ltd.
Consolidated Statements of Income (Loss) - by Quarter
(expressed in millions of U.S. dollars, except share and per share data)
| December 31,<br>2021 | September 30,<br><br>2021 (3) | June 30,<br><br>2021 (3) | March 31,<br><br>2021 (3) | December 31,<br>2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | (revised) (2) | |||||||||
| Net premiums earned | $ | 519.9 | $ | 499.6 | $ | 452.3 | $ | 245.2 | $ | 181.9 |
| Net realized and unrealized investment gains (losses) | (60.6) | (11.7) | 23.9 | 31.5 | 14.7 | |||||
| Net realized and unrealized investment gains (losses) from related party investment funds | (97.2) | 202.4 | 45.6 | 153.2 | 186.6 | |||||
| Other net investment income | 6.6 | 9.1 | 7.9 | 1.8 | 3.5 | |||||
| Total realized and unrealized investment gains (losses) and net investment income (loss) | (151.2) | 199.8 | 77.4 | 186.5 | 204.8 | |||||
| Other revenues | 29.3 | 33.2 | 31.8 | 56.9 | — | |||||
| Total revenues | 398.0 | 732.6 | 561.5 | 488.6 | 386.7 | |||||
| Expenses | ||||||||||
| Loss and loss adjustment expenses incurred, net | 351.4 | 577.3 | 250.9 | 146.9 | 177.9 | |||||
| Acquisition costs, net | 106.3 | 106.9 | 105.6 | 69.0 | 39.3 | |||||
| Other underwriting expenses | 38.2 | 53.3 | 46.5 | 20.8 | 9.0 | |||||
| Net corporate and other expenses | 72.1 | 59.9 | 55.7 | 78.9 | 11.6 | |||||
| Intangible asset amortization | 1.8 | 2.0 | 1.3 | 0.8 | — | |||||
| Interest expense | 9.6 | 9.7 | 9.8 | 4.9 | 2.1 | |||||
| Foreign exchange (gains) losses | (27.5) | (16.1) | 12.0 | (12.4) | 8.3 | |||||
| Total expenses | 551.9 | 793.0 | 481.8 | 308.9 | 248.2 | |||||
| Income (loss) before income tax (expense) benefit | (153.9) | (60.4) | 79.7 | 179.7 | 138.5 | |||||
| Income tax (expense) benefit | 17.1 | 13.0 | (9.6) | (9.8) | (3.7) | |||||
| Net income (loss) | (136.8) | (47.4) | 70.1 | 169.9 | 134.8 | |||||
| Net (income) loss attributable to noncontrolling interests | 0.5 | 3.4 | (1.6) | — | (0.4) | |||||
| Net income (loss) available to SiriusPoint | (136.3) | (44.0) | 68.5 | 169.9 | 134.4 | |||||
| Dividends on Series B preference shares | (4.0) | (4.0) | (4.0) | (1.5) | — | |||||
| Net income (loss) available to SiriusPoint common shareholders | $ | (140.3) | $ | (48.0) | $ | 64.5 | $ | 168.4 | $ | 134.4 |
| Earnings (loss) per share available to SiriusPoint common shareholders | ||||||||||
| Basic earnings (loss) per share available to SiriusPoint common shareholders (1) | $ | (0.88) | $ | (0.30) | $ | 0.37 | $ | 1.37 | $ | 1.43 |
| Diluted earnings (loss) per share available to SiriusPoint common shareholders (1) | $ | (0.88) | $ | (0.34) | $ | 0.37 | $ | 1.35 | $ | 1.43 |
| Weighted average number of common shares used in the determination of earnings (loss) per share | ||||||||||
| Basic | 159,268,777 | 159,225,772 | 158,832,629 | 116,760,760 | 92,638,978 | |||||
| Diluted | 159,268,777 | 160,240,888 | 160,894,216 | 118,146,341 | 93,165,559 |
(1) Basic earnings (loss) per share is based on the weighted average number of common shares and participating securities outstanding during the period. The weighted average number of common shares excludes any dilutive effect of outstanding warrants, options and unvested restricted shares. Diluted earnings (loss) per share is based on the weighted average number of common shares and participating securities outstanding and includes any dilutive effects of warrants, options and unvested restricted shares under share plans and are determined using the treasury stock method. U.S. GAAP requires that participating securities be treated in the same manner as outstanding shares for earnings per share calculations. The Company treats certain of its unvested restricted shares as participating securities. In the event of a net loss, all participating securities, outstanding warrants, options and restricted shares are excluded from both basic and diluted loss per share since their inclusion would be anti-dilutive.
(2) The three months ended March 31, 2021 were revised due to an increase in the total identifiable net assets acquired as part of the Sirius Group acquisition. This resulted in an additional bargain gain of $37.5 million recognized in other revenues for the three months ended March 31, 2021. Net income available to SiriusPoint common shareholders increased by a corresponding amount. There was no impact on total shareholders’ equity as the offsetting entry was recognized in additional paid-in capital. There was no impact from this adjustment to underwriting results, segments results or key performance indicators, including book value per share metrics, except for return on average common shareholders’ equity attributable to SiriusPoint common shareholders.
(3) As a result of the acquisition of Sirius Group and the subsequent changes in strategy and new executive management team, we now report on two operating segments effective as of the fourth quarter of 2021: Reinsurance and Insurance & Services. As a result of the re-segmentation, certain amounts in the prior period financial statements have been reclassified to conform to the presentation of the current period financial statements. These reclassifications had no impact on the previously reported net income (loss).
Page 7 of 18
SiriusPoint Ltd.
Segment Reporting - Three months ended December 31, 2021
(expressed in millions of U.S. dollars, except ratios)
| Reinsurance | Insurance & Services | Core | Eliminations (2) | Corporate | Segment Measure Reclass | Total | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross premiums written | $ | 418.8 | $ | 269.9 | $ | 688.7 | $ | — | $ | 2.1 | $ | — | $ | 690.8 | ||||
| Net premiums written | 351.1 | 184.3 | 535.4 | — | (24.5) | — | 510.9 | |||||||||||
| Net premiums earned | 348.1 | 188.1 | 536.2 | — | (16.3) | — | 519.9 | |||||||||||
| Loss and loss adjustment expenses incurred, net | 215.7 | 122.0 | 337.7 | (0.9) | 14.6 | — | 351.4 | |||||||||||
| Acquisition costs, net | 78.6 | 52.1 | 130.7 | (25.1) | 0.7 | — | 106.3 | |||||||||||
| Other underwriting expenses | 22.9 | 10.2 | 33.1 | — | 5.1 | — | 38.2 | |||||||||||
| Underwriting income (loss) | 30.9 | 3.8 | 34.7 | 26.0 | (36.7) | — | 24.0 | |||||||||||
| Services revenues | — | 43.8 | 43.8 | (30.0) | — | (13.8) | — | |||||||||||
| Services expenses | — | 39.5 | 39.5 | — | — | (39.5) | — | |||||||||||
| Net services fee income | — | 4.3 | 4.3 | (30.0) | — | 25.7 | — | |||||||||||
| Services noncontrolling loss | — | 0.5 | 0.5 | — | — | (0.5) | — | |||||||||||
| Net investment gains (losses) from Strategic Investments at fair value | — | (46.1) | (46.1) | — | — | 46.1 | — | |||||||||||
| Net services loss | — | (41.3) | (41.3) | (30.0) | — | 71.3 | — | |||||||||||
| Segment income (loss) | 30.9 | (37.5) | (6.6) | (4.0) | (36.7) | 71.3 | 24.0 | |||||||||||
| Net realized and unrealized investment losses | (14.5) | (46.1) | (60.6) | |||||||||||||||
| Net realized and unrealized investment losses from related party investment funds | (97.2) | — | (97.2) | |||||||||||||||
| Other net investment income | 6.6 | — | 6.6 | |||||||||||||||
| Other revenues | 15.5 | 13.8 | 29.3 | |||||||||||||||
| Net corporate and other expenses | (32.6) | (39.5) | (72.1) | |||||||||||||||
| Intangible asset amortization | (1.8) | — | (1.8) | |||||||||||||||
| Interest expense | (9.6) | — | (9.6) | |||||||||||||||
| Foreign exchange gains | 27.5 | — | 27.5 | |||||||||||||||
| Income (loss) before income tax benefit | $ | 30.9 | $ | (37.5) | (6.6) | (4.0) | (142.8) | (0.5) | (153.9) | |||||||||
| Income tax benefit | — | — | 17.1 | — | 17.1 | |||||||||||||
| Net loss | (6.6) | (4.0) | (125.7) | (0.5) | (136.8) | |||||||||||||
| Net loss attributable to noncontrolling interest | — | — | — | 0.5 | 0.5 | |||||||||||||
| Net loss attributable to SiriusPoint | $ | (6.6) | $ | (4.0) | $ | (125.7) | $ | — | $ | (136.3) | ||||||||
| Underwriting Ratios: (1) | ||||||||||||||||||
| Loss ratio | 62.0 | % | 64.9 | % | 63.0 | % | 67.6 | % | ||||||||||
| Acquisition cost ratio | 22.6 | % | 27.7 | % | 24.4 | % | 20.4 | % | ||||||||||
| Other underwriting expenses ratio | 6.6 | % | 5.4 | % | 6.2 | % | 7.3 | % | ||||||||||
| Combined ratio | 91.2 | % | 98.0 | % | 93.6 | % | 95.3 | % |
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
Page 8 of 18
SiriusPoint Ltd.
Segment Reporting - Three months ended December 31, 2020
(expressed in millions of U.S. dollars, except ratios)
| Reinsurance | Insurance & Services | Core | Eliminations (2) | Corporate | Segment Measure Reclass | Total | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross premiums written | $ | 143.5 | $ | 20.9 | $ | 164.4 | $ | — | $ | 26.0 | $ | — | $ | 190.4 | ||||
| Net premiums written | 135.8 | 11.4 | 147.2 | — | 26.0 | — | 173.2 | |||||||||||
| Net premiums earned | 155.9 | 2.7 | 158.6 | — | 23.3 | — | 181.9 | |||||||||||
| Loss and loss adjustment expenses incurred, net | 158.3 | 0.8 | 159.1 | — | 18.8 | — | 177.9 | |||||||||||
| Acquisition costs, net | 36.7 | 0.6 | 37.3 | (0.1) | 2.1 | — | 39.3 | |||||||||||
| Other underwriting expenses | 6.9 | 0.1 | 7.0 | — | 2.0 | — | 9.0 | |||||||||||
| Underwriting income (loss) | (46.0) | 1.2 | (44.8) | 0.1 | 0.4 | — | (44.3) | |||||||||||
| Services revenues | — | 1.7 | 1.7 | (1.7) | — | — | — | |||||||||||
| Services expenses | — | 1.0 | 1.0 | — | — | (1.0) | — | |||||||||||
| Net services fee income | — | 0.7 | 0.7 | (1.7) | — | 1.0 | — | |||||||||||
| Services noncontrolling income | — | (0.4) | (0.4) | — | — | 0.4 | — | |||||||||||
| Net services income | — | 0.3 | 0.3 | (1.7) | — | 1.4 | — | |||||||||||
| Segment income (loss) | (46.0) | 1.5 | (44.5) | (1.6) | 0.4 | 1.4 | (44.3) | |||||||||||
| Net realized and unrealized investment gains | 14.7 | — | 14.7 | |||||||||||||||
| Net realized and unrealized investment gains from related party investment funds | 186.6 | — | 186.6 | |||||||||||||||
| Other net investment income | 3.5 | — | 3.5 | |||||||||||||||
| Net corporate and other expenses | (11.6) | — | (11.6) | |||||||||||||||
| Interest expense | (2.1) | — | (2.1) | |||||||||||||||
| Foreign exchange losses | (8.3) | — | (8.3) | |||||||||||||||
| Income (loss) before income tax benefit | $ | (46.0) | $ | 1.5 | (44.5) | (1.6) | 183.2 | 1.4 | 138.5 | |||||||||
| Income tax expense | — | — | (3.7) | — | (3.7) | |||||||||||||
| Net income (loss) | (44.5) | (1.6) | 179.5 | 1.4 | 134.8 | |||||||||||||
| Net income available to noncontrolling interest | — | — | — | (0.4) | (0.4) | |||||||||||||
| Net income (loss) available to SiriusPoint | $ | (44.5) | $ | (1.6) | $ | 179.5 | $ | 1.0 | $ | 134.4 | ||||||||
| Underwriting Ratios: (1) | ||||||||||||||||||
| Loss ratio | 101.5 | % | 29.6 | % | 100.3 | % | 97.8 | % | ||||||||||
| Acquisition cost ratio | 23.5 | % | 22.2 | % | 23.5 | % | 21.6 | % | ||||||||||
| Other underwriting expenses ratio | 4.4 | % | 3.7 | % | 4.4 | % | 4.9 | % | ||||||||||
| Combined ratio | 129.4 | % | 55.5 | % | 128.2 | % | 124.3 | % |
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
Page 9 of 18
SiriusPoint Ltd.
Segment Reporting - Year ended December 31, 2021
(expressed in millions of U.S. dollars, except ratios)
| Reinsurance | Insurance & Services | Core | Eliminations (2) | Corporate | Segment Measure Reclass | Total | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross premiums written | $ | 1,350.4 | $ | 897.9 | $ | 2,248.3 | $ | — | $ | (11.8) | $ | — | $ | 2,236.5 | ||||
| Net premiums written | 1,124.9 | 652.8 | 1,777.7 | — | (43.5) | — | 1,734.2 | |||||||||||
| Net premiums earned | 1,210.9 | 522.8 | 1,733.7 | — | (16.7) | — | 1,717.0 | |||||||||||
| Loss and loss adjustment expenses incurred, net | 999.6 | 320.6 | 1,320.2 | (2.6) | 8.9 | — | 1,326.5 | |||||||||||
| Acquisition costs, net | 302.7 | 149.7 | 452.4 | (67.6) | 3.0 | — | 387.8 | |||||||||||
| Other underwriting expenses | 105.5 | 29.2 | 134.7 | — | 24.1 | — | 158.8 | |||||||||||
| Underwriting income (loss) | (196.9) | 23.3 | (173.6) | 70.2 | (52.7) | — | (156.1) | |||||||||||
| Services revenues | — | 133.7 | 133.7 | (82.6) | — | (51.1) | — | |||||||||||
| Services expenses | — | 120.5 | 120.5 | — | — | (120.5) | — | |||||||||||
| Net services fee income | — | 13.2 | 13.2 | (82.6) | — | 69.4 | — | |||||||||||
| Services noncontrolling loss | — | 2.3 | 2.3 | — | — | (2.3) | — | |||||||||||
| Net investment gains (losses) from Strategic Investments at fair value | 0.3 | (4.8) | (4.5) | — | — | 4.5 | — | |||||||||||
| Net services income | 0.3 | 10.7 | 11.0 | (82.6) | — | 71.6 | — | |||||||||||
| Segment income (loss) | (196.6) | 34.0 | (162.6) | (12.4) | (52.7) | 71.6 | (156.1) | |||||||||||
| Net realized and unrealized investment losses | (12.4) | (4.5) | (16.9) | |||||||||||||||
| Net realized and unrealized investment gains from related party investment funds | 304.0 | — | 304.0 | |||||||||||||||
| Other net investment income | 25.4 | — | 25.4 | |||||||||||||||
| Other revenues | 100.1 | 51.1 | 151.2 | |||||||||||||||
| Net corporate and other expenses | (146.1) | (120.5) | (266.6) | |||||||||||||||
| Intangible asset amortization | (5.9) | — | (5.9) | |||||||||||||||
| Interest expense | (34.0) | — | (34.0) | |||||||||||||||
| Foreign exchange gains | 44.0 | — | 44.0 | |||||||||||||||
| Income (loss) before income tax benefit | $ | (196.6) | $ | 34.0 | (162.6) | (12.4) | 222.4 | (2.3) | 45.1 | |||||||||
| Income tax benefit | — | — | 10.7 | — | 10.7 | |||||||||||||
| Net income (loss) | (162.6) | (12.4) | 233.1 | (2.3) | 55.8 | |||||||||||||
| Net loss attributable to noncontrolling interest | — | — | — | 2.3 | 2.3 | |||||||||||||
| Net income (loss) available to SiriusPoint | $ | (162.6) | $ | (12.4) | $ | 233.1 | $ | — | $ | 58.1 | ||||||||
| Underwriting Ratios: (1) | ||||||||||||||||||
| Loss ratio | 82.6 | % | 61.3 | % | 76.1 | % | 77.3 | % | ||||||||||
| Acquisition cost ratio | 25.0 | % | 28.6 | % | 26.1 | % | 22.6 | % | ||||||||||
| Other underwriting expenses ratio | 8.7 | % | 5.6 | % | 7.8 | % | 9.2 | % | ||||||||||
| Combined ratio | 116.3 | % | 95.5 | % | 110.0 | % | 109.1 | % |
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
Page 10 of 18
SiriusPoint Ltd.
Segment Reporting - Year ended December 31, 2020
(expressed in millions of U.S. dollars, except ratios)
| Reinsurance | Insurance & Services | Core | Eliminations (2) | Corporate | Segment Measure Reclass | Total | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross premiums written | $ | 534.1 | $ | 25.5 | $ | 559.6 | $ | — | $ | 28.9 | $ | — | $ | 588.5 | ||||
| Net premiums written | 497.3 | 16.0 | 513.3 | — | 28.9 | — | 542.2 | |||||||||||
| Net premiums earned | 575.6 | 7.1 | 582.7 | — | 28.1 | — | 610.8 | |||||||||||
| Loss and loss adjustment expenses incurred, net | 459.5 | 5.9 | 465.4 | — | (0.1) | — | 465.3 | |||||||||||
| Acquisition costs, net | 160.4 | 1.4 | 161.8 | (0.1) | 25.4 | — | 187.1 | |||||||||||
| Other underwriting expenses | 24.0 | 0.2 | 24.2 | — | 5.9 | — | 30.1 | |||||||||||
| Underwriting loss | (68.3) | (0.4) | (68.7) | 0.1 | (3.1) | — | (71.7) | |||||||||||
| Services revenues | — | 1.7 | 1.7 | (1.7) | — | — | — | |||||||||||
| Services expenses | — | 1.0 | 1.0 | — | — | (1.0) | — | |||||||||||
| Net services fee income | — | 0.7 | 0.7 | (1.7) | — | 1.0 | — | |||||||||||
| Services noncontrolling income | — | (0.3) | (0.3) | — | — | 0.3 | — | |||||||||||
| Net services income | — | 0.4 | 0.4 | (1.7) | — | 1.3 | — | |||||||||||
| Segment loss | (68.3) | — | (68.3) | (1.6) | (3.1) | 1.3 | (71.7) | |||||||||||
| Net realized and unrealized investment gains | 69.2 | — | 69.2 | |||||||||||||||
| Net realized and unrealized investment gains from related party investment funds | 195.0 | — | 195.0 | |||||||||||||||
| Other net investment income | 14.7 | — | 14.7 | |||||||||||||||
| Net corporate and other expenses | (40.9) | (1.0) | (41.9) | |||||||||||||||
| Interest expense | (8.2) | — | (8.2) | |||||||||||||||
| Foreign exchange losses | (5.2) | — | (5.2) | |||||||||||||||
| Income (loss) before income tax expense | $ | (68.3) | $ | — | (68.3) | (1.6) | 221.5 | 0.3 | 151.9 | |||||||||
| Income tax expense | — | — | (8.1) | — | (8.1) | |||||||||||||
| Net income (loss) | (68.3) | (1.6) | 213.4 | 0.3 | 143.8 | |||||||||||||
| Net income available to noncontrolling interest | — | — | — | (0.3) | (0.3) | |||||||||||||
| Net income (loss) available to SiriusPoint | $ | (68.3) | $ | (1.6) | $ | 213.4 | $ | — | $ | 143.5 | ||||||||
| Underwriting Ratios: (1) | ||||||||||||||||||
| Loss ratio | 79.8 | % | 83.1 | % | 79.9 | % | 76.2 | % | ||||||||||
| Acquisition cost ratio | 27.9 | % | 19.7 | % | 27.8 | % | 30.6 | % | ||||||||||
| Other underwriting expenses ratio | 4.2 | % | 2.8 | % | 4.2 | % | 4.9 | % | ||||||||||
| Combined ratio | 111.9 | % | 105.6 | % | 111.9 | % | 111.7 | % |
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
Page 11 of 18
SiriusPoint Ltd.
Reinsurance Segment - by Quarter (1)
(expressed in millions of U.S. dollars, except ratios)
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | |||||||||||||||
| Gross premiums written | $ | 418.8 | $ | 395.3 | $ | 377.6 | $ | 158.7 | $ | 143.5 | |||||
| Net premiums written | 351.1 | 289.6 | 322.7 | 161.5 | 135.8 | ||||||||||
| Net premiums earned | 348.1 | 326.4 | 336.6 | 199.8 | 155.9 | ||||||||||
| Expenses | |||||||||||||||
| Loss and loss adjustment expenses incurred, net | 215.7 | 471.5 | 204.2 | 108.2 | 158.3 | ||||||||||
| Acquisition costs, net | 78.6 | 85.4 | 79.8 | 58.9 | 36.7 | ||||||||||
| Other underwriting expenses | 22.9 | 32.1 | 34.4 | 16.1 | 6.9 | ||||||||||
| Underwriting income (loss) | 30.9 | (262.6) | 18.2 | 16.6 | (46.0) | ||||||||||
| Net investment gains (losses) from Strategic Investments at fair value | — | — | 0.4 | (0.1) | — | ||||||||||
| Segment income (loss) | $ | 30.9 | $ | (262.6) | $ | 18.6 | $ | 16.5 | $ | (46.0) | |||||
| Underwriting Ratios (2): | |||||||||||||||
| Loss ratio | 62.0 | % | 144.5 | % | 60.7 | % | 54.2 | % | 101.5 | % | |||||
| Acquisition cost ratio | 22.6 | % | 26.2 | % | 23.7 | % | 29.5 | % | 23.5 | % | |||||
| Other underwriting expense ratio | 6.6 | % | 9.8 | % | 10.2 | % | 8.1 | % | 4.4 | % | |||||
| Combined ratio | 91.2 | % | 180.5 | % | 94.6 | % | 91.8 | % | 129.4 | % | |||||
| Catastrophe losses, net of reinsurance and reinstatement premiums | $ | 22.6 | $ | 283.5 | $ | 12.7 | $ | 5.7 | $ | 7.0 | |||||
| (Favorable) adverse prior year loss reserve development | $ | (11.9) | $ | (5.7) | $ | (4.0) | $ | 3.0 | $ | 40.4 |
(1)With recent changes in strategy and the new executive management team following the acquisition of Sirius Group, the Company modified its operating segments. Prior period segment results have been adjusted to conform to the current period presentation.
(2)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
Page 12 of 18
SiriusPoint Ltd.
Insurance & Services Segment - by Quarter (1)
(expressed in millions of U.S. dollars, except ratios)
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | |||||||||||||||
| Gross premiums written | $ | 269.9 | $ | 240.6 | $ | 196.5 | $ | 190.9 | $ | 20.9 | |||||
| Net premiums written | 184.3 | 183.9 | 145.0 | 139.6 | 11.4 | ||||||||||
| Net premiums earned | 188.1 | 160.6 | 131.4 | 42.7 | 2.7 | ||||||||||
| Expenses | |||||||||||||||
| Loss and loss adjustment expenses incurred, net | 122.0 | 91.0 | 79.0 | 28.6 | 0.8 | ||||||||||
| Acquisition costs, net | 52.1 | 41.8 | 41.6 | 14.2 | 0.6 | ||||||||||
| Other underwriting expenses | 10.2 | 9.8 | 7.9 | 1.3 | 0.1 | ||||||||||
| Underwriting income (loss) | 3.8 | 18.0 | 2.9 | (1.4) | 1.2 | ||||||||||
| Services revenues | 43.8 | 37.8 | 33.9 | 18.2 | 1.7 | ||||||||||
| Services expenses | 39.5 | 40.4 | 30.0 | 10.6 | 1.0 | ||||||||||
| Net services fee income (loss) | 4.3 | (2.6) | 3.9 | 7.6 | 0.7 | ||||||||||
| Services noncontrolling (income) loss | 0.5 | 3.4 | (1.6) | — | (0.4) | ||||||||||
| Net investment gains (losses) from Strategic Investments at fair value | (46.1) | — | 6.1 | 35.2 | — | ||||||||||
| Net services income (loss) | (41.3) | 0.8 | 8.4 | 42.8 | 0.3 | ||||||||||
| Segment income (loss) | $ | (37.5) | $ | 18.8 | $ | 11.3 | $ | 41.4 | $ | 1.5 | |||||
| Underwriting Ratios (2): | |||||||||||||||
| Loss ratio | 64.9 | % | 56.7 | % | 60.1 | % | 67.0 | % | 29.6 | % | |||||
| Acquisition cost ratio | 27.7 | % | 26.0 | % | 31.7 | % | 33.3 | % | 22.2 | % | |||||
| Other underwriting expense ratio | 5.4 | % | 6.1 | % | 6.0 | % | 3.0 | % | 3.7 | % | |||||
| Combined ratio | 98.0 | % | 88.8 | % | 97.8 | % | 103.3 | % | 55.5 | % | |||||
| (Favorable) adverse prior year loss reserve development | $ | (3.8) | $ | (8.2) | $ | (2.4) | $ | 0.9 | $ | (0.8) |
(1)With recent changes in strategy and the new executive management team following the acquisition of Sirius Group, the Company modified its operating segments. Prior period segment results have been adjusted to conform to the current period presentation.
(2)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
Page 13 of 18
SiriusPoint Ltd.
Core Results - by Quarter (1)
(expressed in millions of U.S. dollars, except ratios)
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenues | |||||||||||||||
| Gross premiums written | $ | 688.7 | $ | 635.9 | $ | 574.1 | $ | 349.6 | $ | 164.4 | |||||
| Net premiums written | 535.4 | 473.5 | 467.7 | 301.1 | 147.2 | ||||||||||
| Net premiums earned | 536.2 | 487.0 | 468.0 | 242.5 | 158.6 | ||||||||||
| Expenses | |||||||||||||||
| Loss and loss adjustment expenses incurred, net | 337.7 | 562.5 | 283.2 | 136.8 | 159.1 | ||||||||||
| Acquisition costs, net | 130.7 | 127.2 | 121.4 | 73.1 | 37.3 | ||||||||||
| Other underwriting expenses | 33.1 | 41.9 | 42.3 | 17.4 | 7.0 | ||||||||||
| Underwriting income (loss) | 34.7 | (244.6) | 21.1 | 15.2 | (44.8) | ||||||||||
| Services revenues | 43.8 | 37.8 | 33.9 | 18.2 | 1.7 | ||||||||||
| Services expenses | 39.5 | 40.4 | 30.0 | 10.6 | 1.0 | ||||||||||
| Net services fee income (loss) | 4.3 | (2.6) | 3.9 | 7.6 | 0.7 | ||||||||||
| Services noncontrolling (income) loss | 0.5 | 3.4 | (1.6) | — | (0.4) | ||||||||||
| Net investment gains (losses) from Strategic Investments at fair value | (46.1) | — | 6.5 | 35.1 | — | ||||||||||
| Net services income (loss) | (41.3) | 0.8 | 8.8 | 42.7 | 0.3 | ||||||||||
| Core income (loss) | $ | (6.6) | $ | (243.8) | $ | 29.9 | $ | 57.9 | $ | (44.5) | |||||
| Underwriting Ratios (2): | |||||||||||||||
| Loss ratio | 63.0 | % | 115.5 | % | 60.5 | % | 56.4 | % | 100.3 | % | |||||
| Acquisition cost ratio | 24.4 | % | 26.1 | % | 25.9 | % | 30.1 | % | 23.5 | % | |||||
| Other underwriting expense ratio | 6.2 | % | 8.6 | % | 9.0 | % | 7.2 | % | 4.4 | % | |||||
| Combined ratio | 93.6 | % | 150.2 | % | 95.4 | % | 93.7 | % | 128.2 | % | |||||
| Catastrophe losses, net of reinsurance and reinstatement premiums | $ | 24.1 | $ | 283.5 | $ | 12.7 | $ | 5.7 | $ | 7.0 | |||||
| (Favorable) adverse prior year loss reserve development | $ | (15.7) | $ | (13.9) | $ | (6.4) | $ | 3.9 | $ | 39.6 |
(1)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. We believe it is important 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.
(2)Underwriting ratios are calculated by dividing the related expense by net premiums earned.
Page 14 of 18
SiriusPoint Ltd.
Investments - by Quarter
(expressed in millions of U.S. dollars)
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair Value | % | Fair Value | % | Fair Value | % | Fair Value | % | Fair Value | % | |||||||||||
| Asset-backed securities | $ | 513.1 | 11.3 | % | $ | 494.6 | 9.7 | % | $ | 543.6 | 12.1 | % | $ | 594.6 | 12.8 | % | $ | 1.3 | 0.1 | % |
| Residential mortgage-backed securities | 301.9 | 6.7 | % | 349.2 | 6.9 | % | 367.8 | 8.2 | % | 392.2 | 8.5 | % | 8.7 | 0.7 | % | |||||
| Commercial mortgage-backed securities | 147.3 | 3.2 | % | 121.9 | 2.4 | % | 123.6 | 2.7 | % | 123.0 | 2.6 | % | — | — | % | |||||
| Bank debt | — | — | % | — | — | % | — | — | % | — | — | % | 0.4 | — | % | |||||
| Corporate debt securities | 602.6 | 13.3 | % | 608.2 | 12.0 | % | 595.0 | 13.2 | % | 564.6 | 12.2 | % | 37.7 | 3.3 | % | |||||
| U.S. government and government agency | 385.4 | 8.5 | % | 368.9 | 7.3 | % | 264.3 | 5.9 | % | 1,140.9 | 24.7 | % | 53.2 | 4.6 | % | |||||
| Non-U.S. government and government agency | 132.3 | 2.9 | % | 134.8 | 2.7 | % | 101.5 | 2.3 | % | 121.3 | 2.6 | % | — | — | % | |||||
| U.S. states, municipalities and political subdivision | 0.2 | — | % | 0.5 | — | % | 0.7 | — | % | 0.9 | — | % | — | — | % | |||||
| Preferred stocks | 2.8 | 0.1 | % | 22.8 | 0.4 | % | 12.8 | 0.3 | % | 2.8 | 0.1 | % | — | — | % | |||||
| Total debt securities | 2,085.6 | 46.0 | % | 2,100.9 | 41.4 | % | 2,009.3 | 44.7 | % | 2,940.3 | 63.5 | % | 101.3 | 8.7 | % | |||||
| Fixed income mutual funds | 2.1 | — | % | 1.9 | — | % | 1.9 | — | % | 1.8 | — | % | — | — | % | |||||
| Common stocks | 0.7 | — | % | 1.5 | — | % | 3.1 | 0.1 | % | 4.1 | 0.1 | % | — | — | % | |||||
| Total equity securities | 2.8 | — | % | 3.4 | — | % | 5.0 | 0.1 | % | 5.9 | 0.1 | % | — | — | % | |||||
| Short-term investments | 1,075.8 | 23.7 | % | 1,057.9 | 20.9 | % | 766.7 | 17.0 | % | — | — | % | — | — | % | |||||
| Other long-term investments | 336.9 | 7.4 | % | 328.3 | 6.5 | % | 322.5 | 7.2 | % | 311.2 | 6.8 | % | 4.0 | 0.3 | % | |||||
| Investments in funds valued at net asset value | 1,028.8 | 22.7 | % | 1,583.0 | 31.2 | % | 1,395.6 | 31.0 | % | 1,370.7 | 29.6 | % | 1,055.6 | 91.0 | % | |||||
| Total investments | $ | 4,529.9 | 100.0 | % | $ | 5,073.5 | 100.0 | % | $ | 4,499.1 | 100.0 | % | $ | 4,628.1 | 100.0 | % | $ | 1,160.9 | 100.0 | % |
Page 15 of 18
SiriusPoint Ltd.
Earnings (loss) per Share - by Quarter
(expressed in millions of U.S. dollars, except share and per share data)
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Weighted-average number of common shares outstanding: | revised (3) | |||||||||
| Basic number of common shares outstanding | 159,268,777 | 159,225,772 | 158,832,629 | 116,760,760 | 92,638,978 | |||||
| Dilutive effect of options (1) | — | — | 313,758 | 184,470 | — | |||||
| Dilutive effect of warrants (1) | — | — | 160,075 | 51,650 | — | |||||
| Dilutive effect of restricted share units (1) | — | — | 1,587,754 | 1,149,461 | 526,581 | |||||
| Dilutive effect of Series A preference shares | — | 1,015,116 | — | — | — | |||||
| Diluted number of common shares outstanding | 159,268,777 | 160,240,888 | 160,894,216 | 118,146,341 | 93,165,559 | |||||
| Basic earnings per common share: | ||||||||||
| Net income (loss) available to SiriusPoint common shareholders | $ | (140.3) | $ | (48.0) | $ | 64.5 | $ | 168.4 | $ | 134.4 |
| Net income allocated to SiriusPoint participating common shareholders | — | — | (5.4) | (6.5) | (1.6) | |||||
| Net income (loss) allocated to SiriusPoint common shareholders | $ | (140.3) | $ | (48.0) | $ | 59.1 | $ | 161.9 | $ | 132.8 |
| Basic earnings (loss) per share available to SiriusPoint common shareholders | $ | (0.88) | $ | (0.30) | $ | 0.37 | $ | 1.37 | $ | 1.43 |
| Diluted earnings (loss) per common share: | ||||||||||
| Net income (loss) available to SiriusPoint common shareholders | $ | (140.3) | $ | (48.0) | $ | 64.5 | $ | 168.4 | $ | 134.4 |
| Net income allocated to SiriusPoint participating common shareholders | — | — | (5.4) | (6.5) | (1.6) | |||||
| Change in carrying value of Series A preference shares | — | (7.2) | — | — | — | |||||
| Net income (loss) allocated to SiriusPoint common shareholders | $ | (140.3) | $ | (55.2) | $ | 59.1 | $ | 161.9 | $ | 132.8 |
| Diluted earnings (loss) per share available to SiriusPoint common shareholders (2) | $ | (0.88) | $ | (0.34) | $ | 0.37 | $ | 1.35 | $ | 1.43 |
(1)As of December 31, 2021 and September 30, 2021, there was no dilution as a result of the net loss allocated to SiriusPoint common shareholders in the quarter. As of December 31, 2021, September 30, 2021, and December 31, 2020 there was no dilution as a result of the Company’s average share price for the quarter being under the lowest exercise price or reference price for the respective security for warrants and options.
(2)Basic earnings (loss) per share is based on the weighted average number of common shares and participating securities outstanding during the period. The weighted average number of common shares excludes any dilutive effect of outstanding warrants, options and unvested restricted shares. Diluted earnings (loss) per share is based on the weighted average number of common shares and participating securities outstanding and includes any dilutive effects of warrants, options and unvested restricted shares under share plans and are determined using the treasury stock method. U.S. GAAP requires that participating securities be treated in the same manner as outstanding shares for earnings per share calculations. The Company treats certain of its unvested restricted shares as participating securities. In the event of a net loss, all participating securities, outstanding warrants, options and restricted shares are excluded from both basic and diluted loss per share since their inclusion would be anti-dilutive.
(3)The three months ended March 31, 2021 were revised due to an increase in the total identifiable net assets acquired as part of the Sirius Group acquisition. This resulted in an additional bargain gain of $37.5 million recognized in other revenues for the three months ended March 31, 2021. Net income available to SiriusPoint common shareholders increased by a corresponding amount. There was no impact on total shareholders’ equity as the offsetting entry was recognized in additional paid-in capital.
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SiriusPoint Ltd.
Annualized Return on Average Common Shareholders’ Equity - by Quarter
(expressed in millions of U.S. dollars, except share and per share data and ratios)
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| revised (2) | |||||||||||||||
| Net income (loss) available to SiriusPoint common shareholders | $ | (140.3) | $ | (48.0) | $ | 64.5 | $ | 168.4 | $ | 134.4 | |||||
| Shareholders’ equity attributable to SiriusPoint common shareholders - beginning of period | 2,438.0 | 2,480.1 | 2,407.5 | 1,563.9 | 1,427.6 | ||||||||||
| Shareholders’ equity attributable to SiriusPoint common shareholders - end of period | 2,303.7 | 2,438.0 | 2,480.1 | 2,407.5 | 1,563.9 | ||||||||||
| Average shareholders’ equity attributable to SiriusPoint common shareholders | $ | 2,370.9 | $ | 2,459.1 | $ | 2,443.8 | $ | 1,985.7 | $ | 1,495.7 | |||||
| Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders (1) | (23.7) | % | (7.8) | % | 10.6 | % | 33.9 | % | 35.9 | % |
(1)Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders is calculated by dividing annualized net income (loss) available to SiriusPoint common shareholders for the period by the average common shareholders’ equity determined using the common shareholders' equity balances at the beginning and end of the period.
(2)The three months ended March 31, 2021 were revised due to an increase in the total identifiable net assets acquired as part of the Sirius Group acquisition. This resulted in an additional bargain gain of $37.5 million recognized in other revenues for the three months ended March 31, 2021. Net income available to SiriusPoint common shareholders increased by a corresponding amount. There was no impact on total shareholders’ equity as the offsetting entry was recognized in additional paid-in capital.
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SiriusPoint Ltd.
Basic and Diluted Book Value per Share - by Quarter
(expressed in millions of U.S. dollars, except share and per share data)
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Basic and diluted book value per share numerator: | ||||||||||
| Shareholders' equity attributable to SiriusPoint shareholders | $ | 2,503.7 | $ | 2,638.0 | $ | 2,680.1 | $ | 2,607.5 | $ | 1,563.9 |
| Less: Series B preference shares | (200.0) | (200.0) | (200.0) | (200.0) | — | |||||
| Common shareholders’ equity attributable to SiriusPoint common shareholders - basic | 2,303.7 | 2,438.0 | 2,480.1 | 2,407.5 | 1,563.9 | |||||
| Plus: carrying value of Series A preference shares issued in merger | 20.4 | 31.2 | 38.4 | 40.8 | — | |||||
| Common shareholders’ equity attributable to SiriusPoint common shareholders - diluted | 2,324.1 | 2,469.2 | 2,518.5 | 2,448.3 | 1,563.9 | |||||
| Less: intangible assets | (171.9) | (173.7) | (176.7) | (174.2) | — | |||||
| Tangible common shareholders' equity attributable to SiriusPoint common shareholders - basic | 2,131.8 | 2,264.3 | 2,303.4 | 2,233.3 | 1,563.9 | |||||
| Tangible common shareholders' equity attributable to SiriusPoint common shareholders - diluted | $ | 2,152.2 | $ | 2,295.5 | $ | 2,341.8 | $ | 2,274.1 | $ | 1,563.9 |
| Basic and diluted book value per share denominator: | ||||||||||
| Common shares outstanding | 161,929,777 | 161,949,037 | 161,945,750 | 161,891,354 | 95,582,733 | |||||
| Unvested restricted shares | (2,590,194) | (2,687,612) | (2,879,187) | (3,450,338) | (2,933,993) | |||||
| Basic book value per share denominator | 159,339,583 | 159,261,425 | 159,066,563 | 158,441,016 | 92,648,740 | |||||
| Effect of dilutive Series A preference shares issued in merger (1) | — | 1,015,116 | 2,088,464 | 1,888,145 | — | |||||
| Effect of dilutive warrants (2) | — | — | 24,295 | 58,421 | — | |||||
| Effect of dilutive stock options, restricted shares and restricted share units issued to directors and employees | 2,898,237 | 2,825,401 | 2,629,954 | 2,426,816 | 969,386 | |||||
| Diluted book value per share denominator | 162,237,820 | 163,101,942 | 163,809,276 | 162,814,398 | 93,618,126 | |||||
| Basic book value per share (3) | $ | 14.46 | $ | 15.31 | $ | 15.59 | $ | 15.19 | $ | 16.88 |
| Tangible basic book value per share (3) | $ | 13.38 | $ | 14.22 | $ | 14.48 | $ | 14.10 | $ | 16.88 |
| Diluted book value per share (3) (4) | $ | 14.33 | $ | 15.14 | $ | 15.37 | $ | 15.04 | $ | 16.71 |
| Tangible diluted book value per share (3) | $ | 13.27 | $ | 14.07 | $ | 14.30 | $ | 13.97 | $ | 16.71 |
(1)As of December 31, 2021 there was no dilution as the conversion would result in the forfeiture of all of the Series A preference shares.
(2)As of December 31, 2021, September 30, 2021, and December 31, 2020 there was no dilution as a result of the Company’s share price being under the lowest exercise price for warrants.
(3)Basic book value per share, tangible basic book value per share, diluted book value per share and tangible diluted book value per share are non-GAAP financial measures. Basic book value per share, as presented, is a non-GAAP financial measure and is calculated by dividing common shareholders’ equity attributable to SiriusPoint common shareholders by the number of common shares outstanding, excluding the total number of issued unvested restricted shares, at period end. While restricted shares are outstanding, they are excluded from Basic book value per share because they are unvested. Tangible basic book value per share, as presented, is a non-GAAP financial measure and is calculated by dividing tangible common shareholders’ equity attributable to SiriusPoint common shareholders by the number of common shares outstanding, excluding the total number of unvested restricted shares, at period end. Management believes that effects of intangible assets are not indicative of underlying underwriting results or trends and make book value comparisons to less acquisitive peer companies less meaningful. The Company's management believes tangible book value per share is useful to investors because it provides a more accurate measure of the realizable value of shareholder returns, excluding the impact of intangible assets. Diluted book value per share and tangible diluted book value per share, as presented, are non-GAAP financial measures and are calculated similar to the treasury stock method. Under the treasury stock method, we assume that proceeds received from in-the-money options and/or warrants exercised are used to repurchase common shares in the market. The dilutive effect of restricted shares, restricted share units and options are calculated in a manner consistent with how dilution is calculated using the treasury stock method for earnings per share. We have also followed a similar approach for calculating dilution for warrants, Series A preference shares, Upside Rights and other potentially dilutive securities issued as part of our acquisition of Sirius Group. Management believes these measures are useful to investors because they measure the realizable value of shareholder returns in a manner consistent with how dilution is calculated using the treasury stock method for earnings per share. Management believes that effects of intangible assets are not indicative of underlying underwriting results or trends and make book value comparisons to less acquisitive peer companies less meaningful. Also, the tangible diluted book value per share is useful because it provides a more accurate measure of the realizable value of shareholder returns, excluding intangible assets.
(4)In the year ended December 31, 2021, we changed the method for calculating the dilutive effect of restricted shares, restricted share units and options to calculate the dilutive impact in a manner consistent with how dilution is calculated using the treasury stock method for earnings per share. This change had no impact on previously presented basic book value per share.
Page 18 of 18
siriuspointinvestorprese
February 24, 2022 siriuspt.com Q4 2021 COMPANY OVERVIEW
DISCLAIMER Forward‐ Looking Statements We make statements in this report that are forward‐looking statements within the meaning of the U.S. federal securities laws. We intend these forward‐looking statements to be covered by the safe harbor provisions for forward‐looking statements in the U.S. Federal securities laws. These statements involve risks and uncertainties that could cause actual results to differ materially from those contained in forward‐looking statements made on behalf of SiriusPoint. These risks and uncertainties include our ability to execute on our strategic transformation, including changing the mix of business between insurance and reinsurance; the impact of the novel coronavirus (“COVID‐19”) pandemic or other unpredictable catastrophic events including uncertainties with respect to current and future COVID‐19 losses across many classes of insurance business and the amount of insurance losses that may ultimately be ceded to the reinsurance market, supply chain issues, labor shortages and related increased costs, changing interest rates, equity market volatility and ongoing business and financial market impacts of COVID‐19; the costs, expenses and difficulties of the integration of the operations of Sirius International Insurance Group, Ltd. (“Sirius Group”); fluctuations in our results of operations; a downgrade or withdrawal of our financial ratings; inadequacy of loss and loss adjustment expense reserves, the lack of availability of capital, and periods characterized by excess underwriting capacity and unfavorable premium rates; the performance of financial markets, impact of inflation, and foreign currency fluctuations; legal restrictions on certain of SiriusPoint’s insurance and reinsurance subsidiaries’ ability to pay dividends and other distributions to SiriusPoint; our ability to compete successfully in the (re)insurance market and the effect of consolidation in the (re)insurance industry; technology breaches or failures, including those resulting from a malicious cyber‐attack on us, our business partners or service providers; the effects of global climate change, including increased severity and frequency of weather‐related natural disasters and catastrophes and increased coastal flooding in many geographic areas; our ability to retain key employees and the effects of potential labor disruptions due to COVID‐19 or otherwise; the outcome of legal and regulatory proceedings, regulatory constraints on our business, including legal restrictions on certain of our insurance and reinsurance subsidiaries’ ability to pay dividends and other distributions to us, and losses from unfavorable outcomes from litigation and other legal proceedings; reduced returns or losses in SiriusPoint’s investment portfolio; our concentrated exposure in funds and accounts managed by Third Point LLC, our lack of control over Third Point LLC, our limited ability to withdraw our capital accounts and conflicts of interest among various members of Third Point Advisors LLC, TP Enhanced Fund, Third Point LLC and us; our potential exposure to U.S. federal income and withholding taxes and our significant deferred tax assets, which could become devalued if we do not generate future taxable income or applicable corporate tax rates are reduced; future strategic transactions such as acquisitions, dispositions, investments, mergers or joint ventures and other risks and factors listed in the Company's most recent Annual Report on Form 10‐K and subsequent periodic and current disclosures filed with the Securities and Exchange Commission. Except as required by applicable law or regulation, we disclaim any obligation to publicly update or revise any forward‐looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other circumstances after the date of this report. Non‐GAAP Financial Measures This presentation may also contain non‐GAAP financial information. SiriusPoint’s management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of SiriusPoint’s financial performance, identifying trends in our results and providing meaningful period‐to‐period comparisons. Core underwriting income, Core net services income, Core income, and Core combined ratio are non‐GAAP financial measures. Management believes it is important to review Core results as it better reflects how management views the business and reflects the Company’s decision to exit the runoff business. Basic book value per share, tangible basic book value per share, diluted book value per share and tangible diluted book value per share are also non‐GAAP financial measures. SiriusPoint’s management believes that long‐term growth in book value per share is an important measure of the Company’s financial performance because it allows management and investors to track over time the value created by the retention of earnings. In addition, SiriusPoint’s management believes this metric is useful to investors because it provides a basis for comparison with other companies in the industry that also report a similar measure. Reconciliations of such measures to the most comparable GAAP figures are included in the attached financial information in accordance with Regulation G. 2
CONTENTS - UPDATE 3 4-6 OVERVIEW OF SIRIUSPIONT: KEY HIGHLIGHTS GLOBAL INSURER & REINSURER GLOBAL PLATFORM 8-9 BUSINESS SEGMENTS 7 EXECUTIVE LEADERSHIP TEAM 10 REINSRUANCE 13 INVESTMENT PORTFOLIO 4Q 2021 14 OUR APPROACH TO ESG 15 -16 SIRIUSPOINT MISSION, VISION AND VALUES 17 -18 APPENDIX: SIRIUSPOINT LTD. ISSUED CAPITAL INSTRUMENTS 11-12 INSURANCE & SERVICES
4 Financial Strength Ratings: >$3 Billion $6.5 Billion $2.2 Billion Clients in nearly 150 >8,000 >75 >30 ~1,000 Note: Information is accurate as of December 31, 2021 unless otherwise indicated. (1) Total GAAP capital includes common and preferred equity, and debt; (2) Including restricted cash A- AM Best NYSE LISTING: SPNT SiriusPoint Ltd. is a global insurer and reinsurer. Bermuda‐headquartered with offices around the world, we are listed on the New York Stock Exchange. MGA Incubations & Partnerships Years of history Employees Total GAAP capital 1 Total investments & cash 2 Gross premiums written Treaties & AccountsCountries OVERVIEW OF SIRIUSPOINT: KEY HIGHLIGHTS A- S&P A- Fitch
SIRIUSPOINT: A GLOBAL INSURER AND REINSURER 5 With more than $3 billion total capital, we are a fast‐moving, responsive partner that combines best‐in‐class underwriting and risk management with pioneering ideas We write a global portfolio of Accident & Health (A&H), Specialty, and Property across our insurance and reinsurance franchise SiriusPoint has partnered with and invested in over 30 high‐quality MGA incubations and partnerships globally to access specialty insurance business We maintain a strong pipeline of strategic partnership opportunities globally to grow our Insurance & Services business Our focus is on underwriting insurance and reinsurance profitably and with discipline, and managing risk and volatility Our operational priorities are: Re‐underwriting Reinsurance Growing our Insurance & Services business De‐risking capital investments portfolio
Headquartered in Bermuda Clients across almost 150 countries and appetite and expertise across (re)insurance business globally Admitted and E&S licenses in the US Lloyd’s Syndicate 1945 and London Company Market paper European branch network and licenses Bermuda Class 4 entity Branches across all major global hubs and local branches where reinsurance is originated, mirroring broker footprint Global capabilities across product lines Depth of expertise in North America, continental Europe and emerging markets Unique capability in structured (re)insurance transactions in Bermuda Local and personal relationships built over decades LONDON BALTIMORE, MD MIAMI, FL BERMUDA NEW YORK, NY INDIANAPOLIS, IN TORONTO CARDIFF STOCKHOLM HAMBURG ZURICH LIÈGE SINGAPORE 6 SIRIUSPOINT: A GLOBAL PLATFORM
EXECUTIVE LEADERSHIP TEAM 7 Our proven management team brings diversity of thought and experience to our business, with a focus on creating sustainable value.
BUSINESS SEGMENTS We have organized our financial reporting segments to align with how we manage the business, assess performance and allocate resources SiriusPoint reports on two operating segments effective as of the fourth quarter of 2021 ‐ Reinsurance and Insurance & Services Previously, we managed our business in four reportable segments: Specialty, A&H, Property, and Runoff & Other This change better reflects the management structure of SiriusPoint, provides greater transparency into the growing contribution from our MGAs and other strategic partnerships, and reflects our decision to exit the runoff business Reinsurance ‐ Core treaty and facultative reinsurance offered through our worldwide network of local branches. Product lines include Property, Casualty and Specialty Insurance & Services ‐ Primarily insurance business consisting mainly of A&H, Workers' Compensation, Directors & Officers (D&O), Employment Practices Liability Insurance (EPLI), and Environmental. In addition, Insurance & Services offers a comprehensive set of services for MGAs including fronting services, risk capital, equity and debt financing, and expertise in underwriting, pricing, product development, focused on the future disruptors of the (re)insurance industry 8
Insurance & Services Accident & Health A&H coverage, and our MGA units which include ArmadaCorp and International Medical Group (IMG). Environmental Environmental Insurance book in the U.S. Workers' Compensation U.S. state‐mandated Workers' Compensation Insurance coverage Other Property and Casualty lines, including but not limited to Property, General Liability, Excess Liability, Commercial Auto, Professional Liability, D&O, Cyber and other Specialty classes Reinsurance Aviation & Space Aviation operations and satellite insurance Casualty Cross section of all Casualty lines including General Liability, Umbrella, Auto, Workers' Compensation, Professional Liability and others Credit & Bond Short‐term Commercial Credit and Bond Reinsurance Marine & Energy Marine Reinsurance and yacht insurance Mortgage Mortgage Reinsurance & Retrocession Property Property Catastrophe Excess Reinsurance, Agriculture Reinsurance and Property Risk and Pro‐Rata on a worldwide basis. BUSINESS SEGMENTS 9
SiriusPoint is a leading global reinsurer. We offer treaty and facultative reinsurance through our network of international branch offices, our Lloyd's Syndicate and our platforms in the U.S. and Bermuda We access profitable business by leveraging our relationships with local and international insurers and brokers Following actions taken as a result of an extensive underwriting review, SiriusPoint has: a reduced catastrophe volatility profile an improved and differentiated global specialty and casualty business a more balanced business profile shifting mix of business from reinsurance to insurance Our ongoing focus is on allocating our capital to profitable and sustainable underwriting opportunities while being a partner of choice for clients and brokers REINSURANCE 10
Grow P&C through incubations and strategic partnerships with MGAs and tech enabled insurance services companies SiriusPoint creates strategic partnerships with specialized underwriting focused MGAs and innovative fast‐growing, tech enabled insurance services companies that address consumer insurance needs with creative solutions Our global licenses, strong balance sheet, nimble operating structure, and minimal channel conflicts], enable us to be the partner of choice for MGAs Our approach involves structuring multi‐year partnerships that may include taking an investment stake and offering the use of paper, balance sheet capacity, product expertise, actuarial support and MGA operations support We manage risk through rigorous program oversight and structured downside protections INSURANCE & SERVICES Grow capital light, well‐positioned A&H segment Our A&H segment has delivered steady performance over the years We intend to grow in wholly owned MGAs, IMG and Armada, which operate in attractive market segments of travel and health respectively that have strong secular tailwinds We will continue to grow organically in Employer Stop‐Loss and Life Re Insurance & Services revenues allow us to diversify from our traditional reinsurance business In addition, service fees from MGAs are generally not as prone to the volatile underwriting cycle that is common in reinsurance marketplace. 11
The services we offer our MGA partners includes: INSURANCE & SERVICES - PARTNERSHIPS Insurance & Services includes a diverse portfolio of MGAs that we support through a comprehensive set of services Fronting services Risk capital Equity investments Expertise in underwriting, product development, pricing, capital raise, etc Extensive due diligence Proven management team Alignment of strategic direction Alignment of risk Ongoing collaboration and underwriting oversight Our partnership process includes: SiriusPoint partnerships and incubations include: 12
SIRIUSPOINT INVESTMENT PORTFOLIO 4Q 2021 Note (1) Fixed Income and Cash & Cash Equivalent includes debt securities and unrestricted cash and cash equivalents . (2) Collateral Assets includes restricted securities and restricted cash and cash equivalents. (3) Risk Assets include funds and accounts managed by Third Point LLC, Strategic Investments and SG Legacy Alternatives. • Investment strategy to achieve long‐term total return with prudent risk management • Repositioned investment portfolio to reduce market volatility; reallocated $550 million from Third Point Enhanced in Q4 2021 and Q1 2022 into cash and fixed income • Investment portfolio is heavily weighted towards traditional fixed income, cash, and cash equivalents to support policyholder liabilities with regulatory and collateral requirements • Strong partnership with Third Point LLC to develop tailored strategies for our risk and capital considerations • Incubation of and partnership with MGA and insurance services companies 42% 37% 21% Risk Assets Fixed Income and Cash & Cash Equivalents Collateral Assets 1 2 3 13 Fixed Income and Cash & Cash Equivalents 1 Risk Assets 3 Collateral Assets 2
SIRIUSPOINT APPROACH As a global provider of risk protection to communities, businesses and governments around the world, ESG considerations are at the heart of our operations. The values of sound risk management, good governance, sustainability and social responsibility are reflected in how we operate our business, and treat our colleagues, our clients and communities. OUR APPROACH TO ESG 2021 ESG ACHIEVEMENTS SUSTAINABILITY Adopted Environmental Policy Substantially reduced carbon footprint Publishing inaugural TCFD report in 2022 UNDERWRITING & RISK MANAGEMENT Incorporated climate risk considerations into Underwriting Guidelines Re‐underwrote (re)insurance portfolio to reduce climate risk Incorporating ESG due diligence into investments process Co‐founded climate‐risk management MGA (Parameter Climate) PEOPLE & COMMUNITY Joined Business Alliance for Equality Act Formed Executive Diversity Council Included diversity into executive talent development goals Hired Head of Talent Acquisition & DE&I Implemented diverse hiring practices GOVERNANCE AND ETHICS Formed ESG Council Established cybersecurity and ESG as standing Board agenda items Amended Compensation Committee Charter to incorporate diversity considerations Adopted new Code of Conduct and other compliance policies Engaged in proactive investor and proxy advisory engagement strategy RISK MANAGEMENT GOVERNANCE & ETHICS UNDERWRITING PEOPLE & COMMUNITY SUSTAINABILITY 14
SIRIUSPOINT MISSION, VISION, PURPOSE… Mission It is our mission to be an exceptionally innovative partner, combining data and creative thinking to underwrite risks with skill and discipline, building a sustainable business for all. Vision To be the most adaptive and responsive (re)insurer for the changing world. Purpose Our purpose is to help our customers and communities grow and thrive. To support them when they need it the most. 15
SIRIUSPOINT VALUES Be Yourself We celebrate the diversity of our people and foster an environment that is supportive and fun, to encourage everyone to bring their whole selves to work every day, to enjoy what they do and take pride in themselves, their role, and the company. Be Entrepreneurial We encourage each other to seek out innovative ways to create value for the people and businesses that we support. In a culture where ideas and opinions are openly shared, we apply our skill and passion to make a positive impact, helping us all to move forward, grow, and succeed. Be Open We always speak our minds and do the right thing. Bravery, collaboration, and honesty are at the core of everything we do, ensuring we build open, trusted, and valuable relationships. Be Pioneering We challenge convention, and explore new and better solutions for our customers, partners, and communities. It is our responsibility to discover, learn and adapt, to support others in the ever‐changing global environment. 16
PRESENTATION TITLE OES HERE 17 17 APPENDIX: SIRIUSPOINT LTD. ISSUED CAPITAL INSTRUMENTS For information purposes only
SIRIUSPOINT LTD. CAPITAL INSTRUMENTS Instrument Number Outstanding (milli ons) Face Amount ($millions) Maturity Rating Listing 2021 Change ($millions) FV @ 31 Dec 2021 ($millions) Notes Basic common shares 1591 N/A N/A ‐ NYSE ‐ ticker SPNT 0.0 N/A CM Bermuda currently holds 34% of common shares with 9.9% voting cap. Lock ups expire: 1/3rd October 9, 2021, 1/3rd February 26, 2022, and 1/3rd May 22, 2022 Contingent value rights 5 N/A 2/26/2023 ‐ OTCQX ‐ ticker SSPCF 3.6 30.6 Public price is utilized (OTC Markets). Mechanics of the instrument moves the value inversely to common shares 4Q FV change ‐ trading price of $6.70 vs. 3Q of $5.70 Upside rights ‐ Shares equal to $100 2/26/2022 ‐ ‐ (6.5) 0.0 $100m if SPNT trades >$20 for any 30‐trading day period before Feb. 26, 2022 4Q FV change – short period of time left until expiration and stock price has decreased further (must hit $20 to have value). Merger Warrants 21 N/A 2/26/2026 ‐ Pink Sheet ‐ ticker SSPFF (20.9) 32.5 $11 strike price2 4Q FV change – due to share price decrease and period to exercise eroding Preference shares ‐ Series A 12 N/A 2/26/2024 ‐ ‐ (20.4) 20.4 Current estimated Covid adjustment 4Q FV Change – More shares are surrendered when share price is lower Preference shares ‐ Series B 8 $200 Perpetual NC5 BB+ (S&P, Fitch) NYSE ‐ ticker SPNT PB 0.0 N/A 8% dividend per annum SEK‐denominated sub debt ‐ SEK 2,750 9/22/2047 BB+ (S&P, Fitch) Irish Stock Exchange 0.0 N/A STIBOR + 4% coupon Sirius senior debt ‐ $400 11/1/2026 BBB (S&P), BBB‐ (Fitch) Bermuda Stock Exchange 0.0 N/A 4.6% coupon TPRe senior debt ‐ $115 2/13/2025 BBB‐ (AMB) OTCQX ‐ SPNT/25 0.0 N/A 7% coupon Subtotal (44.2) 83.6 Sirius private warrants 4 N/A 11/5/2023 ‐ ‐ (4.1) 3.2 $13 strike price Sirius public warrants 6 N/A 11/5/2023 ‐ ‐ (1.5) 1.1 $18.89 strike price Total (49.8) 87.8 Fair value reflects total liability classified financial instruments Notes: [1] Excludes unvested restricted shares. [2] In relation only to the warrants issued as consideration. Summary terms only presented here. For the full terms and conditions of each of the above securities, please see SiriusPoint’s final joint proxy statement / prospectus, filed on October 23, 2020, and our other SEC filings, which can be found in the Investor Relations section of www.siriuspt.com. For the full terms and conditions of Sirius Group’s sub‐debt and senior‐debt, please see Sirius Group’s historical SEC filings. As of December 31, 2021 18For information purposes only
THANK YOU 19