AM Best Affirms Credit Ratings of SiriusPoint Ltd. and Its Subsidiaries

Rhea-AI Summary

AM Best has affirmed the Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) for the operating subsidiaries of SiriusPoint Ltd. (NYSE: SPNT). Additionally, it affirmed a Long-Term ICR of “bbb-” (Good) for SiriusPoint as a non-operating holding company. The ratings reflect SiriusPoint's consolidated balance sheet strength, assessed as very strong, and adequate operating performance. Notably, the company demonstrated a significant de-risking in 2022, with cash and fixed income securities increasing to 92% of its portfolio. However, its recent technical performance showed weaknesses with combined ratios of 120% and 107% for 2021 and 2022, respectively. SiriusPoint aims to improve underwriting profitability by shifting its business mix away from catastrophe-exposed property business.

Positive

• Financial Strength Rating of A- (Excellent) reaffirmed.
• Long-Term Issuer Credit Ratings of 'a-' (Excellent) affirmed for operating subsidiaries.
• Significant de-risking of asset base in 2022 with USD 0.6 billion redemption and reinvestment in high quality fixed income securities.
• Cash and fixed income investments comprise 92% of the investment portfolio.

Negative

• Recent combined ratios were high at 120% and 107% for 2021 and 2022 respectively.
• Weak technical performance may hinder growth.

LONDON--(BUSINESS WIRE)-- AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of “a-” (Excellent) of the rated operating subsidiaries of SiriusPoint Ltd. (SiriusPoint) (Bermuda) [NYSE: SPNT]. Additionally, AM Best has affirmed the Long-Term ICR of “bbb-” (Good) of SiriusPoint, which is a non-operating holding company. Concurrently, AM Best has affirmed the Long-Term Issue Credit Rating of “bbb-” (Good) on USD 115 million, 7% senior unsecured notes, due 2025, of SiriusPoint. The outlook of these Credit Ratings (ratings) is stable. (See below for a detailed listing of the companies and ratings.)

The ratings reflect SiriusPoint’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings of the group’s operating subsidiaries factor in their strategic importance to SiriusPoint.

SiriusPoint’s balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2022, as measured by Best’s Capital Adequacy Ratio. The assessment also considers the significant de-risking of SiriusPoint’s asset base in 2022, owing to the redemption of USD 0.6 billion from related party investment funds and reinvestment of the proceeds into high quality fixed income securities. As a result, cash and fixed income investments comprised 92% of SiriusPoint's investment portfolio at year-end 2022, up from 78% at year-end 2021. A partially offsetting rating factor is the group's somewhat limited capital fungibility due to a significant portion of consolidated available capital being held as a safety reserve in the group’s Swedish subsidiary.

SiriusPoint is expected to report adequate operating performance over the underwriting cycle. However, recent technical performance has been weak, demonstrated by combined ratios of 120% and 107% (as calculated by AM Best) in 2021 and 2022, respectively. Underwriting profitability is expected to improve and be more stable as SiriusPoint’s management continues to rebalance the group’s business mix away from catastrophe-exposed property business toward less volatile accident and health and specialty lines.

SiriusPoint’s neutral business profile assessment reflects its market position as a midtier global (re)insurer, which operates from platforms in Europe, the United States, Bermuda and at Lloyd’s. The group has a good level of diversification by line of business, which is expected to improve further as it executes its business plan.

The FSR of A- (Excellent) and the Long-Term ICRs of “a-” (Excellent) have been affirmed, with stable outlooks for the following subsidiaries of SiriusPoint Ltd.:

• SiriusPoint America Insurance Company
• SiriusPoint Bermuda Insurance Company Ltd.
• SiriusPoint International Insurance Corporation (publ)
• SiriusPoint Specialty Insurance Corporation

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2023 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230419005845/en/

Ben Diaz-Clegg

Senior Financial Analyst

+44 20 7397 0293

ben.diaz-clegg@ambest.com

Christopher Sharkey

Associate Director, Public Relations

+1 908 439 2200, ext. 5159

christopher.sharkey@ambest.com

Ghislain Le Cam, CFA, FRM

Senior Director, Analytics

+44 20 7397 0268

ghislain.lecam@ambest.com

Al Slavin

Senior Public Relations Specialist

+1 908 439 2200, ext. 5098

al.slavin@ambest.com

Source: AM Best

FAQ

What is SiriusPoint's Financial Strength Rating as of 2023?

SiriusPoint's Financial Strength Rating is A- (Excellent) as affirmed by AM Best.

What Long-Term Issuer Credit Ratings were given to SiriusPoint subsidiaries?

Long-Term Issuer Credit Ratings of 'a-' (Excellent) were affirmed for SiriusPoint subsidiaries.

What was the cash and fixed income percentage in SiriusPoint's investment portfolio at the end of 2022?

At year-end 2022, cash and fixed income investments comprised 92% of SiriusPoint's investment portfolio.

How did SiriusPoint's technical performance trend in 2021 and 2022?

SiriusPoint's combined ratios were 120% in 2021 and 107% in 2022, indicating weak technical performance.

What steps is SiriusPoint taking to improve underwriting profitability?

SiriusPoint is rebalancing its business mix away from catastrophe-exposed property business towards less volatile lines.