SiriusPoint Announces Fourth Quarter and Full Year 2021 Earnings Results
SiriusPoint Ltd. (NYSE:SPNT) reported a net loss of $140 million for Q4 2021, with diluted earnings at $0.88 per share. The company's tangible book value dropped by 5.7% to $13.27. For the full year, net income was $45 million but the core loss reached $163 million. Notably, catastrophe losses stood at $326 million for the year. The company's strategy includes reshaping its portfolio and reallocating capital to reduce risk and enhance long-term value. For Q4, the Core combined ratio was 93.6%, however, it faced significant net investment losses, totaling $151 million.
- Core underwriting income improved to $34.7 million in Q4 2021 from a loss of $44.8 million in Q4 2020.
- Reinsurance segment gross premiums written increased by $275.3 million in Q4 2021, driven by the acquisition of Sirius Group.
- Net loss of $140 million for Q4 2021 indicates ongoing financial challenges.
- Core loss for the year reached $163 million, impacted by significant underwriting losses and catastrophe events.
HAMILTON, Bermuda, Feb. 24, 2022 (GLOBE NEWSWIRE) -- 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 , or5.7% , 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 of93.6% , 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 , or20.6% , from December 31, 2020 to$13.27 - Core loss of
$163 million , which includes an underwriting loss of$174 million and Core combined ratio of110.0% , 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 , including27.9% 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
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) | $ | 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 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
Catastrophe losses, net of reinsurance and reinstatement premiums, for the three months ended December 31, 2021 were
Year ended December 31, 2021 and 2020
Core results for the year ended December 31, 2021 were a loss of
Catastrophe losses, net of reinsurance and reinstatement premiums, for the year ended December 31, 2021 were
Reinsurance Segment
Three months ended December 31, 2021 and 2020
Reinsurance generated segment income of
Reinsurance gross premiums written were
Year ended December 31, 2021 and 2020
Reinsurance generated a segment loss of
Reinsurance gross premiums written were
Insurance & Services Segment
Three months ended December 31, 2021 and 2020
Insurance & Services generated a segment loss of
Insurance & Services gross premiums written were
Year ended December 31, 2021 and 2020
Insurance & Services generated segment income of
Insurance & Services gross premiums written were
Investments
Total realized and unrealized investment gains (losses) and net investment income (loss) was
Investment results for the three months ended December 31, 2021 were primarily due to a net investment loss of
Investment results for the three months ended December 31, 2020 were primarily attributable to net investment income of
For the year ended December 31, 2021, net investment income from the TP Enhanced Fund totaled
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
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
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
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
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, 2021 | December 31, 2020 | ||||||
| Assets | |||||||
| Investments in related party investment funds, at fair value (cost - | $ | 909.6 | $ | 1,055.6 | |||
| Debt securities, trading, at fair value (cost - | 2,085.6 | 101.3 | |||||
| Short-term investments, at fair value (cost - | 1,075.8 | — | |||||
| Equity securities, trading, at fair value (cost - | 2.8 | — | |||||
| Other long-term investments, at fair value (cost - | 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 | 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 | $ | 2,503.7 | $ | 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 | $ | 2,152.2 | $ | 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 | $ | 14.46 | $ | 16.88 | |||
| Tangible basic book value per share | $ | 13.38 | $ | 16.88 | |||
| Diluted book value per share | $ | 14.33 | $ | 16.71 | |||
| Tangible diluted book value per share | $ | 13.27 | $ | 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 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 | $ | (140.3 | ) | $ | 134.4 | $ | 44.6 | $ | 143.5 | ||||||
| Common shareholders’ equity attributable to SiriusPoint common shareholders - beginning of period | $ | 2,438.0 | $ | 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 | $ | 2,370.9 | $ | 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 | % | |||||||
FAQ
What were SiriusPoint's Q4 2021 earnings results?
How did SiriusPoint's book value change in Q4 2021?
What were the main drivers of SiriusPoint's core loss in 2021?
How did SiriusPoint's reinsurance segment perform in Q4 2021?
What is the future outlook for SiriusPoint after the Q4 2021 results?
