SiriusPoint(US:SPNT)2025-02-21 21:36Financial Transactions - The company completed a loss portfolio transfer transaction with Clarendon National on October 1, 2024, and with Pallas Reinsurance Company Ltd. on June 30, 2023, involving workers' compensation insurance exposures[81]. - As of December 31, 2024, the company had loss and loss adjustment expenses recoverable, net of $2.3 billion, unchanged from December 31, 2023[82]. - The breakdown of loss recoverables by S&P rating as of December 31, 2024, shows that 17.9% are rated AA, 65.5% rated A, and 15.8% not rated[84]. - The not rated category includes $907.4 million related to Pallas Reinsurance Company Ltd. and $291.4 million related to Clarendon National[85]. Regulatory Compliance - The company maintains a minimum liquidity ratio of 75% of relevant liabilities as per the Insurance Act[110]. - The minimum solvency margin for a Class 4 insurer is the greater of $100 million or 50% of net premium written, among other criteria[111]. - The company is subject to various regulations, including solvency and liquidity standards imposed by the Bermuda Monetary Authority[97]. - Class 3A and Class 4 insurers must maintain available statutory economic capital and surplus at a level equal to or exceeding their enhanced capital requirement (ECR) as determined by the BSCR model or an approved internal capital model[112]. - The Bermuda Monetary Authority (BMA) has established a target capital level (TCL) for insurers at 120% of their ECR, serving as an early warning tool for regulatory oversight[114]. - Class 3A and Class 4 insurers are prohibited from declaring dividends if it breaches their minimum solvency margin (MSM) or minimum liquidity ratio, and any dividends paid cannot exceed 25% of total statutory capital and surplus from the previous financial year without BMA approval[117][118]. - The Regulatory Group must maintain available statutory economic capital and surplus at least equal to or exceeding the group ECR, which is also set at a minimum of 120% of the group ECR[128]. - The BMA requires the Regulatory Group to submit annual group audited financial statements and a Group Solvency Self-Assessment (GSSA) to assess capital adequacy against risks[128]. - The GSSA must include stress testing and reflect all assets and liabilities, ensuring alignment with the group's risk characteristics and business model[128]. - The BMA oversees the controllers of Bermuda registered insurers, requiring notification of any changes within 45 days[120][123]. - Insurers must comply with the BMA's Insurance Code of Conduct, which establishes standards for corporate governance and risk management[116]. - The Economic Substance Act mandates that Bermuda registered entities maintain a substantial economic presence in Bermuda if engaged in relevant activities[130]. - The BMA's Cyber Code requires insurers to manage operational cyber risks and report significant adverse impacts on their operations[133]. Taxation and Financial Performance - SiriusPoint's Bermuda operations will be subject to a new Corporate Income Tax Act starting January 1, 2024, with a tax rate of 15% on net income[135]. - As of December 31, 2024, SiriusPoint's U.S. domiciled subsidiaries exceeded all required Risk-Based Capital (RBC) regulatory thresholds[139]. - SiriusPoint America has dividend capacity without prior approval, while Oakwood and SiriusPoint Specialty do not have such capacity[152]. - The Dodd-Frank Act established the Federal Insurance Office (FIO) to monitor the insurance industry, which may lead to regulatory changes affecting SiriusPoint[156]. - All state insurance regulatory bodies overseeing SiriusPoint's U.S.-based subsidiaries are accredited by the National Association of Insurance Commissioners (NAIC)[139]. - SiriusPoint's U.S.-based subsidiaries must comply with state laws requiring investment portfolio diversification and quality standards[150]. - The Terrorism Risk Insurance Act provides a federal backstop for U.S.-based property and casualty insurers against terrorism-related losses[153]. - SiriusPoint's subsidiaries are not federally regulated but are impacted by federal regulations, including those from the U.S. Treasury Department's Office of Foreign Asset Control (OFAC)[154]. - The NAIC's Insurance Regulatory Information System (IRIS) monitors the financial condition of insurance companies, and none of SiriusPoint's subsidiaries are currently under scrutiny[140]. - SiriusPoint's U.S.-based insurance subsidiaries must file their rates and rules with state regulatory authorities, which can affect pricing strategies[148]. Investment and Financial Results - Total net investment income for the year ended December 31, 2023 was $277.0 million, primarily from interest income related to debt and short-term investments[462]. - Other revenues for the year ended December 31, 2024 included a gain of $95.9 million from the deconsolidation of Arcadian Risk Capital Ltd. and $90.1 million of service fee revenue from MGAs, compared to $87.9 million in 2023[463]. - Loss on settlement and change in fair value of liability classified instruments for the year ended December 31, 2024 was $148.5 million, up from $59.4 million in 2023[464]. - Service fee expense decreased to $176.2 million for the year ended December 31, 2024, compared to $187.8 million in 2023, primarily due to the deconsolidation of Arcadian[467]. - Amortization of intangible assets for the year ended December 31, 2024 was $11.9 million, slightly up from $11.1 million in 2023[468]. - Interest expense for the year ended December 31, 2024, was $69.6 million, an increase from $64.1 million in 2023, primarily due to higher external debt expenses and refinancing costs[470]. - Funds held interest expense included $25.5 million from the 2023 LPT and $4.0 million from the 2024 LPT for 2024, compared to $16.2 million from the 2023 LPT in 2023[471]. - Foreign exchange gains for the year ended December 31, 2024, were $10.0 million, while foreign exchange losses in 2023 were $34.9 million, primarily from international operations[473][474]. - The aggregate effect of foreign exchange resulted in an increase to net income of $14.6 million and comprehensive income of $13.0 million for the year ended December 31, 2024[476]. - Income tax expense for the year ended December 31, 2024, was $30.7 million, compared to a tax benefit of $45.0 million in 2023 due to a one-time tax benefit from the Bermuda CIT[477]. Underwriting Performance - Gross premiums written for 2024 totaled $3,176.4 million, with net premiums written at $2,340.9 million[482]. - Core underwriting income for 2024 was $200.0 million, with a combined ratio of 91.0%[482]. - The attritional loss ratio for the Reinsurance segment was 55.5%, while the Insurance & Services segment reported a ratio of 63.6%[482]. - The company reported net services fee income of $46.7 million for 2024, with segment income totaling $276.4 million[482]. - Gross premiums written decreased by $134.3 million, or 4.1%, for the year ended December 31, 2024 compared to 2023[487]. - Net premiums earned decreased by $81.5 million, or 3.6%, for the year ended December 31, 2024 compared to 2023[487]. - Underwriting income for the year ended December 31, 2024 was $200.0 million with a combined ratio of 91.0%, compared to $250.2 million and 89.1% in 2023[488]. - Catastrophe losses for the year ended December 31, 2024 were $54.8 million, or 2.5 percentage points on the combined ratio, compared to $13.5 million, or 0.6 percentage points in 2023[491]. - Services revenue decreased to $222.9 million for the year ended December 31, 2024 from $237.5 million in 2023[492]. - Net services fee income decreased to $46.7 million for the year ended December 31, 2024 from $49.7 million in 2023[493]. - Gross premiums written in the Reinsurance segment increased by $64.6 million, or 5.1%, for the year ended December 31, 2024 compared to 2023[496]. - Net favorable prior year loss reserve development was $75.0 million for the year ended December 31, 2024, down from $140.8 million in 2023[497]. - The Insurance & Services segment includes equity stakes in 20 entities, providing a wide range of insurance solutions[500]. - The attritional loss ratio for the year ended December 31, 2024 was 60.0%, compared to 63.1% in 2023[1]. - Gross premiums written decreased by $198.9 million, or 9.8%, to $1,840.8 million for the year ended December 31, 2024, compared to $2,039.7 million in 2023[502]. - Underwriting income increased by $31.2 million to $75.2 million for the year ended December 31, 2024, driven by a decreased loss ratio of 61.9% compared to 65.3% in 2023[505]. - Consolidated MGAs' gross premiums written decreased by $422.2 million, or 61.8%, to $260.9 million for the year ended December 31, 2024, primarily due to the deconsolidation of Banyan and Arcadian[504]. - Services revenue decreased by $15.7 million to $222.9 million for the year ended December 31, 2024, mainly due to the deconsolidation of Arcadian[506]. - The combined ratio improved to 93.5% for the year ended December 31, 2024, compared to 96.5% in 2023[1]. - Net premiums earned decreased by $95.2 million to $1,154.0 million for the year ended December 31, 2024, compared to $1,249.2 million in 2023[1]. - The net services income increased by $2.3 million to $44.6 million for the year ended December 31, 2024, compared to $42.3 million in 2023[506]. - The underwriting loss in the Corporate segment increased to $50.5 million for the year ended December 31, 2024, compared to a loss of $16.9 million in 2023[507]. Workforce and Culture - The workforce expanded to 1,072 employees as of December 31, 2024, an increase from 1,063 employees in 2023, with 43% located outside North America[205]. - Employee engagement survey response rate increased to 94% in 2024, up from 81% in 2023[193]. - The company aims to enhance its talent pipeline through early career recruitment and succession planning for key leadership roles[202]. - The company has made significant investments in leadership development and introduced Leadership Principles to enhance decision-making capabilities[194]. - The company is committed to building a strong inclusion culture and has evaluated policies to support an inclusive workplace[200].