SiriusPoint(US:SPNT)2025-05-05 20:21PART I. FINANCIAL INFORMATION Item 1. Financial Statements SiriusPoint Ltd.'s unaudited consolidated financial statements for Q1 2025 detail changes in assets, liabilities, equity, income, and cash flows Consolidated Balance Sheets Total assets decreased to $12.3 billion, liabilities to $10.3 billion, while shareholders' equity increased to $2.03 billion as of March 31, 2025 Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $12,280.5 | $12,524.9 | | Total Investments | $5,118.7 | $5,705.5 | | Cash and cash equivalents | $740.3 | $682.0 | | Total Liabilities | $10,253.8 | $10,586.1 | | Loss and loss adjustment expense reserves | $5,762.6 | $5,653.9 | | Share repurchase liability | $— | $483.0 | | Total Shareholders' Equity | $2,026.7 | $1,938.8 | Consolidated Statements of Income Net income available to common shareholders decreased to $57.6 million in Q1 2025, primarily due to higher loss and loss adjustment expenses Q1 2025 vs Q1 2024 Income Statement (in millions) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net premiums earned | $626.7 | $593.8 | | Total revenues | $727.3 | $685.5 | | Loss and loss adjustment expenses incurred, net | $401.8 | $317.5 | | Total expenses | $652.0 | $579.9 | | Net income | $62.0 | $95.9 | | Net income available to SiriusPoint common shareholders | $57.6 | $90.8 | | Diluted EPS | $0.49 | $0.49 | Consolidated Statements of Cash Flows Q1 2025 saw a net cash outflow from operating activities and significant cash use for share repurchases in financing activities Cash Flow Summary (in millions) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $(88.9) | $58.8 | | Net cash provided by (used in) investing activities | $610.9 | $(80.8) | | Net cash provided by (used in) financing activities | $(491.4) | $7.1 | | Net increase (decrease) in cash | $30.6 | $(14.9) | - A significant use of cash in financing activities was the $490.8 million purchase of SiriusPoint common shares under the share repurchase program21 Note 3. Segment Reporting Core income decreased to $47.4 million in Q1 2025, driven by lower Reinsurance underwriting income due to catastrophe losses Segment Income (Loss) for Three Months Ended March 31 (in millions) | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Reinsurance | $8.4 | $39.9 | | Insurance & Services | $39.0 | $22.5 | | Core Income | $47.4 | $62.4 | | Corporate | $(4.4) | $10.7 | Segment Combined Ratios for Three Months Ended March 31 | Segment | 2025 | 2024 | | :--- | :--- | :--- | | Reinsurance | 97.1% | 84.2% | | Insurance & Services | 94.0% | 98.4% | | Core Combined Ratio | 95.4% | 91.4% | | Total Combined Ratio | 91.4% | 84.9% | - Catastrophe losses for Q1 2025 were $67.9 million, primarily impacting the Reinsurance segment, compared to minimal catastrophe losses in Q1 202446 - The company recorded net favorable prior year loss reserve development of $34.2 million in Q1 2025, compared to $38.9 million in Q1 202446124125 Note 6. Investments Total debt securities decreased to $4.75 billion as of March 31, 2025, with the portfolio remaining high-quality and a 3.0-year weighted average duration Debt Securities by Fair Value (in millions) | Security Type | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Debt securities, available for sale | $4,635.2 | $5,131.0 | | Debt securities, trading | $117.6 | $162.2 | | Total Debt Securities | $4,752.8 | $5,293.2 | Debt Securities by Credit Rating (AFS & Trading, in millions) | Rating | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | AAA | $744.5 | $882.5 | | AA | $2,145.2 | $2,281.9 | | A | $1,054.5 | $1,381.9 | | BBB | $663.6 | $683.4 | | Other | $145.0 | $63.5 | | Total | $4,752.8 | $5,293.2 | Note 12. Debt and Letter of Credit Facilities Total debt increased slightly to $663.5 million, with $1.13 billion in letters of credit issued and no outstanding revolving credit facility borrowings Debt Obligations (in millions) | Debt Instrument | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 2024 Senior Notes, carrying value | $395.1 | $394.8 | | 2017 SEK Subordinated Notes, carrying value | $268.4 | $244.3 | | Total debt | $663.5 | $639.1 | - The company has a $400.0 million senior unsecured revolving credit facility, with no outstanding borrowings as of March 31, 2025139140 Note 14. Shareholders' Equity The company repurchased 500,000 common shares and has $180.8 million remaining for future repurchases, while paying preference share dividends - In Q1 2025, the company repurchased 500,000 common shares from Director Daniel S Loeb at $14.00 per share153 - As of March 31, 2025, $180.8 million remained authorized for future share repurchases152 - Dividends of $4.0 million were declared and paid to Series B preference shareholders in Q1 2025, consistent with Q1 2024151 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 financial results, highlighting a 95.4% Core combined ratio, increased tangible book value, and strategic progress despite catastrophe losses Key Performance Indicators | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Combined ratio | 91.4% | 84.9% | | Core income | $47.4M | $62.4M | | Core combined ratio | 95.4% | 91.4% | | Annualized ROAE | 12.9% | 15.4% | | Book value per common share | $15.73 | $14.92 (as of 12/31/24) | | Tangible book value per diluted common share | $14.21 | $13.42 (as of 12/31/24) | - AM Best and Fitch affirmed the company's ratings and revised the outlook to Positive from Stable, reflecting improved balance sheet strength and underwriting performance181 Consolidated Results of Operations Consolidated net income decreased to $62.0 million in Q1 2025, primarily due to higher catastrophe losses and lower net investment income - The decrease in underwriting results was primarily driven by increased catastrophe losses from the California wildfires190 - Net investment income decreased due to a lower asset base after the company returned approximately $1.0 billion of capital to shareholders since March 31, 2024185201 - Other revenues increased, driven by higher service fee revenue from the IMG travel insurance business203 Segment Results Core gross premiums written grew 12.4%, with Reinsurance underwriting income declining due to catastrophe losses and Insurance & Services improving - Reinsurance: Underwriting income decreased by $31.5 million, primarily due to $63.1 million in catastrophe losses from California wildfires, which added 21.8 percentage points to the combined ratio226228 - Insurance & Services: Underwriting income increased by $15.7 million, driven by a 4.4 point improvement in the loss ratio from lower attritional losses and favorable prior year development Gross premiums written grew 21.1% to $635.1 million231232235 - Corporate: The underwriting loss was $4.4 million, compared to income of $10.7 million in the prior year, reflecting the runoff of specific workers' compensation and cyber programs237238 Liquidity and Capital Resources The company maintains strong liquidity with a 227% estimated BSCR ratio, an undrawn credit facility, and sufficient dividend capacity - The company's estimated Bermuda Solvency Capital Requirement (BSCR) ratio was 227% as of Q1 2025, indicating a strong capital position253 - A $400 million senior unsecured revolving credit facility was available and undrawn as of March 31, 2025255256 Cash Flow Summary for Q1 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash from operating activities | $(88.9) | $58.8 | | Net cash from investing activities | $610.9 | $(80.8) | | Net cash from financing activities | $(491.4) | $7.1 | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company is exposed to interest rate risk, with a hypothetical 100 bp increase decreasing debt securities fair value by $141.6 million, and foreign currency risk Interest Rate Sensitivity on Debt Securities (as of March 31, 2025) | Assumed Change in Interest Rate | Estimated Pre-tax Change in Fair Value (in millions) | | :--- | :--- | | +100 bp | $(141.6) | | -100 bp | $114.7 | Foreign Currency Sensitivity (as of March 31, 2025) | Currency vs USD | Impact of 10% USD Increase (in millions) | | :--- | :--- | | Euro | $(11.1) | | British Pound | $5.7 | Item 4. Controls and Procedures Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2025289 - No material changes to internal control over financial reporting occurred during the quarter290 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company is involved in various lawsuits and regulatory actions typical for the insurance industry, none expected to have a material adverse effect - The company is subject to lawsuits and regulatory actions typical for the insurance industry, which are considered in its loss and loss expense reserves292 - Management believes no current legal proceeding is likely to have a material adverse effect on the company's financial condition or operations292 Item 1A. Risk Factors No material changes to risk factors, except for expanded discussion on potential adverse impacts of inflation and changing tariff landscapes - A key risk highlighted is the impact of inflation, which can cause claim costs to increase above established loss reserves, potentially reducing net income294295 - The changing tariff landscape is noted as a risk that could hinder economic growth and impact the company's credit and mortgage business295 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company completed significant share repurchases from CM Bermuda and Daniel S Loeb, with $180.8 million remaining for future share repurchases - Completed a major share repurchase from CM Bermuda of 45.7 million shares297 - Repurchased 500,000 common shares from director Daniel S Loeb at $14.00 per share298 - Approximately $180.8 million remains available for future share repurchases as of March 31, 2025298