SiriusPoint(SPNT) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements Presents the unaudited consolidated financial statements as of June 30, 2025, including balance sheets, income statements, cash flows, and related notes Consolidated Balance Sheets Total assets decreased to $12.36 billion while shareholders' equity increased to $2.11 billion as of June 30, 2025 Consolidated Balance Sheet Summary (in millions) | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $12,355.7 | $12,524.9 | | Total Investments | $5,213.8 | $5,705.5 | | Cash and cash equivalents | $732.4 | $682.0 | | Total Liabilities | $10,248.9 | $10,586.1 | | Loss and loss adjustment expense reserves | $5,817.4 | $5,653.9 | | Debt | $678.4 | $639.1 | | Share repurchase liability | $— | $483.0 | | Total Shareholders' Equity | $2,106.8 | $1,938.8 | Consolidated Statements of Income Net income available to common shareholders decreased to $116.8 million for the first six months of 2025 from $200.7 million year-over-year Consolidated Income Statement Highlights (in millions, except per share data) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net premiums earned | $1,278.7 | $1,184.3 | | Total revenues | $1,475.5 | $1,428.8 | | Loss and loss adjustment expenses incurred, net | $774.4 | $681.9 | | Total expenses | $1,325.3 | $1,194.2 | | Net income | $125.3 | $210.7 | | Net income available to SiriusPoint common shareholders | $116.8 | $200.7 | | Diluted earnings per share | $0.98 | $1.05 | Consolidated Statements of Cash Flows Net cash from investing activities was $565.8 million, offset by cash used in operating and financing activities, resulting in a net cash increase Cash Flow Summary (in millions) | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(26.8) | $(91.1) | | Net cash provided by (used in) investing activities | $565.8 | $(61.7) | | Net cash used in financing activities | $(510.4) | $(224.5) | | Net increase (decrease) in cash | $28.6 | $(377.3) | Note 3. Segment reporting The company's two core segments, Insurance & Services and Reinsurance, generated a combined income of $123.7 million in the first half of 2025 - The company's business is divided into two primary operating segments: Insurance & Services and Reinsurance[29] Segment Performance - Six Months Ended June 30, 2025 (in millions) | Metric | Insurance & Services | Reinsurance | Core Total | | :--- | :--- | :--- | :--- | | Gross premiums written | $1,195.5 | $724.5 | $1,920.0 | | Net premiums earned | $705.4 | $566.0 | $1,271.4 | | Underwriting income (loss) | $59.6 | $36.5 | $96.1 | | Net services income | $27.6 | $— | $27.6 | | Segment income (loss) | $87.2 | $36.5 | $123.7 | | Combined ratio | 91.6% | 93.5% | 92.4% | Segment Performance - Six Months Ended June 30, 2024 (in millions) | Metric | Insurance & Services | Reinsurance | Core Total | | :--- | :--- | :--- | :--- | | Gross premiums written | $1,014.5 | $708.9 | $1,723.4 | | Net premiums earned | $561.4 | $509.8 | $1,071.2 | | Underwriting income | $16.3 | $64.9 | $81.2 | | Net services income | $27.2 | $— | $27.2 | | Segment income | $43.5 | $64.9 | $108.4 | | Combined ratio | 97.1% | 87.2% | 92.5% | Note 6. Investments Total investments decreased to $5.21 billion, with the debt portfolio having a weighted average duration of 3.0 years Debt Securities by Fair Value (in millions) | Security Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Debt securities, available for sale | $4,735.9 | $5,131.0 | | Debt securities, trading | $102.9 | $162.2 | Debt Securities by Credit Rating (AFS & Trading, in millions) | Rating | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | AAA | $694.3 | $882.5 | | AA | $2,176.9 | $2,281.9 | | A | $1,047.8 | $1,381.9 | | BBB | $750.6 | $683.4 | | Other | $169.2 | $63.5 | - The weighted average duration of the Company's debt securities portfolio, including short-term investments, was approximately 3.0 years as of June 30, 2025[90] Note 10. Loss and loss adjustment expense reserves Gross loss reserves increased to $5.82 billion, with $42.9 million of net favorable prior year loss reserve development recorded in H1 2025 Loss Reserve Activity - Six Months Ended June 30, 2025 (in millions) | Description | Amount | | :--- | :--- | | Net reserves, beginning of period | $3,347.1 | | Incurred losses - Current year | $817.3 | | Incurred losses - Prior years (Favorable) | $(42.9) | | Total incurred losses | $774.4 | | Total net paid losses | $(623.6) | | Net reserves, end of period | $3,553.5 | - Net favorable prior year loss reserve development of $42.9 million for the first half of 2025 was driven by positive development in Property and Accident & Health (A&H)[128] Note 14. Shareholders' equity The company repurchased 500,000 common shares, paid $8.0 million in preference share dividends, and has $180.8 million remaining in its buyback program - During the six months ended June 30, 2025, the Company repurchased 500,000 of its common shares from Daniel S. Loeb at $14.00 per share[157] - As of June 30, 2025, approximately $180.8 million of common shares may still be purchased under the authorized share repurchase program[156] - The company paid dividends of $8.0 million to Series B preference shareholders during the first six months of 2025, consistent with the prior year period[155] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's analysis highlights a 9.8% increase in book value per share, positive segment performance, and a strong liquidity position Key Performance Indicators | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Combined ratio | 88.8% | 87.0% | | Core combined ratio | 92.4% | 92.5% | | Core income (in millions) | $123.7 | $108.4 | | Annualized return on avg. common equity | 12.8% | 16.7% | | Book value per diluted common share | $16.03 | $14.60 (as of 12/31/24) | - Book value per diluted common share increased 9.8% to $16.03 as of June 30, 2025, from $14.60 as of December 31, 2024, reflecting positive underwriting and investment results[196] Consolidated Results of Operations Net income for H1 2025 decreased to $125.3 million, primarily due to higher catastrophe losses and the absence of a prior-year one-time gain Consolidated Results Summary (in millions) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Total underwriting income | $144.3 | $154.7 | | Net investment income and gains (losses) | $139.8 | $103.1 | | Other revenues | $57.0 | $146.7 | | Net income | $125.3 | $210.7 | - The decrease in net underwriting results for the first half of 2025 was primarily driven by increased catastrophe losses from the California wildfires[200] - Other revenues decreased significantly in H1 2025 compared to H1 2024, as the prior year period included a $95.9 million gain from the deconsolidation of Arcadian[212][213] Segment Results The Insurance & Services segment's underwriting income grew significantly, while the Reinsurance segment's results were impacted by catastrophe losses - Insurance & Services segment premium growth was driven by expansion in Surety, growth in A&H, and new program growth in the international business[257] - The Reinsurance segment's underwriting results for H1 2025 were significantly impacted by $62.6 million in catastrophe losses, primarily from California wildfires[270] Segment Underwriting Income (in millions) | Segment | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Insurance & Services | $59.6 | $16.3 | | Reinsurance | $36.5 | $64.9 | | Corporate | $(11.5) | $1.1 | Liquidity and Capital Resources The company maintains a strong capital position with an estimated BSCR ratio of 223% and access to a $400 million undrawn credit facility - The company's estimated Bermuda Solvency Capital Requirement (BSCR) ratio was 223% as of Q2 2025, indicating a strong capital position[279] - The company has access to a $400.0 million senior unsecured revolving credit facility, with no borrowings outstanding as of June 30, 2025[281] Cash Flow Summary - H1 2025 vs H1 2024 (in millions) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(26.8) | $(91.1) | | Net cash provided by (used in) investing activities | $565.8 | $(61.7) | | Net cash used in financing activities | $(510.4) | $(224.5) | Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risks are interest rate and foreign currency exchange, with a 100 bp rate increase impacting portfolio value by $142.7 million Interest Rate Sensitivity on Debt Securities (in millions) | Change in Interest Rate | Estimated Pre-tax Change in Fair Value | | :--- | :--- | | +100 bp | $(142.7) | | -100 bp | $115.5 | - The company's main market risks are identified as interest rate risk and foreign currency exchange risk[317] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the period, June 30, 2025[324] - No material changes to the internal control over financial reporting were identified during the three months ended June 30, 2025[325] PART II. OTHER INFORMATION Item 1. Legal Proceedings Management believes no current legal proceedings are likely to have a material adverse effect on the company's financial condition - The Company is subject to lawsuits and regulatory actions in the normal course of business but believes no single proceeding will have a material adverse effect on its financial condition[327] Item 1A. Risk Factors Global inflation and changing tariff policies are identified as key risks that could adversely impact financial results and investment values - The company identifies heightened inflation and changing tariff policies as key risks that could adversely impact loss reserves, investment portfolio value, and overall financial results[329][330] Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities The company completed significant share repurchases in early 2025 and has $180.8 million remaining under its buyback authorization - The company repurchased 500,000 common shares from Daniel S. Loeb at $14.00 per share on February 27, 2025[333] - As of June 30, 2025, the company has approximately $180.8 million remaining under its share repurchase authorization[333]