Sirius International Insurance Group, Ltd. (Nasdaq: SG) (“Sirius
Group”, the “Company”, or the “Group”) today reported results for
the third quarter ended September 30, 2020. The Company
reported a comprehensive (loss) of $(67) million for the third
quarter of 2020 compared to a comprehensive (loss) of $(50) million
for the third quarter of 2019. The Company recorded $39 million of
pre-tax losses associated with the novel coronavirus (“COVID-19”),
net of reinsurance and additional premiums due. Catastrophe losses,
net of reinsurance and reinstatement premiums, were $53 million in
the quarter ended September 30, 2020, primarily related to
Hurricane Laura ($29 million), an August Midwest derecho ($11
million) and California wildfires ($10 million). Sirius Group
recorded a combined ratio of 115% for the quarter ended
September 30, 2020.
For the nine months ended September 30,
2020, the comprehensive (loss) was $(202) million compared to
comprehensive income of $34 million for the nine months ended
September 30, 2019. For the nine months ended
September 30, 2020, the Company recorded COVID-19 losses of
$192 million, net of reinsurance and additional premiums due.
Catastrophe losses, net of reinsurance and reinstatement premiums,
were $72 million in the nine months ended September 30, 2020.
Sirius Group recorded a combined ratio of 113% for the nine months
ended September 30, 2020.
Book value per common share was $12.66 as of
September 30, 2020 compared to $13.18 as of June 30, 2020 and
$14.23 as of December 31, 2019, a decrease of 3.9% for the
quarter and 11.0% for the nine months ended September 30,
2020. Tangible book value per common share(1) was $7.89 as of
September 30, 2020 compared to $8.39 as of June 30, 2020 and
$9.39 as of December 31, 2019, a decrease of 6.0% for the
quarter and 16.0% for the nine months ended September 30,
2020.
“It was an active quarter for catastrophes and
COVID-19 continues to impact our world. We remain proactive in our
support of our clients as they face, endure and surmount these
challenges,” said Kip Oberting, President and Chief Executive
Officer of Sirius Group. "We have taken actions over the past ten
months to optimize our portfolio more aggressively than at any
other time over the last decade. The benefits of these actions
began to materialize in the third quarter with lighter catastrophe
losses than Sirius Group would have experienced without such
actions. Looking ahead, the full extent of these optimizations have
yet to materialize. More significantly, market demand for our
capacity is increasing, which is driving terms and conditions to
become much more appropriate than they had been during the past few
years."
Mr. Oberting continued, "Equally important, the
successful completion of our strategic review process preserved
Sirius Group’s franchise. Upon closing of the pending merger,
our underwriting teams are poised to go on offense on behalf of a
larger balance sheet — at just the right time in the market cycle.
We are headed to a sweet spot. Finally.”
- Net (loss) attributable to common shareholders for the third
quarter of 2020 was $(96) million. Basic and diluted earnings per
common share were $(0.83). This compares to net (loss) attributable
to common shareholders of $(3) million and basic and diluted
earnings per common share of $(0.02) and $(0.06), respectively, for
the third quarter of 2019.
(1) Tangible book value per common share is a
non-GAAP financial measure. See accompanying Reconciliation of
Non-GAAP Financial Measures.
- For the nine months ended September 30, 2020, net (loss)
attributable to common shareholders was $(207) million. Basic
earnings per common share was $(1.80) and diluted earnings per
common share was $(1.83). This compares to net income attributable
to common shareholders of $99 million and basic and diluted
earnings per common share of $0.78 for the nine months ended
September 30, 2019.
- For the third quarter of 2020, Operating (loss) attributable to
common shareholders(2) was $(101) million compared to Operating
(loss) attributable to common shareholders of $(65) million for the
third quarter of 2019. For the nine months ended September 30,
2020, Operating (loss) attributable to common shareholders was
$(218) million compared to Operating (loss) attributable to common
shareholders of $(66) million for the same period in 2019.
Chief Financial Officer, Ralph Salamone also
commented, “The 115% combined ratio during the quarter was impacted
by catastrophe losses and $39 million in losses related to COVID-19
during the quarter, primarily driven by a resurgence of infections
in the United States. The total return on investments helped to
partially offset the underwriting result.”
Third Quarter and Year to Date 2020
Summary
Underwriting
Sirius Group’s combined ratio was 115% for the
third quarter of 2020 compared to 123% for the third quarter of
2019. The improvement in the combined ratio was mainly driven by
lower catastrophe losses, partially offset by COVID-19 pandemic
losses (11 points), net of reinsurance and additional premiums due.
The third quarter of 2020 included $53 million or 14 points of
catastrophe losses, net of reinsurance and reinstatement premiums,
compared to $109 million or 29 points for the third quarter of
2019.
- Gross written premiums for the third quarter of 2020 were $356
million and decreased 14% compared to the third quarter of 2019
primarily due to COVID-19 and client reaction to Sirius Group's
rating downgrade.
- Results by reportable segment(3) for the third quarter of 2020
include the following:
- Global Reinsurance produced a $(36) million underwriting loss
and a 115% combined ratio. The results included $6 million of
losses from the COVID-19 pandemic. Third quarter catastrophe
losses, net of reinsurance and reinstatement premiums, were $53
million, as discussed above. Additionally, third quarter losses
included $14 million from the August Beirut explosion.
- Global A&H produced an $(8) million underwriting (loss),
including net service fee income from Armada and IMG of $5 million,
and a combined ratio of 112%. These results included $31 million of
losses from the COVID-19 pandemic.
For the nine months ended September 30, 2020,
Sirius Group’s combined ratio was 113% compared to 107% for the
nine months ended September 30, 2019. Our underwriting results in
the first nine months of 2020 were significantly impacted by the
COVID-19 pandemic. We recorded $192 million of estimated ultimate
losses (16 loss ratio points) in our underwriting results with $136
million in the Global Reinsurance, $53 million in the Global
A&H, and $3 million in the U.S. Specialty segments. The first
nine months of 2020 included 6 points of catastrophe losses, net of
reinsurance and reinstatement premiums, compared to 11 points for
the same period in 2019. The first nine months of 2020 also
included minimal (less than a point) net unfavorable prior year
loss reserve development compared to 8 points of net unfavorable
prior year loss development for the same period in 2019.
- Gross written premiums for the first nine months of 2020 were
$1,496 million and decreased 2% compared to the first nine months
of 2019 primarily due to COVID-19 and client reaction to Sirius
Group's rating downgrade.
(2) Operating (loss) attributable to common
shareholders is a non-GAAP financial measure. See accompanying
Reconciliation of Non-GAAP Financial Measures.(3) Effective January
1, 2020 Sirius Group implemented an internal reorganization which
changed its reportable segments. Where applicable, all prior
periods presented have been revised to conform to this new
presentation.
- Highlights by reportable segment for the first nine months of
2020 include the following:
- Global Reinsurance produced an $(122) million underwriting
(loss) and a 117% combined ratio driven mainly by $136 million of
losses from the COVID-19 pandemic. COVID-19 losses contributed 19
points to the combined ratio. Year to date catastrophe losses, net
of reinsurance and reinstatement premiums, were $72 million and
primarily related to Hurricane Laura ($29 million), an August
Midwest derecho ($11 million) and California wildfires ($10
million). Additionally, year to date losses included $14 million
from the Beirut explosion. Net unfavorable prior year development
for the nine months ended September 30, 2020 was $15 million
as unfavorable prior year loss reserve development in Other
Property ($22 million), Aviation & Space ($10 million), and
Casualty Reinsurance ($9 million) was partially offset by favorable
prior year loss reserve development in Property Catastrophe Excess
Reinsurance ($23 million). Additionally, losses from weather
derivatives, included in Other revenues, for the first nine months
of 2020 were $(22) million driven mainly by a relatively warm U.S.
and European winter.
- Global A&H produced $8 million of underwriting income,
including net service fee income from Armada and IMG of $17
million, and a combined ratio of 103%. These results included $53
million of losses from the COVID-19 pandemic. In addition, there
was $8 million of net favorable prior year loss reserve development
and $4 million of drag from the Group’s build out of Armada
Health.
- U.S. Specialty produced a $(7) million underwriting (loss) and
a 116% combined ratio.
Investments and Other
- During the third quarter of 2020, the investment portfolio
returned 1.8% in original currencies and 2.2% in U.S. Dollars.
- Total investment results for the third quarter of 2020, which
includes the sum of net investment income, net realized and
unrealized investment gains (losses) in net income, and change in
foreign currency translation on investments recognized through
other comprehensive income, were $74 million, compared to $24
million in the third quarter of 2019, an increase of $50
million. Included in the third quarter investment results are
foreign exchange gains of $17 million in 2020 compared to foreign
exchange (losses) of $(20) million in 2019.
- For the first nine months of 2020, the investment portfolio
returned 2.3% in original currencies and 2.6% in U.S. Dollars.
- Total investment results for the first nine months of 2020 were
$94 million, compared to $141 million for the first nine months of
2019, a decrease of $47 million. Included in the first nine
months investment results are foreign exchange gains of $20 million
in 2020 compared to foreign exchange (losses) of $(23) million in
2019.
- During the third quarter of 2020, the Company incurred $10
million of various legal, advisory, and other consulting costs
associated with the previously announced Agreement and Plan of
Merger, by and among the Company, Third Point Reinsurance Ltd.
("TPRE"), and Yoga Merger Sub Limited, a wholly owned subsidiary of
TPRE. As part of the amount incurred, $2 million is related to
reimbursement of certain expenses of CM Bermuda Limited and CMIG
International Holding Pte. Ltd. pursuant to the Transaction Matters
Letter Agreement entered into on August 6, 2020, among Sirius
Group, TPRE, CM Bermuda Limited and CMIG International Holding Pte.
Ltd.
- Common shareholders’ equity ended the third quarter of 2020 at
$1,459 million compared to $1,640 million at December 31,
2019. The decrease is primarily due to a comprehensive (loss) of
$(202) million.
Supplemental Materials
In addition to this press release, we have
provided supplemental financial information relating to third
quarter results. Readers are encouraged to visit the “Financial
Information” section of Sirius Group’s website located at
http://ir.siriusgroup.com to view the supplemental financial
information.
Non-GAAP Financial Measures
In presenting Sirius Group’s results, management
has included and discussed non-GAAP financial measures: Tangible
book value, Tangible book value per common share and Operating
(loss) attributable to common shareholders. The Company believes
that these non-GAAP financial measures, which may be defined and
calculated differently by other companies, better explain and
enhance the understanding of the Company’s results of operations.
However, these measures should not be viewed as a substitute for
those determined in accordance with generally accepted accounting
principles in the United States of America (‘‘GAAP’’). A
reconciliation of Tangible book value, Tangible book value per
common share and Operating (loss) attributable to common
shareholders, to the most comparable GAAP measures is included in
the attached financial information.
About Sirius Group
Sirius Group, with $2.4 billion of total capital
and roots dating back to 1945, is a global multi-line (re)insurer
headquartered in Bermuda with a unique global branch network,
including offices in Stockholm, New York and London. Sirius
Group’s success over the years has come from working with honest,
capable partners. Sirius Group provides a fully diversified
set of tailored risk products to clients in approximately 150
countries, including health and travel products to consumers
through its two managing general underwriters, ArmadaCorp Capital,
LLC and International Medical Group, Inc. Sirius Group has
been publicly traded since November 2018. You can learn more
by visiting www.siriusgroup.com.
Cautionary Note Regarding
Forward-Looking Statements
We have made statements in this press release
that are forward-looking statements within the meaning of the
federal securities laws, including the Private Securities
Litigation Reform Act of 1995, including statements about the
optimization of Sirius Group's portfolio, market demand for Sirius
Group's capacity, improved terms and conditions, the size of
Sirius Group's balance sheet, the closing of the merger transaction
and the preservation of Sirius Group's franchise. You can identify
forward-looking statements by the use of forward-looking
terminology such as “plan,” “believe,” “expect,” “anticipate,”
“intend,” “outlook,” “estimate,” “forecast,” “project,” “target,”
“continue,” “could,” “may,” “might,” “will,” “possible,”
“potential,” “predict,” “should,” “would,” “seeks,” “likely,” and
other similar words and expressions, but the absence of these words
does not mean that a statement is not forward-looking. The
forward-looking statements are based on the current expectations of
the management of Sirius Group and speak only as of the date of
this press release. There can be no assurance that future
developments will be those that have been anticipated. These
forward-looking statements involve a number of risks, uncertainties
or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to, the continued impact of the COVID-19
pandemic on Sirius Group’s business, operations and loss reserve
estimates; the effect of judicial, legislative, and regulatory
actions to address and contain the impact of COVID-19; the
uncertainty as to the estimate of ultimate industry loss claims;
the general economic conditions and market conditions in the
markets in which Sirius Group operates; Sirius Group’s exposure to
unpredictable catastrophic and casualty events and unexpected
accumulations of attritional losses; increased competition from
existing insurers and reinsurers and from alternative capital
providers, such as insurance-linked funds and collateralized
special purpose insurers; decreased demand for Sirius Group’s
insurance or reinsurance products, consolidation and cyclical
changes in the insurance and reinsurance industry; the inherent
uncertainty of estimating loss and loss adjustment expenses
reserves, including asbestos and environmental reserves, and the
possibility that such reserves may be inadequate to cover Sirius
Group’s ultimate liability for losses; a decline in or withdrawal
of Sirius Group’s operating subsidiaries’ ratings with rating
agencies; the exposure of Sirius Group’s investments to interest
rate, credit, equity risks and market volatility, which may limit
Sirius Group’s net income and may affect the adequacy of its
capital and liquidity; losses related to cyber-attacks on Sirius
Group’s information technology systems; the impact of various risks
associated with transacting business in foreign countries,
including foreign currency exchange-rate risk and political risks
on investments in, and revenues from, Sirius Group’s operations
outside the U.S.; the possibility that Sirius Group may become
subject to additional onerous governmental or regulatory
requirements or fail to comply with applicable regulatory and
solvency requirements; Sirius Group’s significant deferred tax
assets may become materially impaired as a result of insufficient
taxable income or a reduction in applicable corporate tax rates or
other change in applicable tax law; a decrease in the fair value of
Global A&H and/or Sirius Group’s intangible assets may result
in future impairments; the limited liquidity and trading of Sirius
Group’s securities; China Minsheng Investment Group Corp., Ltd.
("CMIG") and CMIG International Holding Pte. Ltd.’s status as a
direct and indirect majority shareholder, including their
affiliates' liquidity issues, and actions taken by CMIG, CMIG
International Holding Pte. Ltd or any other parties in interest in
connection with such liquidity issues including ownership changes;
Sirius Group’s status as a publicly traded company, foreign private
issuer and controlled company; the consequences of the written
resolution of Sirius Group’s majority shareholder which may
prohibit the Board of Sirius Group from issuing any form of equity
without shareholder approval; the impact of lawsuits initiated by
minority shareholders, including lawsuits claiming that they are
being unfairly oppressed by Sirius Group’s majority shareholder or
lawsuits claiming a right of redemption of the Series B preference
shares; the satisfaction or waiver of the conditions precedent to
the consummation of the proposed transactions described in an
Agreement and Plan of Merger entered into by and among the Company,
TPRE and Yoga Merger Sub Limited dated August 6, 2020 and the terms
and conditions included in a statutory merger agreement
(collectively, the "Transactions"), including, without limitation,
the receipt of shareholder and regulatory approvals (including
approvals, authorizations and clearance by antitrust authorities
and insurance regulators necessary to complete such proposed
Transactions) on the terms desired or anticipated (and the risk
that such approvals may result in the imposition of conditions that
could adversely affect the combined company or the expected
benefits of such proposed Transactions); unanticipated difficulties
or expenditures relating to such proposed Transactions; risks
relating to the value of the shares of TPRE to be issued in such
proposed Transactions; unanticipated negative reactions of rating
agencies in response to such proposed Transactions; disruptions of
the Company’s and TPRE’s current plans, operations and
relationships with third persons caused by the announcement and
pendency of such proposed Transactions, including, without
limitation, the ability of the combined company to hire and retain
any personnel; legal proceedings that may be instituted against the
Company and TPRE following announcement of such proposed
Transactions; and other risks identified in Sirius Group’s Annual
Report on Form 10-K for the year ended December 31, 2019,
subsequent Quarterly Reports on Form 10-Q and other filings with
the U.S. Securities and Exchange Commission. Should one or more of
these risks or uncertainties materialize, or should any of the
assumptions made by the management of Sirius Group prove incorrect,
actual results may vary in material respects from those projected
in these forward-looking statements. Except as required by
applicable law or regulation, we disclaim any obligation to
publicly update or revise any forward-looking statement to reflect
changes in underlying assumptions or factors, or new information,
data or methods, future events or other circumstances after the
date of this release.
Contact:Sirius
Group Investor
Relationsinvestor.relations@siriusgroup.com(212) 312-2525
Sirius International Insurance Group,
Ltd.Consolidated Balance SheetsAs
at September 30, 2020 and December 31, 2019
(Expressed in millions of U.S. dollars, except share
information) |
September 30, 2020 |
December 31, 2019 |
|
Unaudited |
|
Assets |
|
|
Fixed maturity investments,
trading, at fair value (Amortized cost 2020: $1,932.7; 2019:
$1,656.6) |
$ |
1,958.9 |
|
$ |
1,681.0 |
|
Short-term investments, at
fair value (Amortized cost 2020: $1,145.4; 2019: $1,090.8) |
1,132.6 |
|
1,085.2 |
|
Equity securities, trading, at
fair value (Cost 2020: $170.0; 2019: $379.2) |
158.7 |
|
405.2 |
|
Other long-term investments,
at fair value (Cost 2020: $327.5; 2019: $315.4) |
388.0 |
|
346.8 |
|
Cash |
168.4 |
|
136.3 |
|
Restricted cash |
15.8 |
|
14.3 |
|
Total investments and
cash |
3,822.4 |
|
3,668.8 |
|
Accrued investment income |
8.9 |
|
11.2 |
|
Insurance and reinsurance
premiums receivable |
789.0 |
|
730.1 |
|
Reinsurance recoverable on
unpaid losses |
482.5 |
|
410.3 |
|
Reinsurance recoverable on
paid losses |
70.4 |
|
73.9 |
|
Funds held by ceding
companies |
244.1 |
|
293.9 |
|
Ceded unearned insurance and
reinsurance premiums |
172.5 |
|
162.0 |
|
Deferred acquisition
costs |
145.2 |
|
148.2 |
|
Deferred tax asset |
158.4 |
|
166.7 |
|
Accounts receivable on
unsettled investment sales |
19.1 |
|
6.7 |
|
Goodwill |
400.8 |
|
400.8 |
|
Intangible assets |
168.0 |
|
179.8 |
|
Other assets |
151.5 |
|
161.4 |
|
Total assets |
$ |
6,632.8 |
|
$ |
6,413.8 |
|
Liabilities |
|
|
Loss and loss adjustment expense
reserves |
$ |
2,672.9 |
|
$ |
2,331.5 |
|
Unearned insurance and
reinsurance premiums |
759.4 |
|
708.0 |
|
Ceded reinsurance payable |
270.3 |
|
244.7 |
|
Funds held under reinsurance
treaties |
156.5 |
|
169.1 |
|
Deferred tax liability |
213.6 |
|
205.9 |
|
Debt |
695.8 |
|
685.2 |
|
Accounts payable on unsettled
investment purchases |
29.9 |
|
2.3 |
|
Other liabilities |
175.9 |
|
201.3 |
|
Total
liabilities |
4,974.3 |
|
4,548.0 |
|
Commitments and
contingencies |
|
|
Mezzanine
equity |
|
|
Series B preference
shares |
197.5 |
|
223.0 |
|
Common shareholders'
equity |
|
|
Common shares (shares issued and
outstanding, 2020 & 2019: 115,299,341) |
1.2 |
|
1.2 |
|
Additional paid-in surplus |
1,099.9 |
|
1,098.2 |
|
Retained earnings |
564.5 |
|
778.5 |
|
Accumulated other comprehensive
(loss) |
(206.4 |
) |
(237.5 |
) |
Total common
shareholders' equity |
1,459.2 |
|
1,640.4 |
|
Non-controlling
interests |
1.8 |
|
2.4 |
|
Total equity |
1,461.0 |
|
1,642.8 |
|
Total liabilities, mezzanine equity, and
equity |
$ |
6,632.8 |
|
$ |
6,413.8 |
|
Sirius International Insurance Group,
Ltd.Consolidated Statements of (Loss) Income
(Unaudited)For the three and nine months ended
September 30, 2020 and 2019
|
Three months ended September 30, |
Nine months ended September 30, |
(Expressed in millions of U.S. dollars, except share and per share
information) |
2020 |
2019 |
2020 |
2019 |
Revenues |
|
|
|
|
Net earned insurance and
reinsurance premiums |
$ |
372.6 |
|
$ |
374.2 |
|
$ |
1,177.1 |
|
$ |
1,056.8 |
|
Net investment income |
1.7 |
|
22.8 |
|
30.0 |
|
67.3 |
|
Net realized investment
gains |
(3.8 |
) |
15.3 |
|
23.6 |
|
39.9 |
|
Net unrealized investment
gains (losses) |
31.2 |
|
53.9 |
|
(3.9 |
) |
143.4 |
|
Net foreign exchange (losses)
gains |
(21.3 |
) |
4.9 |
|
(18.9 |
) |
9.4 |
|
Other revenue |
15.8 |
|
16.3 |
|
30.3 |
|
51.3 |
|
Total revenues |
396.2 |
|
487.4 |
|
1,238.2 |
|
1,368.1 |
|
Expenses |
|
|
|
|
Loss and loss adjustment
expenses |
305.4 |
|
348.6 |
|
972.8 |
|
810.5 |
|
Insurance and reinsurance
acquisition expenses |
83.6 |
|
75.1 |
|
236.4 |
|
215.4 |
|
Other underwriting
expenses |
41.3 |
|
35.4 |
|
115.6 |
|
106.2 |
|
General and administrative
expenses |
34.4 |
|
28.0 |
|
90.4 |
|
80.6 |
|
Intangible asset amortization
expenses |
3.9 |
|
3.9 |
|
11.8 |
|
11.8 |
|
Interest expense on debt |
8.1 |
|
7.7 |
|
23.8 |
|
23.3 |
|
Total expenses |
476.7 |
|
498.7 |
|
1,450.8 |
|
1,247.8 |
|
Pre-tax (loss)
income |
(80.5 |
) |
(11.3 |
) |
(212.6 |
) |
120.3 |
|
Income tax (expense)
benefit |
(23.5 |
) |
3.7 |
|
(19.9 |
) |
(15.6 |
) |
Net (loss)
income |
(104.0 |
) |
(7.6 |
) |
(232.5 |
) |
104.7 |
|
(Income) attributable to
non-controlling interests |
(0.2 |
) |
(0.4 |
) |
(0.2 |
) |
(1.6 |
) |
(Loss) income
attributable to Sirius Group |
(104.2 |
) |
(8.0 |
) |
(232.7 |
) |
103.1 |
|
Change in carrying value of
Series B preference shares |
8.7 |
|
5.3 |
|
25.5 |
|
(3.9 |
) |
Net (loss) income attributable to Sirius Group's common
shareholders |
$ |
(95.5 |
) |
$ |
(2.7 |
) |
$ |
(207.2 |
) |
$ |
99.2 |
|
|
|
|
|
|
Net (loss) income per
common share and common share equivalent |
|
|
|
|
Basic earnings per common
share and common share equivalent |
$ |
(0.83 |
) |
$ |
(0.02 |
) |
$ |
(1.80 |
) |
$ |
0.78 |
|
Diluted earnings per common
share and common share equivalent |
$ |
(0.83 |
) |
$ |
(0.06 |
) |
$ |
(1.83 |
) |
$ |
0.78 |
|
Weighted average
number of common shares and common share equivalents
outstanding: |
|
|
|
|
Basic weighted average number
of common shares and common share equivalents outstanding |
115,297,945 |
|
115,251,853 |
|
115,279,197 |
|
115,225,942 |
|
Diluted weighted average
number of common shares and common share equivalents
outstanding |
115,297,945 |
|
127,153,523 |
|
127,180,867 |
|
115,619,222 |
|
Sirius International Insurance Group,
Ltd.Consolidated Statements of Comprehensive
(Loss) Income (Unaudited)For the three and nine
months ended September 30, 2020 and 2019
|
Three months
ended September 30, |
Nine months
ended September 30, |
(Expressed in millions of U.S. dollars) |
2020 |
2019 |
2020 |
2019 |
Comprehensive (loss)
income |
|
|
|
|
Net (loss) income |
$ |
(104.0 |
) |
$ |
(7.6 |
) |
$ |
(232.5 |
) |
$ |
104.7 |
|
Other comprehensive
income (loss) |
|
|
|
|
Change in foreign currency
translation, net of tax |
37.5 |
|
(42.3 |
) |
31.1 |
|
(69.0 |
) |
Total other
comprehensive income (loss) |
37.5 |
|
(42.3 |
) |
31.1 |
|
(69.0 |
) |
Comprehensive (loss)
income |
(66.5 |
) |
(49.9 |
) |
(201.4 |
) |
35.7 |
|
Net (income) attributable to
non-controlling interests |
(0.2 |
) |
(0.4 |
) |
(0.2 |
) |
(1.6 |
) |
Comprehensive (loss) income attributable to Sirius
Group |
$ |
(66.7 |
) |
$ |
(50.3 |
) |
$ |
(201.6 |
) |
$ |
34.1 |
|
Sirius International Insurance Group,
Ltd.Consolidated Underwriting Results by
Segment
|
Three months ended September 30, 2020 |
(Expressed in millions of U.S.
dollars) |
Global Reinsurance |
Global A&H |
U.S. Specialty |
Runoff & Other |
Corporate Eliminations |
Total |
Gross written
premiums |
$ |
248.2 |
|
|
$ |
88.8 |
|
|
$ |
22.6 |
|
|
$ |
(3.6 |
) |
|
$ |
— |
|
|
$ |
356.0 |
|
|
Net written premiums |
$ |
192.2 |
|
|
$ |
72.2 |
|
|
$ |
20.5 |
|
|
$ |
(2.6 |
) |
|
$ |
— |
|
|
$ |
282.3 |
|
|
Net earned insurance and reinsurance premiums |
$ |
243.5 |
|
|
$ |
114.3 |
|
|
$ |
17.2 |
|
|
$ |
(2.4 |
) |
|
$ |
— |
|
|
$ |
372.6 |
|
|
Loss and allocated LAE |
(194.5 |
) |
|
(84.6 |
) |
|
(11.1 |
) |
|
(1.1 |
) |
|
— |
|
|
(291.3 |
) |
|
Insurance and reinsurance acquisition expenses |
(51.8 |
) |
|
(36.6 |
) |
|
(4.0 |
) |
|
(0.8 |
) |
|
9.6 |
|
|
(83.6 |
) |
|
Technical (loss) profit |
(2.8 |
) |
|
(6.9 |
) |
|
2.1 |
|
|
(4.3 |
) |
|
9.6 |
|
|
(2.3 |
) |
|
Unallocated LAE |
(7.7 |
) |
|
(0.5 |
) |
|
(0.2 |
) |
|
(1.0 |
) |
|
(4.7 |
) |
|
(14.1 |
) |
|
Other underwriting expenses |
(25.3 |
) |
|
(5.7 |
) |
|
(4.3 |
) |
|
(1.3 |
) |
|
(4.7 |
) |
|
(41.3 |
) |
|
Underwriting (loss) income |
(35.8 |
) |
|
(13.1 |
) |
|
(2.4 |
) |
|
(6.6 |
) |
|
0.2 |
|
|
(57.7 |
) |
|
Service fee revenue |
— |
|
|
26.3 |
|
|
— |
|
|
0.9 |
|
|
(10.7 |
) |
|
16.5 |
|
|
Managing general underwriter unallocated LAE |
— |
|
|
(5.8 |
) |
|
— |
|
|
— |
|
|
5.8 |
|
|
— |
|
|
Managing general underwriter other underwriting expenses |
— |
|
|
(4.7 |
) |
|
— |
|
|
— |
|
|
4.7 |
|
|
— |
|
|
General and administrative expenses, MGU + Runoff &
Other |
— |
|
|
(11.0 |
) |
|
— |
|
|
(0.9 |
) |
|
— |
|
|
(11.9 |
) |
|
Underwriting (loss), including net service fee
income |
$ |
(35.8 |
) |
|
$ |
(8.3 |
) |
|
$ |
(2.4 |
) |
|
$ |
(6.6 |
) |
|
$ |
— |
|
|
$ |
(53.1 |
) |
|
|
|
|
|
|
|
|
Underwriting Ratios (1) (2) |
|
|
|
|
|
|
Loss ratio |
83.0 |
|
% |
74.5 |
|
% |
65.7 |
|
% |
NM |
|
|
NM |
|
|
82.0 |
|
% |
Acquisition expense ratio |
21.3 |
|
% |
32.0 |
|
% |
23.3 |
|
% |
NM |
|
|
NM |
|
|
22.4 |
|
% |
Other underwriting expense ratio |
10.4 |
|
% |
5.0 |
|
% |
25.0 |
|
% |
NM |
|
|
NM |
|
|
11.1 |
|
% |
Combined ratio |
114.7 |
|
% |
111.5 |
|
% |
114.0 |
|
% |
NM |
|
|
NM |
|
|
115.5 |
|
% |
|
|
|
|
|
|
|
(1) Underwriting ratios are calculated by dividing
the related expense by net earned insurance and reinsurance
premiums. |
(2) Ratios considered not meaningful (“NM”) to
Runoff & Other and Corporate Eliminations. |
Sirius International Insurance Group,
Ltd.Consolidated Underwriting Results by
Segment
|
Nine months ended September 30, 2020 |
(Expressed in millions of U.S.
dollars) |
Global Reinsurance |
Global A&H |
U.S. Specialty |
Runoff & Other |
Corporate Eliminations |
Total |
Gross written
premiums |
$ |
927.0 |
|
|
$ |
434.6 |
|
|
$ |
68.9 |
|
|
$ |
65.7 |
|
|
$ |
— |
|
|
$ |
1,496.2 |
|
|
Net written premiums |
$ |
758.1 |
|
|
$ |
334.9 |
|
|
$ |
59.5 |
|
|
$ |
65.7 |
|
|
$ |
— |
|
|
$ |
1,218.2 |
|
|
Net earned insurance and reinsurance premiums |
$ |
719.4 |
|
|
$ |
345.4 |
|
|
$ |
45.2 |
|
|
$ |
67.1 |
|
|
$ |
— |
|
|
$ |
1,177.1 |
|
|
Loss and allocated LAE |
(600.2 |
) |
|
(234.5 |
) |
|
(29.2 |
) |
|
(61.2 |
) |
|
— |
|
|
(925.1 |
) |
|
Insurance and reinsurance acquisition expenses |
(156.4 |
) |
|
(98.9 |
) |
|
(10.4 |
) |
|
(0.9 |
) |
|
30.2 |
|
|
(236.4 |
) |
|
Technical (loss) profit |
(37.2 |
) |
|
12.0 |
|
|
5.6 |
|
|
5.0 |
|
|
30.2 |
|
|
15.6 |
|
|
Unallocated LAE |
(17.9 |
) |
|
(2.8 |
) |
|
(0.4 |
) |
|
(11.8 |
) |
|
(14.8 |
) |
|
(47.7 |
) |
|
Other underwriting expenses |
(67.1 |
) |
|
(18.0 |
) |
|
(12.4 |
) |
|
(3.7 |
) |
|
(14.4 |
) |
|
(115.6 |
) |
|
Underwriting (loss) income |
(122.2 |
) |
|
(8.8 |
) |
|
(7.2 |
) |
|
(10.5 |
) |
|
1.0 |
|
|
(147.7 |
) |
|
Service fee revenue |
— |
|
|
85.3 |
|
|
— |
|
|
0.9 |
|
|
(33.4 |
) |
|
52.8 |
|
|
Managing general underwriter unallocated LAE |
— |
|
|
(18.0 |
) |
|
— |
|
|
— |
|
|
18.0 |
|
|
— |
|
|
Managing general underwriter other underwriting expenses |
— |
|
|
(14.4 |
) |
|
— |
|
|
— |
|
|
14.4 |
|
|
— |
|
|
General and administrative expenses, MGU + Runoff &
Other |
— |
|
|
(36.2 |
) |
|
— |
|
|
(3.8 |
) |
|
— |
|
|
(40.0 |
) |
|
Underwriting (loss) income, including net service fee
income |
$ |
(122.2 |
) |
|
$ |
7.9 |
|
|
$ |
(7.2 |
) |
|
$ |
(13.4 |
) |
|
$ |
— |
|
|
$ |
(134.9 |
) |
|
|
|
|
|
|
|
|
Underwriting Ratios (1) (2) |
|
|
|
|
|
|
Loss ratio |
85.9 |
|
% |
68.7 |
|
% |
65.5 |
|
% |
NM |
|
|
NM |
|
|
82.6 |
|
% |
Acquisition expense ratio |
21.7 |
|
% |
28.6 |
|
% |
23.0 |
|
% |
NM |
|
|
NM |
|
|
20.1 |
|
% |
Other underwriting expense ratio |
9.3 |
|
% |
5.2 |
|
% |
27.4 |
|
% |
NM |
|
|
NM |
|
|
9.8 |
|
% |
Combined ratio |
116.9 |
|
% |
102.5 |
|
% |
115.9 |
|
% |
NM |
|
|
NM |
|
|
112.5 |
|
% |
|
|
|
|
|
|
|
(1) Underwriting ratios are calculated by dividing
the related expense by net earned insurance and reinsurance
premiums. |
(2) Ratios considered not meaningful (“NM”) to
Runoff & Other and Corporate Eliminations. |
Sirius International Insurance Group,
Ltd.Consolidated Underwriting Results by
Segment
|
Three months ended September 30, 2019 |
(Expressed in millions of U.S.
dollars) |
Global Reinsurance |
Global A&H |
U.S. Specialty |
Runoff & Other |
Corporate Eliminations |
Total |
Gross written
premiums |
$ |
256.3 |
|
|
$ |
137.4 |
|
|
$ |
17.9 |
|
|
$ |
2.1 |
|
|
$ |
— |
|
|
$ |
413.7 |
|
|
Net written premiums |
$ |
202.6 |
|
|
$ |
104.6 |
|
|
$ |
14.3 |
|
|
$ |
0.8 |
|
|
$ |
— |
|
|
$ |
322.3 |
|
|
Net earned insurance and reinsurance premiums |
$ |
249.5 |
|
|
$ |
115.1 |
|
|
$ |
9.1 |
|
|
$ |
0.5 |
|
|
$ |
— |
|
|
$ |
374.2 |
|
|
Loss and allocated LAE |
(261.7 |
) |
|
(63.6 |
) |
|
(8.2 |
) |
|
(0.9 |
) |
|
— |
|
|
(334.4 |
) |
|
Insurance and reinsurance acquisition expenses |
(54.3 |
) |
|
(32.5 |
) |
|
(2.0 |
) |
|
(0.1 |
) |
|
13.8 |
|
|
(75.1 |
) |
|
Technical (loss) profit |
(66.5 |
) |
|
19.0 |
|
|
(1.1 |
) |
|
(0.5 |
) |
|
13.8 |
|
|
(35.3 |
) |
|
Unallocated LAE |
(8.4 |
) |
|
(2.0 |
) |
|
(0.1 |
) |
|
(0.2 |
) |
|
(3.5 |
) |
|
(14.2 |
) |
|
Other underwriting expenses |
(20.8 |
) |
|
(6.8 |
) |
|
(2.7 |
) |
|
(1.4 |
) |
|
(3.7 |
) |
|
(35.4 |
) |
|
Underwriting (loss) income |
(95.7 |
) |
|
10.2 |
|
|
(3.9 |
) |
|
(2.1 |
) |
|
6.6 |
|
|
(84.9 |
) |
|
Service fee revenue |
— |
|
|
31.0 |
|
|
— |
|
|
— |
|
|
(14.6 |
) |
|
16.4 |
|
|
Managing general underwriter unallocated LAE |
— |
|
|
(4.3 |
) |
|
— |
|
|
— |
|
|
4.3 |
|
|
— |
|
|
Managing general underwriter other underwriting expenses |
— |
|
|
(3.7 |
) |
|
— |
|
|
— |
|
|
3.7 |
|
|
— |
|
|
General and administrative expenses, MGU + Runoff &
Other |
— |
|
|
(15.1 |
) |
|
— |
|
|
(1.2 |
) |
|
— |
|
|
(16.3 |
) |
|
Underwriting (loss) income, including net service fee
income |
$ |
(95.7 |
) |
|
$ |
18.1 |
|
|
$ |
(3.9 |
) |
|
$ |
(3.3 |
) |
|
$ |
— |
|
|
$ |
(84.8 |
) |
|
|
|
|
|
|
|
|
Underwriting Ratios (1) (2) |
|
|
|
|
|
|
Loss ratio |
108.3 |
|
% |
57.0 |
|
% |
91.2 |
|
% |
NM |
NM |
93.2 |
|
% |
Acquisition expense ratio |
21.8 |
|
% |
28.2 |
|
% |
22.0 |
|
% |
NM |
NM |
20.1 |
|
% |
Other underwriting expense ratio |
8.3 |
|
% |
5.9 |
|
% |
29.7 |
|
% |
NM |
NM |
9.5 |
|
% |
Combined ratio |
138.4 |
|
% |
91.1 |
|
% |
142.9 |
|
% |
NM |
NM |
122.8 |
|
% |
|
|
|
|
|
|
|
(1) Underwriting ratios are calculated by dividing
the related expense by net earned insurance and reinsurance
premiums. |
(2) Ratios considered not meaningful (“NM”) to
Runoff & Other and Corporate Eliminations. |
Sirius International Insurance Group,
Ltd.Consolidated Underwriting Results by
Segment
|
Nine months ended September 30, 2019 |
(Expressed in millions of U.S.
dollars) |
Global Reinsurance |
Global A&H |
U.S. Specialty |
Runoff & Other |
Corporate Eliminations |
Total |
Gross written
premiums |
$ |
1,008.4 |
|
|
$ |
459.5 |
|
|
$ |
50.5 |
|
|
$ |
4.7 |
|
|
$ |
— |
|
|
$ |
1,523.1 |
|
|
Net written premiums |
$ |
805.2 |
|
|
$ |
360.1 |
|
|
$ |
42.0 |
|
|
$ |
1.5 |
|
|
$ |
— |
|
|
$ |
1,208.8 |
|
|
Net earned insurance and reinsurance premiums |
$ |
705.7 |
|
|
$ |
330.0 |
|
|
$ |
19.9 |
|
|
$ |
1.2 |
|
|
$ |
— |
|
|
$ |
1,056.8 |
|
|
Loss and allocated LAE |
(558.0 |
) |
|
(198.6 |
) |
|
(14.7 |
) |
|
(4.4 |
) |
|
— |
|
|
(775.7 |
) |
|
Insurance and reinsurance acquisition expenses |
(149.9 |
) |
|
(95.1 |
) |
|
(4.5 |
) |
|
(2.6 |
) |
|
36.7 |
|
|
(215.4 |
) |
|
Technical (loss) profit |
(2.2 |
) |
|
36.3 |
|
|
0.7 |
|
|
(5.8 |
) |
|
36.7 |
|
|
65.7 |
|
|
Unallocated LAE |
(17.1 |
) |
|
(5.5 |
) |
|
(0.2 |
) |
|
(0.9 |
) |
|
(11.1 |
) |
|
(34.8 |
) |
|
Other underwriting expenses |
(64.0 |
) |
|
(18.8 |
) |
|
(7.6 |
) |
|
(4.6 |
) |
|
(11.2 |
) |
|
(106.2 |
) |
|
Underwriting (loss) income |
(83.3 |
) |
|
12.0 |
|
|
(7.1 |
) |
|
(11.3 |
) |
|
14.4 |
|
|
(75.3 |
) |
|
Service fee revenue |
— |
|
|
97.6 |
|
|
— |
|
|
— |
|
|
(39.3 |
) |
|
58.3 |
|
|
Managing general underwriter unallocated LAE |
— |
|
|
(13.7 |
) |
|
— |
|
|
— |
|
|
13.7 |
|
|
— |
|
|
Managing general underwriter other underwriting expenses |
— |
|
|
(11.2 |
) |
|
— |
|
|
— |
|
|
11.2 |
|
|
— |
|
|
General and administrative expenses, MGU + Runoff &
Other |
— |
|
|
(46.3 |
) |
|
— |
|
|
(3.0 |
) |
|
— |
|
|
(49.3 |
) |
|
Underwriting (loss) income, including net service fee
income |
$ |
(83.3 |
) |
|
$ |
38.4 |
|
|
$ |
(7.1 |
) |
|
$ |
(14.3 |
) |
|
$ |
— |
|
|
$ |
(66.3 |
) |
|
|
|
|
|
|
|
|
Underwriting Ratios (1) (2) |
|
|
|
|
|
|
Loss ratio |
81.5 |
|
% |
61.8 |
|
% |
74.9 |
|
% |
NM |
|
|
NM |
|
|
76.7 |
|
% |
Acquisition expense ratio |
21.2 |
|
% |
28.8 |
|
% |
22.6 |
|
% |
NM |
|
|
NM |
|
|
20.4 |
|
% |
Other underwriting expense ratio |
9.1 |
|
% |
5.7 |
|
% |
38.2 |
|
% |
NM |
|
|
NM |
|
|
10.0 |
|
% |
Combined ratio |
111.8 |
|
% |
96.3 |
|
% |
135.7 |
|
% |
NM |
|
|
NM |
|
|
107.1 |
|
% |
|
|
|
|
|
|
|
(1) Underwriting ratios are calculated by dividing
the related expense by net earned insurance and reinsurance
premiums. |
(2) Ratios considered not meaningful (“NM”) to
Runoff & Other and Corporate Eliminations. |
Sirius International Insurance Group,
Ltd.Reconciliation of Non-GAAP Financial
Measures
Tangible book value and Tangible book
value per common share
Tangible book value and Tangible book value per
common share are non-GAAP financial measures. Tangible book value
and Tangible book value per common share are useful to investors
because they measure the realizable value of common shareholder
returns, excluding the impact of goodwill, intangible assets, and
net deferred liability on intangible assets.
Tangible book value is derived by subtracting
Goodwill, Intangible assets and Net deferred tax liability on
intangible assets from book value. Tangible book value per common
share is derived by dividing Tangible book value by the Common
shares outstanding.
The reconciliation to Total common shareholders’
equity and Book value per common share, the most directly
comparable GAAP measures, are presented in the table
below.
|
September 30, |
|
December 31, |
(Expressed in millions
of U.S. dollars, except share and per share amounts) |
2020 |
|
2019 |
Common shares outstanding |
115,299,341 |
|
|
115,299,341 |
|
|
|
|
|
Total common shareholders’ equity |
$ |
1,459.2 |
|
|
$ |
1,640.4 |
|
Goodwill |
(400.8 |
) |
|
(400.8 |
) |
Intangible assets |
(168.0 |
) |
|
(179.8 |
) |
Net deferred tax liability on intangible assets |
19.1 |
|
|
22.8 |
|
Tangible book value |
$ |
909.5 |
|
|
$ |
1,082.6 |
|
|
|
|
|
Book value per common share |
$ |
12.66 |
|
|
$ |
14.23 |
|
Tangible book
value per common share |
$ |
7.89 |
|
|
$ |
9.39 |
|
Operating (loss) attributable to common
shareholders
The Company uses Operating (loss) attributable
to common shareholders as a measure to evaluate the underlying
fundamentals of its operations and believes it to be a useful
measure of its core performance. Operating (loss) attributable to
common shareholders as used herein differs from net (loss) income
attributable to common shareholders, which the Company believes is
the most directly comparable GAAP measure, by the exclusion of net
realized and unrealized gains and losses on investments, net
foreign exchange gains (losses) and the associated income tax
expense or benefit. The Company’s management believes that
Operating (loss) attributable to common shareholders is useful to
investors because it is more reflective of the Company’s core
business, as it removes the variability arising from fluctuations
in the Company’s fixed maturity investment portfolio, equity
investments trading, investments-related derivatives, and net
foreign exchange gains (losses) and the associated income tax
expense or benefit of those fluctuations. The following is a
reconciliation of net (loss) income attributable to common
shareholders to Operating (loss) attributable to common
shareholders:
|
Three months ended September 30, |
Nine months ended September 30, |
(Expressed in millions of U.S. dollars) |
2020 |
2019 |
2020 |
2019 |
Net (loss) income attributable to common
shareholders |
$ |
(95.5 |
) |
$ |
(2.7 |
) |
$ |
(207.2 |
) |
$ |
99.2 |
|
Adjustment for net realized and unrealized (gains) losses on
investments |
(27.4 |
) |
(69.2 |
) |
(19.7 |
) |
(183.3 |
) |
Adjustment for net foreign exchange losses (gains) |
21.3 |
|
(4.3 |
) |
18.9 |
|
(9.4 |
) |
Adjustment for income tax expense (benefit)(1) |
0.8 |
|
10.8 |
|
(10.2 |
) |
27.6 |
|
Operating
(loss) attributable to common shareholders |
$ |
(100.8 |
) |
$ |
(65.4 |
) |
$ |
(218.2 |
) |
$ |
(65.9 |
) |
(1)Adjustment for income tax expense (benefit)
represents the income tax expense (benefit) associated with the
adjustment for net realized and unrealized (gains) losses on
investments and the income tax expense (benefit) associated with
the adjustment for net foreign exchange losses (gains). The income
tax impact is estimated by applying the statutory rates of
applicable jurisdictions, after consideration of other relevant
factors.
Category: EarningsSource: Sirius International Insurance Group,
Ltd.
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