First net profit in six quarters: SiriusPoint’s turnaround efforts pay off
Global specialty re/insurer SiriusPoint has reported its first net profit since Q2 2021, with positive capital generation across all business areas, in the first quarter of 2023. The company’s CEO Scott Egan expressed his satisfaction with the performance and turnaround efforts while acknowledging there’s “still much to do” to capitalise on future opportunities.
The company posted a net profit of $139 million in the first quarter, a big improvement on the $217 million loss it posted in the same period a year earlier. The swing was largely down to a big change in its net realised and unrealised investment gains and losses and net investment income. But the company also illustrated encouraging signs in its core business.
Its gross written premiums reached $1.1 billion in Q1, a small increase on the year before. Its reinsurance GWP dropped to $396 million from $524 million but this was more than made up for by growth in its insurance and services unit. Its combined ratio for the quarter was 73.8% compared with 93.7% a year earlier. Its core underwriting income was $107.4 million, a big improvement on the $12.7 million in Q1 2022.
Consolidated underwriting income for Q1 was $156.5 million compared to $33.5 million for the same period in 2022. The improvement in net underwriting results was driven by improved favourable prior year loss reserve development of $105.4 million. Its reinsurance segment generated underwriting income of $79.7 million (69.3% combined ratio), compared to $3.1 million (99.0% combined ratio) in the same period a year earlier.
Scott Egan, CEO, said: “We are pleased with the first quarter results. We have delivered positive capital generation across all business areas with our Underwriting business delivering a Core combined ratio of 80.5%. This quarter delivers the first positive net income since Q2’21 while our book value per diluted common share has increased by 9% during the quarter.
“We have a strong balance sheet made stronger following the Loss Portfolio Transfer (LPT) of $1.3 billion we previously announced. The LPT transaction will align our balance sheet with our go forward strategy. We expect capital benefits in excess of $150 million at the closing and have released $102 million of reserves linked to the LPT. We expect the transaction to close in June subject to regulatory approval and other closing conditions.
“Our people have been working incredibly hard to improve the business and we continue to make progress in creating ‘One SiriusPoint.’ Our efforts are getting noticed. In late March, Fitch revised its outlook from Negative to Stable and reaffirmed its ratings, and, recently AM Best has reaffirmed our Stable ratings and outlook. We still have much to do and are excited about the opportunities ahead.”
He added: “We have a clear path for delivery for the rest of the year with an ambition to keep improving. We look forward to sharing updates on our progress during 2023.”
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