SiriusPoint Ltd
For the period ended Jun 30, 2024. Filed Aug 1, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2024 · Filed Aug 1, 2024
SPNT$26.33+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-03-31; filed 2024-05-01.
0001576018-24-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-06-30; filed 2024-08-01.
0001576018-24-000042
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 209 previous paragraphs and 240 current paragraphs.
135 unchanged; 62 reworded; 34 added; 9 removed; 3 previous and 9 current paragraphs rearranged.
Tables are not compared: 15 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
Additionally, the transactions contemplated by the Agreement are subject to risks and uncertainties and factors that could cause the Company’s actual results to differ from those statements herein including, but not limited to: that the Company may be unable to complete the proposed transactions because, among other reasons, conditions to the closing of the proposed transactions are not be satisfied or waived; the occurrence of any event, change or other circumstance that could give rise to the termination of the Agreement; and the outcome of any legal proceedings to the extent initiated against the Company or others following the announcement of the proposed transaction, as well as the Company’s response to any of the aforementioned factors.
Current report
Workers’ Compensation Loss Portfolio Transfer
Current report
On April 30, 2024, SiriusPoint America Insurance Company (“SiriusPoint America”), a subsidiary of SiriusPoint Ltd., entered into a Master Agreement (the “Master Agreement”), dated as of April 30, 2024, made by and between SiriusPoint America and Clarendon National Insurance Company (“Clarendon National”), an insurer domiciled in Texas and an affiliate of Enstar Group Limited, a Bermuda exempted company (“Enstar”).
Current report
Pursuant to the Master Agreement, at the closing of the transactions contemplated therein, among other documents, (a) SiriusPoint America and Clarendon National will enter into a Loss Portfolio Transfer Reinsurance Agreement (the “LPT Agreement”), pursuant to which SiriusPoint America will cede and Clarendon National will assume 100% of the net liability with respect to certain workers’ compensation insurance exposures of SiriusPoint America (the “Subject Business”) on a funds withheld basis, subject to the terms and conditions of the LPT Agreement including an aggregate limit; (b) SiriusPoint America and an affiliate of Clarendon National (the “Administrator”) will enter into an Administrative Services Agreement concerning the Administrator’s authority and responsibility for certain administrative services related to the Subject Business, including claims handling; and (c) Enstar shall issue a Parental Guarantee in favor of SiriusPoint America guaranteeing Clarendon National’s obligations under the LPT Agreement. In certain circumstances and in lieu of the guarantee obligations provided thereunder, Clarendon National may post letters of credit as collateral securing Clarendon National’s reinsurance obligations with respect to the Subject Business. Immediately prior to the effective date of the LPT Agreement, SiriusPoint will be commuting certain ceded workers’ compensation reinsurance contracts, and the liabilities related to those commuted contracts will be included in the Subject Business.
Current report
This transaction covers approximately $400 million of SiriusPoint reserves, including liabilities to be commuted, valued as of December 31, 2023, and the reinsurance premium. The aggregate limit under the LPT Agreements is 150% of the premium paid less certain adjustments for paid losses in the interim period prior to the effective date of the contract. Upon closing and the effective date of the contract, we expect to recognize a loss of $20 million to $30 million.
Current report
The Master Agreement and the LPT Agreements include customary representations and warranties, indemnification obligations, covenants and termination rights of the parties. The transaction is anticipated to close during the third quarter of 2024, subject to regulatory approvals and other customary closing conditions.
Current report
The decrease in annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders for the six months ended June 30, 2024 was driven by lower net income relative to common shareholder’s equity in the period as the Company’s equity has grown each quarter since the beginning of 2023.
Current report
The decrease in net underwriting results for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was driven by lower favorable prior year loss reserve development. Favorable prior year loss reserve development for the six months ended June 30, 2023 included $118.2 million driven by reserving analyses performed in connection with the 2023 LPT. Excluding the favorable development linked to the 2023 LPT, underwriting income increased by $4.6 million primarily driven by lower other underwriting expenses resulting from our cost savings program, partially offset by higher acquisition costs driven by business mix changes, including the growth of Insurance & Services.
Current report
The decrease in investments was primarily driven by the use of funds to support the redemption of $115.0 million of outstanding debt and the commutation of a deposit accounted contract of $102.1 million resulting in the return of funds to the cedant.
Current report
Total net investment income and realized and unrealized investment gains for the six months ended June 30, 2023 was primarily attributable to net investment income related to interest income from our debt and short-term investment portfolio of $137.5 million. Increased dividend and investment income is due to the ongoing re-positioning of the portfolio to focus on investing in high grade fixed income securities.
Current report
For the three months ended June 30, 2024, other revenues primarily consisted of a gain of $95.9 million from the deconsolidation of Arcadian, $23.0 million of service fee revenue from MGAs and a gain of $10.6 million from the change in fair value of liability-classified capital instruments. For the three months ended June 30, 2023, other revenues consisted of $22.5 million of service fee revenue from MGAs, partially offset by a loss of $19.1 million from the change in fair value of liability-classified capital instruments. Effective June 30, 2024, we deconsolidated Arcadian when our management and Arcadian consented to certain amendments to the shareholders’ agreement and termination of the unsecured promissory note which resulted in our Company ceasing to have control over Arcadian. The change in fair value of liability-classified capital instruments is driven by movement in our Company’s share price as compared to the three months ended June 30, 2023. The increase in service fee revenue for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 is primarily driven by increases in IMG’s travel insurance business.
Current report
The decrease in Net corporate and other expenses for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 was primarily driven by restructuring charges incurred during the three and six months ended June 30, 2023 of $8.8 million and $18.8 million, respectively, partially offset by severance and compensation related expenses associated with the recent management changes, consulting fees related to nonrecurring projects and increased regulatory fees as we grow our Lloyds business.
Current report
For the three months ended June 30, 2024 service fee expense decreased to $47.7 million compared to $50.0 million for the three months ended June 30, 2023. For the six months ended June 30, 2024 service fee expense decreased to $93.7 million compared to $95.5 million for the six months ended June 30, 2023. The decreases were primarily driven by the deconsolidation of Banyan in the fourth quarter of 2023.
Current report
The foreign exchange losses of $3.6 million for the three months ended June 30, 2024 were primarily due to $3.1 million of foreign exchange losses from our international operations.
Current report
The foreign exchange gains of $0.1 million for the six months ended June 30, 2024 were primarily due to $2.7 million of foreign exchange gains from our international operations.
Current report
The foreign exchange losses of $17.4 million for the three months ended June 30, 2023 were primarily due to $16.5 million of foreign exchange gains from our international operationsand net losses $0.9 million of foreign currency losses on the 2017 SEK Subordinated Notes and a swap designed to minimize currency exposure on the notes as a result of the weakening of the Swedish Krona relative to the U.S. dollar.
Current report
The decrease in income tax expense for the three and six months ended June 30, 2024 compared to the three and six months ended June 30, 2023 is driven by a decrease in pre-tax income in taxable jurisdictions.
Current report
Gross premiums written increased by $37.5 million, or 4.7%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Net premiums written increased by $61.6 million, or 10.5%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Net premiums earned decreased by $42.8 million, or 7.2%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. The increases in premiums written were primarily driven by increases from Insurance & Services from strategic organic and new program growth, as well as increases across A&H. These increases were partially offset by the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a cyber program to another carrier, which also was the main driver of the decrease in premiums earned.
Current report
Excluding the favorable development linked to the 2023 LPT, net underwriting income decreased by $17.7 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This decrease was driven by higher acquisition costs driven by business mix changes to decrease our exposure to more volatile lines of business, as well as $5.6 million catastrophe losses for the three months ended June 30, 2024 compared to no significant catastrophe losses the three months ended June 30, 2023, partially offset by lower attritional losses.
Current report
Services revenues was $57.4 million for the three months ended June 30, 2024 compared to $59.4 million for the three months ended June 30, 2023, primarily due to decreases in Arcadian and Armada.
Current report
Core Premium Volume
Current report
Core Underwriting Results
Current report
Excluding the favorable development linked to the 2023 LPT, net underwriting income increased by $7.7 million primarily driven by lower other underwriting expenses resulting from our cost savings program and lower attritional losses, partially offset by higher acquisition costs from business mix changes, including the growth of Insurance & Services.
Current report
Core Services Results
Current report
Services revenues remained stable at $123.2 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Current report
For the six months ended June 30, 2024, net services fee income increased to $29.5 million from $27.7 million for the six months ended June 30, 2023. We generated net services income of $27.2 million for the six months ended June 30, 2024, compared to $24.4 million for the six months ended June 30, 2023. These increase were primarily due to increased services revenues and decreased service expense from IMG. Service margin, which is calculated as net service fee income as a percentage of services revenues, increased to 23.9% for the six months ended June 30, 2024 compared to 22.5% for the six months ended June 30, 2023.
Current report
The decrease in net underwriting results for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to decreased favorable prior year loss reserve development, as well ashigher acquisition costs driven by business mix changes. Netfavorable prior year loss reserve development for the three months ended June 30, 2024 was $6.3 million primarily driven by favorable development on a structured auto contract and Aviation, compared to
Current report
$25.9 million for the three months ended June 30, 2023, which was driven by reserving analyses performed in connection with the 2023 LPT.
Current report
Gross premiums written decreased by $97.0 million, or 8.7%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a Cyber program to another carrier, representing $233.8 million of gross premiums written for the six months ended June 30, 2023, as well as lower A&H premiums, partially offset by strategic organic and new program growth.
Current report
The Company deconsolidated Banyan as of October 31, 2023 when we sold our ownership shares. However, we executed a three-year extension of the commercial relationship with Banyan, extending our partnership. We also deconsolidated Arcadian as of June 30, 2024 as a result of no longer having a controlling interest. The results of operations of Arcadian are included in our consolidated financial statements through June 30, 2024. There has been no change to our underwriting relationship with Arcadian.
Current report
Gross premiums written generated by the consolidated MGAs in the aggregate, excluding Banyan, increased by $17.8 million, or 11.3%, to $175.8 million for the three months ended June 30, 2024 compared to $158.0 million for the three months ended June 30, 2023, from increases across all consolidated MGAs.
Current report
The improvement in underwriting income of $10.4 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 primarily driven by increased profitability in North America A&H and growth in the Arcadian business.
Current report
The decrease in services revenues of $4.8 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to decreases in Arcadian and Armada. This decrease drove the decrease in net services income for the three months ended June 30, 2024 compared to the three months ended June 30, 2023.
Current report
There was a slight decrease in services revenues of $2.6 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Net services income remained stable for the six months ended June 30, 2024 compared to the six months ended June 30, 2023.
Removed paragraphs (9)
Previous report
Interest Rates and Inflation
Previous report
The Central banks’ monetary policies across the globe resulted in increased interest rates. While the rise in interest rates negatively affects the fair value of current debt security holdings, it also provides higher reinvestment rates upon maturity or sales of our existing portfolio. Additionally, our 2017 SEK Subordinated Notes bear interest at a variable rate based on the Stockholm Interbank Offered Rate plus a margin.
Previous report
We continue to evaluate the impact of inflation on our underwriting results and reserves. We proactively adjusted trend assumptions in our pricing. As of March 31, 2024, we believe our estimate of the impact of inflation is within our established reserves given the existing provisions for uncertainty that we previously established. As the inflationary environment is dynamic with a relatively high degree of uncertainty, we will continue to monitor and analyze the inflationary environment and its effect on our portfolio in order to maintain adequate pricing and reserving estimates.
Previous report
The main drivers for the increase in total investments as of March 31, 2024 was net investment income of $78.8 million primarily driven by increases in interest income from the Company’s debt portfolio. These fixed income securities are subject to changes in economic conditions and Central banks’ decisions with regards to interest rate policies. We continue to monitor these changes to align our total investments with our liabilities, preserve capital and to optimize yield on our fixed income portfolio.
Previous report
Based on management’s view and expectation, the Company has targeted that it will achieve between $250 million and $265 million of net investment income for the full year 2024.
Previous report
The decrease in Net corporate and other expenses for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily driven by restructuring charges of $7.0 million incurred during the three months ended March 31, 2023. Service fee expense of $46.0 million for the three months ended March 31, 2024 remained consistent compared to $45.5 million for the three months ended March 31, 2023. For the three months ended March 31, 2024 and 2023, the Company did not record any change to the current expected credit losses.
Previous report
The foreign exchange gains of $3.7 million for the three months ended March 31, 2024 were primarily due to $5.8 million of foreign exchange gains from our international operations.
Previous report
The decrease in income tax expense for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 is driven by lower net income for the three months ended March 31, 2024 primarily as a result of decreased favorable prior year loss reserve development compared to the three months ended March 31, 2023, linked to the 2023 LPT.
Previous report
Excluding the favorable development linked to the 2023 LPT, net underwriting income increased by $25.4 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This increase was driven by a lower other underwriting expense ratio resulting from our cost savings program and lower attritional losses, as well as no catastrophe losses for the three months ended March 31, 2024 compared to $7.0 million the three months ended March 31, 2023.
Reworded paragraphs (62)
Previous wording
Certain statements in this Form 10-Q may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding prospects for our industry, our business strategy, plans, goals and expectations concerning our market position, international expansion, investment portfolio expectations, future operations, margins, profitability, efficiencies, capital expenditures, liquidity and capital resources and other non-historical financial and operating information. When used in this discussion, the words “believes,” “intends,” “seeks,” “anticipates,” “aims,” “plans,” “targets,” “estimates,” “expects,” “assumes,” “continues,” “should,” “could,” “will,” “may” and the negative of these or similar terms and phrases are intended to identify forward-looking statements.
Current wording
Certain statements in this Form 10-Q may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, statements regarding prospects for our industry, our business strategy, plans, goals and expectations concerning our market position, international expansion, investment portfolio expectations, future operations, margins, profitability, efficiencies, capital expenditures, liquidity and capital resources and other non-historical financial and operating information. When used in this discussion, the words “believes,” “intends,” “seeks,” “anticipates,” “aims,” “plans,” “targets,” “estimates,” “expects,” “assumes,” “continues,” “should,” “could,” “will,” “may” and the negative of these or similar terms and phrases are intended to identify forward-looking statements. These statements also include, but are not limited to, statements regarding the transactions contemplated by the Confidential Settlement and Mutual Release Agreement (the “Settlement Agreement”), and concurrently therewith, a Share Repurchase Agreement (the “Share Repurchase Agreement” and, together with the Settlement Agreement, (collectively, the “Agreement”).
Previous wording
•SiriusPoint’s response to any acquisition proposal that may be received from any party, including any actions that may be considered by the Company’s Board of Directors or any committee thereof; and
Current wording
•the Company’s response to any acquisition proposal that may be received from any party, including any actions that may be considered by the Company’s Board of Directors or any committee thereof; and
Previous wording
We are an underwriting first company as we aim to create a business model which is simplified, fully-integrated and globally connected. Distribution relationships are important to us, as we generate premiums from various sources, including our consolidated MGAs and non-consolidated MGAs. We seek to apply our underwriting talent, capabilities and proven management expertise to underwrite a profitable book of business and identify new opportunities to create value. Our approach is to be nimble and reactive to market opportunities within our segments of Insurance & Services and Reinsurance, allocating capital where we see profitable opportunity, while remaining disciplined and consistent within our specified risk tolerances and areas of expertise. Our MGA strategy is to partner with high integrity and transparent leaders and teams with deep underwriting expertise and a track record of success. Our partnerships are structured to incentivize all parties to deliver thereby allowing capable teams to do what they do best, while we provide services where our partners are lacking. As of March 31, 2024, we had equity stakes in 24 entities (MGAs, Insurtech and Other) which underwrite or distribute a wide range of lines of business.
Current wording
We are an underwriting first company as we aim to create a business model which is simplified, fully-integrated and globally connected. Distribution relationships are important to us, as we generate premiums from various sources, including our consolidated MGAs and non-consolidated MGAs. We seek to apply our underwriting talent, capabilities and proven management expertise to underwrite a profitable book of business and identify new opportunities to create value. Our approach is to be nimble and reactive to market opportunities within our segments of Insurance & Services and Reinsurance, allocating capital where we see profitable opportunity, while remaining disciplined and consistent within our specified risk tolerances and areas of expertise. Our MGA strategy is to partner with high integrity and transparent leaders and teams with deep underwriting expertise and a track record of success. Our partnerships are structured to incentivize all parties to deliver thereby allowing capable teams to do what they do best, while we provide services where our partners are lacking. As of June 30, 2024, we had equity stakes in 22 entities (MGAs, Insurtech and Other) which underwrite or distribute a wide range of lines of business.
Previous wording
In April 2024, we issued $400.0 million aggregate principal amount of 7.0% Senior Notes due 2029 (the “2024 Senior Notes”). Interest is payable on the 2024 Senior Notes semi-annually in arrears. The 2024 Senior Notes were issued pursuant to a Senior Indenture, dated as of April 5, 2024, between our Company and The Bank of New York Mellon, as trustee, and supplemented by a First Supplemental Indenture thereto with The Bank of New York Mellon, as trustee. The 2024 Senior Notes were offered and sold pursuant to the shelf registration statement on Form S-3 (File No. 333-255917), filed with the U.S. Securities and Exchange Commission (the “Commission”) on May 7, 2021, and a prospectus supplement related to the 2029 Notes dated March 27, 2024 (filed with the Commission pursuant to Rule 424(b)(2) under the Securities Act of 1933). In April 2024, we amended our 4.6% 2016 Senior Notes pursuant to a Fourth Supplemental Indenture thereto with The Bank of New York Mellon, as trustee, and following such amendments we completed the redemption of all remaining outstanding $400.0 million aggregate principal amount of our 2016 Senior Notes. We also redeemed all $115.0 million aggregate principal amount of our 2015 Senior Notes in April 2024. We used certain of the proceeds from the 2024 Senior Notes, together with available cash, to fund the purchase of validly tendered 2016 Senior Notes and the redemptions of the 2016 Senior Notes and the 2015 Senior Notes.
Current wording
In April 2024, we issued $400.0 million aggregate principal amount of 7.0% Senior Notes due 2029 (the “2024 Senior Notes”). Interest is payable on the 2024 Senior Notes semi-annually in arrears. The 2024 Senior Notes were issued pursuant to a Senior Indenture, dated as of April 5, 2024, between our Company and The Bank of New York Mellon, as trustee, and supplemented by a First Supplemental Indenture thereto with The Bank of New York Mellon, as trustee. In April 2024, we amended our 4.6% 2016 Senior Notes pursuant to a Fourth Supplemental Indenture thereto with The Bank of New York Mellon, as trustee, and following such amendments we completed the redemption of all remaining outstanding $400.0 million aggregate principal amount of our 2016 Senior Notes. We also redeemed all $115.0 million aggregate principal amount of our 2015 Senior Notes in April 2024. We used certain of the proceeds from the 2024 Senior Notes, together with available cash, to fund the purchase of validly tendered 2016 Senior Notes and the redemptions of the 2016 Senior Notes and the 2015 Senior Notes.
Previous wording
Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders for the three months ended March 31, 2024 and 2023 was calculated as follows:
Current wording
Annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders for the three and six months ended June 30, 2024 and 2023 was calculated as follows:
Previous wording
The decrease in annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders was driven by lower net income for the three months ended March 31, 2024 primarily as a result of decreased favorable prior year loss reserve development compared to the three months ended March 31, 2023, which was linked to the 2023 LPT.
Current wording
The increase in annualized return on average common shareholders’ equity attributable to SiriusPoint common shareholders was driven by higher net income for the three months ended June 30, 2024, primarily as a result of the gain from the deconsolidation of Arcadian Risk Capital Ltd. (“Arcadian”) and the gain from the change in fair value of the liability-classified capital instruments, partially offset by a decrease in underwriting income driven by favorable prior year loss reserve development for the three months ended June 30, 2023 linked to the 2023 LPT.
Previous wording
As of March 31, 2024, book value per common share was $14.15, representing an increase of $0.39 per share, or 2.8%, from $13.76 per share as of December 31, 2023. As of March 31, 2024, book value per diluted common share was $13.64, representing an increase of $0.29 per share, or 2.2%, from $13.35 per share as of December 31, 2023. As of March 31, 2024, tangible book value per diluted common share was $12.79, representing an increase of $0.32 per share, or 2.6%, from $12.47 per share as of December 31, 2023. The increases reflect continued positive underwriting and investment results, partially offset by accumulated other comprehensive loss from unrealized losses from available for sale (“AFS”) debt securities.
Current wording
As of June 30, 2024, book value per common share was $14.68, representing an increase of $0.53 per share, or 3.7%, from $14.15 per share as of March 31, 2024. As of June 30, 2024, book value per diluted common share was $14.31, representing an increase of $0.67 per share, or 4.9%, from $13.64 per share as of March 31, 2024. As of June 30, 2024, tangible book value per diluted common share was $13.47, representing an increase of $0.68 per share, or 5.3%, from $12.79 per share as of March 31, 2024.
Previous wording
Consolidated Results of Operations—Three months ended March 31, 2024 and 2023
Current wording
Consolidated Results of Operations—Three and six months ended June 30, 2024 and 2023
Previous wording
The following table sets forth the key items discussed in the consolidated results of operations section, and the period over period change, for the three months ended March 31, 2024 and 2023:
Current wording
The following table sets forth the key items discussed in the consolidated results of operations section, and the period over period change, for the three and six months ended June 30, 2024 and 2023:
Previous wording
The key changes in our consolidated results for the three months ended March 31, 2024 compared to the prior year period are discussed below.
Current wording
The key changes in our consolidated results for the three and six months ended June 30, 2024 compared to the prior year periods are discussed below.
Previous wording
The decrease in net underwriting results for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was driven by lower favorable prior year loss reserve development. Favorable prior year loss reserve development for the three months ended March 31, 2023 included $101.6 million driven by reserving analyses performed in connection with the 2023 LPT. Excluding the favorable development linked to the 2023 LPT, net underwriting income increased by $33.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. This increase was primarily driven by a lower other underwriting expense ratio resulting from our cost savings program and lower attritional losses, as well as no catastrophe losses for the three months ended March 31, 2024 compared to $12.9 million the three months ended March 31, 2023.
Current wording
The decrease in net underwriting results for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was driven by lower favorable prior year loss reserve development. Favorable prior year loss reserve development for the three months ended June 30, 2023 included $16.6 million driven by reserving analyses performed in connection with the 2023 LPT. Excluding the favorable development linked to the 2023 LPT, net underwriting income decreased by $29.3 million for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. This decrease is consistent with our change in business mix, decreasing exposure to more volatile lines of business and growing A&H and International Insurance within the Insurance & Services segment.
Previous wording
(1)Includes$587.2 million of investments in the Third Point Optimized Credit portfolio (“TPOC Portfolio”) as of March 31, 2024 (December 31, 2023 - $562.0 million).
Current wording
(1)Includes$593.2 million of investments in the Third Point Optimized Credit portfolio (“TPOC Portfolio”) as of June 30, 2024 (December 31, 2023 - $562.0 million).
Previous wording
The duration of our fixed income portfolio, excluding cash and cash equivalents, is 2.9 years, (December 31, 2023 - 2.8 years). The increase from the comparative period is due to our effort to match our asset duration with economic liabilities in the current interest rate environment. The average credit rating of our investment portfolio is AA as of March 31, 2024 (December 31, 2023 - AA) with no defaults in the investment portfolio.
Current wording
The duration of our fixed income portfolio, excluding cash and cash equivalents, is 3.0 years (December 31, 2023 - 2.8 years). The increase from the comparative period is due to our effort to match our asset duration with economic liabilities in the current interest rate environment. The average credit rating of our investment portfolio is AA as of June 30, 2024 (December 31, 2023 - AA) with no defaults in the investment portfolio.
Previous wording
The following table provides a breakdown of structured products between investment and non-investment grade securities as of March 31, 2024. These are fixed income investments which are included in debt securities in the table above. Refer to
Current wording
The following table provides a breakdown of structured products between investment and non-investment grade securities as of June 30, 2024 and December 31, 2023. These are fixed income investments which are included in debt securities in the table above. Refer to Note 7 - Investments in our unaudited condensed financial statements included elsewhere in this Quarterly Report for further discussion of these securities.
Previous wording
The following is a summary of the results from investments and cash for the three months ended March 31, 2024 and 2023:
Current wording
The following is a summary of the results from investments and cash for the three and six months ended June 30, 2024 and 2023:
Previous wording
The following is a summary of the results from investments by investment classification, for the three months ended March 31, 2024 and 2023:
Current wording
The following is a summary of the results from investments by investment classification for the three and six months ended June 30, 2024 and 2023:
Previous wording
Total net investment income and realized and unrealized investment gains for the three months ended March 31, 2024 was primarily attributable to net investment income related to interest income from our debt and short-term investment portfolio of $76.9 million. Increased investment income is primarily due to increased interest rates and our rotation of the portfolio from cash and cash equivalents and U.S. government and government agency positions to high-grade corporate debt and other securitized assets, in an effort to better diversify our portfolio.
Current wording
Total net investment income and realized and unrealized investment gains for the six months ended June 30, 2024 was primarily attributable to net investment income related to interest income from our debt and short-term investment portfolio of $147.0 million. Increased investment income is primarily due to increased interest rates and our rotation of the portfolio from cash and cash equivalents and U.S. government and government agency positions to high-grade corporate debt and other securitized assets, in an effort to better diversify our portfolio. Losses on private other long-term investments were the result of updated fair value analyses consistent with the current insurtech market.
Previous wording
Total net investment income and realized and unrealized investment gainsforthe three months ended March 31, 2023 was primarily attributable to investment results from our debt and short-term investment portfolio of $72.6 million driven by dividend and interest income primarily on U.S. treasury bill and corporate debt positions.
Current wording
Total net investment income and realized and unrealized investment gainsforthe three months ended June 30, 2023 was primarily attributable to investment results from our debt and short-term investment portfolio of $64.9 million driven by dividend and interest income primarily on U.S. treasury bill and corporate debt positions.
Previous wording
For the three months ended March 31, 2024, other revenues primarily consisted of $28.7 million of service fee revenue from MGAs, partially offset by a loss of $15.9 million from the change in fair value of liability-classified capital instruments. For the three months ended March 31, 2023, other revenues consisted of $29.5 million of service fee revenue from MGAs and a gain of $4.5 million from the sale of renewal rights of our environmental business, offset by a loss of $25.0 million from the change in fair value of liability-classified capital instruments. The decrease in service fee revenue is primarily driven by losses on underwriting derivatives and the decrease in loss from the change in fair value of liability-classified capital instruments is driven by the exercise and expiration of certain instruments as compared to the three months ended March 31, 2023.
Current wording
For the six months ended June 30, 2024, other revenues primarily consisted of a gain of $95.9 million from the deconsolidation of Arcadian and $51.7 million of service fee revenue from MGAs, partially offset by a loss of $5.3 million from the change in fair value of liability-classified capital instruments. For the six months ended June 30, 2023, other revenues primarily consisted of $51.9 million of service fee revenue from MGAs and a gain of $4.5 million from the sale of renewal rights of our environmental business, partially offset by a loss of $44.1 million from the change in fair value of liability-classified capital instruments. The decreased loss from the change in fair value of liability-classified capital instruments is driven by change in our share price relative to the change in the six months ended June 30, 2023.
Previous wording
Amortization of intangible assets for the three months ended March 31, 2024 was $2.9 million (2023 - $2.4 million). The increases in amortization were due to the use of amortization patterns which are based on the period over which they are expected to generate future net cash inflows from the use of the underlying intangible assets.
Current wording
Amortization of intangible assets for the three and six months ended June 30, 2024 was $3.0 million and $5.9 million, respectively (2023 - $2.9 million and $5.3 million, respectively). The slight increases in amortization were due to the use of amortization patterns which are based on the period over which they are expected to generate future net cash inflows from the use of the underlying intangible assets.
Previous wording
Interest expense and finance costs are related to interest due on our senior and subordinated notes, as well as interest associated with certain reinsurance contracts. Total interest expense for the three months ended March 31, 2024 was $20.5 million (2023 - $12.8 million). The increase in interest expense was due to the interest expense associated with funds held on the 2023 LPT of $7.1 million, in addition to the increase in the variable interest rate on the 2017 SEK Subordinated Note.
Current wording
Interest expense and finance costs are related to interest due on our senior and subordinated notes, as well as interest associated with certain reinsurance contracts. Total interest expense for the three and six months ended June 30, 2024 was $15.7 million and $36.2 million, respectively (2023 - $11.7 million and $24.5 million, respectively). The increases in interest expense for the three and six months ended June 30, 2024 were primarily driven by interest expense associated with funds held on the 2023 LPT of $7.1 million and $14.2 million, respectively, as well as increases in the variable interest rate on the 2017 SEK Subordinated Note. These increases were partially offset by a gain on the commutation of a deposit accounted contract.
Previous wording
The foreign exchange losses of $0.1 million for the three months ended March 31, 2023 were primarily due to $12.7 million of foreign exchange gains from our international operations which were offset by $1.4 million of foreign currency losses on the 2017 SEK Subordinated Notes, as a result of the strengthening of the Swedish Krona, and $11.3 million of losses on derivatives used to hedge exposures.
Current wording
The foreign exchange losses of $17.5 million for the six months ended June 30, 2023 were primarily due to $16.5 million of foreign exchange gains from our international operations which were offset by $1.0 million of foreign currency losses on the 2017 SEK Subordinated Notes, as a result of the weakening of the Swedish Krona relative to the U.S. dollar.
Previous wording
Additional foreign currency gains (losses) were recorded as part of the investments results. See Note 8 “Total net investment income and realized and unrealized investment gains” in our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Current wording
Additional foreign currency gains (losses) were recorded as part of the investments results. See Note 8 “Total realized and unrealized investment gains (losses) and net investment income” in our unaudited consolidated financial statements included elsewhere in this Form 10-Q.
Previous wording
On an aggregate basis, the effects of foreign exchange resulted in charges to net income of $8.7 million and comprehensive income of $8.3 million for the three months ended March 31, 2024.
Current wording
On an aggregate basis, the effects of foreign exchange resulted in charges to net income of $3.5 million and $5.2 million as well as charges to comprehensive income of $6.3 million and $2.3 million for the three and six months ended June 30, 2024, respectively.
Previous wording
Segment Results — Three months ended March 31, 2024 and 2023
Current wording
Segment Results — Three and six months ended June 30, 2024 and 2023
Previous wording
Corporate includes the results of all runoff business, which represents certain classes of business that we no longer actively underwrite, including the effect of the Restructuring Plan and certain reinsurance contracts that have interest crediting features. Corporate results include asbestos and environmental and other latent liability exposures on a gross basis, which have mostly been ceded, as well as specific workers’ compensation and cyber programs which we no longer write.
Current wording
Corporate results include all runoff business, which represents certain classes of business that we no longer actively underwrite, including the effect of the including the effect of the restructuring of the underwriting platform announced in 2022 (the “Restructuring Plan”) and certain reinsurance contracts that have interest crediting features. Corporate results include asbestos and environmental and other latent liability exposures on a gross basis, which have mostly been ceded, as well as specific workers’ compensation and cyber programs which we no longer write.
Previous wording
Services revenues, net services fee income and net services income increased slightly for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Service margin, which is calculated as Net service fee income as a percentage of services revenues, increased to 30.1% for the three months ended March 31, 2024 from 28.7% for the three months ended March 31, 2023.
Current wording
Net services fee income and net services income increased slightly for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Service margin, which is calculated as Net service fee income as a percentage of services revenues, increased to 16.9% for the three months ended June 30, 2024 from 15.8% for the three months ended June 30, 2023.
Previous wording
Gross premiums written decreased by $179.5 million, or 16.9%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Net premiums written decreased by $136.4 million, or 17.9%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Net premiums earned decreased by $32.9 million, or 6.0%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023. The decreases in premium volume were primarily due to the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a Cyber program to another carrier, representing $116.8 million of gross premiums written for the three months ended March 31, 2023.
Current wording
Gross premiums written decreased by $142.0 million, or 7.6%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Net premiums written decreased by $74.8 million, or 5.5%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Net premiums earned decreased by $75.7 million, or 6.6%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decreases in premium volume were primarily due to the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a Cyber program to another carrier, with the most significant offset being strategic organic and new program growth.
Previous wording
The decrease in net underwriting results was primarily driven by decreased favorable prior year loss reserve development. Losses incurred included $8.0 million of favorable prior year loss reserve development for the three months ended March 31, 2024 driven by decre ased ultimate losses in the credit reinsurance portfolio, compared to $91.9 million for the three months ended March 31, 2023 driven by decreases in the domestic and international property and casualty lines of business in the Reinsurance segment and A&H in the Insurance & Services segment linked to the 2023 LPT.
Current wording
The decrease in net underwriting results was primarily driven by decreased favorable prior year loss reserve development. Losses incurred included $12.9 million of favorable loss reserve development for the six months ended June 30, 2024 driven by decreased ultimate losses in the Credit Reinsurance portfolio and North America A&H, partially offset by increases in the Environmental business, compared to $117.1 million of favorable loss reserve development for the six months ended June 30, 2023 driven by decreases in the domestic and international property and casualty lines of business in the Reinsurance segment and A&H in the Insurance & Services segment linked to the 2023 LPT.
Previous wording
The Reinsurance segment predominantly underwriters Casualty, Property and Specialty lines of business on a worldwide basis. The following table sets forth underwriting results and ratios, and the period over period changes for the Reinsurance segment, for the three months ended March 31, 2024 and 2023:
Current wording
The Reinsurance segment predominantly underwriters Casualty, Property and Specialty lines of business on a worldwide basis. The following table sets forth underwriting results and ratios, and the period over period changes for the Reinsurance segment, for the three and six months ended June 30, 2024 and 2023:
Previous wording
Gross premiums written in the Reinsurance segment decreased by $39.8 million, or 10.0%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily driven by lower premiums written in New York Casualty and Bermuda Specialty.
Current wording
Gross premiums written in the Reinsurance segment decreased by $5.2 million, or 1.5%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by lower premiums written in New York Casualty, partially offset by increases in Bermuda Property.
Previous wording
The decrease in net underwriting results was primarily due to decreased favorable prior year loss reserve development. Losses incurred included $10.3 million of favorable prior year loss reserve development for the three months ended March 31, 2024 primarily driven by decreased ultimate losses in the credit reinsurance portfolio, compared to $74.6 million for the three months ended March 31, 2023 driven by decreases in the domestic and international property and casualty lines of business linked to the 2023 LPT.
Current wording
The decrease in net underwriting results for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, was primarily due to decreased favorable prior year loss reserve development. Net favorable prior year loss reserve development was $16.6 million for the six months ended June 30, 2024 primarily driven by decreased ultimate losses in the Credit Reinsurance portfolio, compared to net favorable prior year loss reserve development of $100.5 million for the six months ended June 30, 2023 primarily driven by decreases in the domestic and international Property and Casualty lines of business linked to the 2023 LPT.
Previous wording
For the three months ended March 31, 2024, we incurredno catastrophe losses, net of reinsurance and reinstatement premiums, compared to $6.0 million or 2.3 percentage points on the combined ratio, for the three months ended March 31, 2023.
Current wording
Catastrophe losses, net of reinsurance and reinstatement premiums, for the three months ended June 30, 2024, were $3.0 million or 1.2 percentage points on the combined ratio, compared to no significant catastrophe losses for the three months ended June 30, 2023. Catastrophe losses, net of reinsurance and reinstatement premiums, for the six months ended June 30, 2024, were $3.0 million or 0.6 percentage points on the combined ratio, compared to $6.0 million or 1.1 percentage points on the combined ratio, for the six months ended June 30, 2023.
Previous wording
As of March 31, 2024, we have equity stakes in 24 entities (MGAs, Insurtech and Other), which underwrite or distribute a wide range of lines of business, including general liability, professional liability, directors & officers, credit and bond, cyber, commercial automobile, workers’ compensation, accident & health, and other specialty insurance classes. As of March 31, 2024, we consolidated four MGAs in our financial statements: Arcadian Risk Capital Ltd. (“Arcadian”), ArmadaCorp Capital, LLC (“Armada”), Alta Signa Holdings (“Alta Signa”) and International Medical Group, Inc. (“IMG”). We provide underwriting capacity in the form of insurance or reinsurance to 13 non-consolidated entities in addition to the four consolidated MGAs. We also have investments stakes in 7 other entities where we have no underwriting relationships. The investment interests in the non-consolidated entities are included in strategic investments within other long term investments on the balance sheet.
Current wording
As of June 30, 2024, we have equity stakes in 22 entities (MGAs, Insurtech and Other), which underwrite or distribute a wide range of lines of business, including general liability, professional liability, directors & officers, credit and bond, cyber, commercial automobile, workers’ compensation, accident & health, and other specialty insurance classes. As of June 30, 2024, we consolidated three MGAs in our financial statements: ArmadaCorp Capital, LLC (“Armada”), Alta Signa Holdings (“Alta Signa”) and International Medical Group, Inc. (“IMG”). Effective June 30, 2024, we deconsolidated Arcadian when our management and Arcadian consented to certain amendments to the shareholders’ agreement and termination of the unsecured promissory note which resulted in our Company ceasing to have control over Arcadian. There has been no change to our underwriting relationship with Arcadian. We provide underwriting capacity in the form of insurance or reinsurance to 13 non-consolidated entities in addition to the three consolidated MGAs. We also have investments stakes in 6 other entities where we have no underwriting relationships. The investment interests in the non-consolidated entities are included in strategic investments within Other long term investments on the consolidated balance sheet.
Previous wording
The following table sets forth underwriting results, net MGA results, and ratios for the segment results, and the period over period changes, for the three months ended March 31, 2024 and 2023:
Current wording
The following table sets forth underwriting results, net MGA results, and ratios for the segment results, and the period over period changes, for the three and six months ended June 30, 2024 and 2023:
Previous wording
Gross premiums written decreased by $139.7 million, or 21.0%, for the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily driven by the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a Cyber program to another carrier, representing $116.8 million of gross premiums written for the three months ended March 31, 2023, as well as lower A&H premiums, partially offset by growth in premiums from strategic partnerships.
Current wording
Gross premiums written increased by $42.7 million, or 9.5%, for the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily driven by strategic organic and new program growth, as well as increases across A&H, partially offset by the movement of certain lines from Insurance & Services to Corporate, including the non-renewal of a Workers’ Compensation program and the planned transition of a Cyber program to another carrier, representing $117.0 million of gross premiums written for the three months ended June 30, 2023.
Previous wording
Gross premiums written generated by the consolidated MGAs, excluding Banyan, in the aggregate decreased by $26.7 million, or 14.6%, to $156.1 million for the three months ended March 31, 2024 compared to $182.8 million for the three months ended March 31, 2023, primarily driven by decreases in Armada and IMG, partially offset by an increase in Arcadian. We sold our ownership shares in Banyan in the fourth quarter of 2023, which resulted in deconsolidation of our ownership position. However, we executed a three-year extension of the commercial relationship with Banyan, extending the partnership.
Current wording
Gross premiums written generated by the consolidated MGAs in the aggregate, excluding Banyan, decreased by $8.8 million, or 2.6%, to $331.9 million for the six months ended June 30, 2024 compared to $340.8 million for the six months ended June 30, 2023, primarily driven by decreases in Armada and IMG, offset by increases in Arcadian.
Previous wording
Book value for the consolidated MGAs, excluding Banyan, was $103.1 million as of March 31, 2024, compared to $89.6 million at December 31, 2023.
Current wording
Book value for the consolidated MGAs was $94.5 million as of June 30, 2024, compared to $76.3 million at December 31, 2023, when adjusted to exclude Arcadian.
Previous wording
The decrease in underwriting income of $23.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 was primarily driven by adverse prior year loss reserve development of $2.3 million for the three months ended March 31, 2024, compared to favorable prior year loss reserve development of $17.3 million for the three months ended March 31, 2023. The favorable prior year loss reserve development for the three months ended March 31, 2023 was driven by reserving analyses performed in connection with the 2023 LPT.
Current wording
The decrease in underwriting income of $12.9 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily driven by net adverse prior year loss reserve development of $3.7 million for the six months ended June 30, 2024, compared to net favorable prior year loss reserve development of $16.6 million for the six months ended June 30, 2023, which was driven by reserving analyses performed in connection with the 2023 LPT.
Previous wording
Corporate includes the results of all runoff business, which represents certain classes of business that we no longer actively underwrite, including the effect of the Restructuring Plan and certain reinsurance contracts that have interest crediting features. Corporate results also include asbestos and environmental and other latent liability exposures on a gross basis, which have mostly been ceded, as well as specific workers’ compensation and cyber programs which we no longer write. The following table sets forth underwriting results and the period over period changes for the three months ended March 31, 2024 and 2023:
Current wording
Corporate includes the results of all runoff business, which represents certain classes of business that we no longer actively underwrite, including the effects of the Restructuring Plan and certain reinsurance contracts that have interest crediting features. Corporate results also include asbestos and environmental and other latent liability exposures on a gross basis, which have mostly been ceded, as well as specific workers’ compensation and cyber programs which we no longer write. The following table sets forth underwriting results and the period over period changes for the three and six months ended June 30, 2024 and 2023:
Showing the first 40 of 62 pairs. Open the source sections for the rest.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
As of June 30, 2024, book value per common share was $14.68, representing an increase of $0.92 per share, or 6.7%, from $13.76 per share as of December 31, 2023. As of June 30, 2024, book value per diluted common share was $14.31, representing an increase of $0.96 per share, or 7.2%, from $13.35 per share as of December 31, 2023. As of June 30, 2024, tangible book value per diluted common share was $13.47, representing an increase of $1.00 per share, or 8.0%, from $12.47 per share as of December 31, 2023.
Current report — wording carried from elsewhere
The increases reflect the gain from the deconsolidation of Arcadian, as well as continued positive underwriting and investment results, partially offset by accumulated other comprehensive loss from unrealized losses from available for sale (“AFS”) debt securities.
Current report — wording carried from elsewhere
Total net investment income and realized and unrealized investment gains for the three months ended June 30, 2024 was primarily attributable to net investment income related to interest income from our debt and short-term investment portfolio of $70.1 million, partially offset by unrealized losses on other long-term investments of $40.6 million. Increased investment income is primarily due to increased interest rates and our rotation of the portfolio from cash and cash equivalents and U.S. government and government agency positions to high-grade corporate debt and other securitized assets, in an effort to better diversify our portfolio. Losses on private other long-term investments were the result of updated fair value analyses consistent with current insurtech market trends and disposals of positions as the Company executes its strategy to focus on underwriting relationships with MGAs.
Current report — wording carried from elsewhere
The decrease in net underwriting results was primarily driven by decreased favorable prior year loss reserve development. Losses incurred included $4.9 million of favorable prior year loss reserve development for the three months ended June 30, 2024 primarily driven by favorable development within North America A&H, compared to $25.2 million for the three months ended June 30, 2023 driven by reserving analyses performed in connection with the 2023 LPT.
Current report — wording carried from elsewhere
The following tables set forth the operating segment results and ratios for the six months ended June 30, 2024 and 2023:
Current report — wording carried from elsewhere
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
Current report — wording carried from elsewhere
(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.
Current report — wording carried from elsewhere
Gross premiums written in the Reinsurance segment decreased by $45.0 million, or 6.0%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023, primarily driven by lower premiums written in New York Casualty and Bermuda Specialty, partially offset by increases in London Specialty.
Current report — wording carried from elsewhere
The decrease in underwriting income for the three months ended June 30, 2024 compared to the three months ended June 30, 2023 is primarily driven by a decrease in favorable prior year loss reserve development, which was associated with the 2023 LPT.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
Note 7 - Investments in our unaudited condensed financial statements included elsewhere in this Quarterly Report for further discussion of these securities.
Previous report — wording carried elsewhere
Services revenues and net services income increased slightly for the three months ended March 31, 2024 compared to the three months ended March 31, 2023.
Previous report — wording carried elsewhere
Third Point funds securing the Company’s contractual obligations under certain reinsurance contracts that the Company will not be released from until the underlying risks have expired or have been settled.