SiriusPoint Ltd. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; balance-sheet comparisons are with December 31, 2023. SiriusPoint is a Bermuda-domiciled global insurance and reinsurance provider, reporting Reinsurance and Insurance & Services segments. Amounts are U.S. dollars.
Financial results and key metrics
| Metric | Q1 2024 | Q1 2023 / comparator |
|---|---|---|
| Total revenue | $685.5 million | $678.1 million |
| Net premiums earned | $593.8 million | $595.5 million |
| Net income | $95.9 million | $138.3 million |
| Net income available to common shareholders | $90.8 million | $131.9 million |
| Diluted earnings per share | $0.49 | $0.74 |
| Net investment income | $78.8 million | $61.7 million |
| Net investment income and realized/unrealized investment gains | $79.8 million | $73.8 million |
| Operating cash flow | $55.8 million | $94.2 million |
| Combined ratio | 84.9% | 73.8% |
| Core combined ratio (non-GAAP) | 91.4% | 80.5% |
Lower combined ratios generally indicate better underwriting performance. Total underwriting income was $89.6 million, down from $156.5 million; core income was $62.4 million, down from $124.1 million. The core combined ratio was 84.2% for Reinsurance and 98.4% for Insurance & Services.
At March 31, total assets were $13.14 billion and total shareholders’ equity was $2.62 billion. Cash and cash equivalents were $867.5 million, restricted cash was $218.9 million, and total debt carrying value was $770.6 million. Book value per common share increased to $14.15 from $13.76 at year-end; tangible book value per diluted common share, a non-GAAP measure, was $12.79 versus $12.47.
Changes versus the prior comparable period
- Net income declined $42.4 million. Management attributed the principal underwriting comparison to lower favorable prior-year reserve development: $38.9 million in Q1 2024 versus $105.4 million in Q1 2023. The prior-year amount included $101.6 million associated with reserving analyses for the 2023 loss portfolio transfer.
- Excluding favorable development linked to that transfer, management reported higher underwriting income year over year, citing cost savings, lower attritional losses, and no catastrophe losses in Q1 2024, compared with catastrophe losses in Q1 2023.
- Gross premiums written fell to $906.6 million from $1.11 billion. Management cited the movement of certain lines to Corporate, including a non-renewed workers’ compensation program and a planned cyber-program transition, as well as lower premiums in some businesses.
- Investment income increased, primarily with higher interest income from the debt portfolio. Unrealized losses on available-for-sale securities reduced other comprehensive income by $18.4 million, contributing to a $20.5 million total other comprehensive loss.
- Interest expense rose to $20.5 million from $12.8 million, including $7.1 million of funds-withheld interest related to the 2023 loss portfolio transfer and higher variable interest on the SEK subordinated notes.
Liquidity, debt, outlook, and notable items
Operating cash flow was positive but lower year over year; cash, cash equivalents and restricted cash together were $1.09 billion at quarter-end. Restricted cash and investments support reinsurance obligations and letters of credit and are not all freely available. The company reported $1.26 billion of letters of credit issued, compliance with debt and facility covenants, and no borrowings under its $300 million revolving credit facility. Management stated that subsidiary dividend capacity was approximately $810 million as of December 31, 2023, subject to regulatory and other constraints.
After quarter-end, SiriusPoint issued $400 million of 7.0% senior notes due 2029 and redeemed its $400 million of 2016 senior notes and $115 million of 2015 senior notes, using note proceeds and available cash. The reported March 31 debt balance therefore predates this refinancing. A separate April 30 agreement provides for a workers’ compensation loss portfolio transfer covering approximately $400 million of reserves, subject to approvals and other conditions; closing was anticipated around June 30, 2024.
Management targeted full-year 2024 net investment income of $250 million to $265 million. It said inflation estimates were within established reserves, while noting continuing uncertainty and ongoing monitoring. The company cited market, catastrophe, reserve adequacy, foreign-exchange, credit-rating, tax, cyber, climate, geopolitical, regulatory, and liquidity risks. Bermuda’s 15% corporate income tax is expected to apply to in-scope Bermuda operations beginning in 2025, with increased tax expense anticipated. Management reported effective disclosure controls and no material adverse litigation known to it.
Important facts for investors to verify
- Whether reserve assumptions remain adequate and how much favorable prior-year development, including LPT-related development, affects future results.
- Whether premium contraction and the weaker Insurance & Services underwriting result are temporary or persist, and how the reported combined ratios develop.
- The final cost, terms, and effect on debt and liquidity of the April 2024 refinancing, including the cash used to redeem legacy notes.
- Whether the proposed workers’ compensation LPT receives approvals, closes on expected terms, and transfers the intended exposures and claims-administration responsibilities.
- Whether the $250 million–$265 million investment-income target is achieved amid interest-rate, credit-spread, and investment-market movements, and how Bermuda tax changes affect future earnings.