An increase in pre-tax catastrophe losses, net of reinsurance and reinstatement premiums, to $109 million adversely impacted Sirius International Insurance Group, Ltd.’s underwriting performance in the third-quarter of 2019, with the firm reporting a net loss of $3 million.
Catastrophe losses increased by almost 42% for Sirius in Q3 when compared with the $77 million recorded a year earlier, driven mostly by the impacts of hurricane Dorian ($44mn) and typhoon Faxai ($52mn).
The impact of higher losses saw the combined ratio rise to 123% versus 111% a year earlier, driven by underwriting losses of $74 million in Global Property, $26 million in Specialty & Casualty and $3 million in Run-off and Other, somewhat offset by $18 million of underwriting income in Global A&H.
Commenting on the firm’s catastrophe loss experience in the quarter, Chief Financial Officer (CFO), Ralph Salamone, said: “We recorded $109 million of catastrophe losses in the third quarter, mainly from Hurricane Dorian and Typhoon Faxai. Our Dorian loss is consistent with an industry loss of $8.5 billion, and our Faxai loss implies an industry loss of around $9 billion.
“We continue to invest in businesses such as environmental and surety insurance as well as ArmadaHealth. These investments are a drag on our current results but are expected to provide diversifying profits in the future.”
For the third-quarter of 2019, the company’s gross written premiums increased 4% to $414 million, and remained relatively flat at $1.5 billion for the first nine months of the year.
Sirius International’s investment portfolio returned 1.2% in original currencies and 0.8% in U.S. Dollars, and 4.8% and 4.4% for the nine month period, respectively.
“Our 2019 results continued to benefit from strong investment performance, but our underwriting results came up short, primarily due to catastrophe losses, in the third quarter.
“Operationally, we are making progress. During the quarter we globalized our underwriting leadership creating a more unified organization. This organizational change helps us to more holistically and efficiently serve our clients across business lines and geographies, and drive underwriting portfolio enhancements. These changes also allow us to drive in operating improvements to facilitate future growth.
“Finally, in addition to growing in our reinsurance business organically, we continue to invest in the build out of our new specialty insurance lines,” said Salamone.
