Global specialty re/insurer SiriusPoint has reported net income of $139 million for the first quarter of 2023 on a core combined ratio of 80.5%, helped by a significant improvement in the performance of its reinsurance segment.
The company’s Q1 income this year represents a $358 million increase over last year’s Q1 loss, when SiriusPoint faced large losses on investments and underwriting exposure to the war in Ukraine.
This ultimately led to the insurer reporting a full-year loss of $403 million, but it also undertook a major property cat restructure and a retreat from catastrophe-exposed business over the year, which, in tandem with an improved reinsurance pricing environment, seems to be paying dividends.
For Q1, SiriusPoint reports that its reinsurance segment generated underwriting income of $79.7 million on a 69.3% combined ratio, compared to $3.1 million on a 99.0% combined ratio for the same period last year.
At the same time, reinsurance gross premiums written decreased by $128.0 million to $396.2 million due to the restructuring of both property and casualty lines.
The picture also improved for the company’s insurance and services segment, which generate income of $40.3 million compared to $23.6 million previously, with higher underwriting income mainly due to increased favourable prior year loss reserve development and premium growth that generated underwriting income.
Gross premiums written for this segment increased by $180.5 million to $664.0 million driven by growth in premiums from strategic partnerships and A&H.
Together, these segments contributed to overall underwriting income of $157 million, with catastrophes contributing 1.3 percentage points to the combined ratio as losses remained stable at $7.0 million.
Investment income for the quarter was $73.6 million versus a loss of $205.1 million in Q1 2022.
“We are pleased with the first quarter results,” said CEO Scott Egan. “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,” he continued. “Our people have been working incredibly hard to improve the business and we continue to make progress in creating ‘One SiriusPoint.’ … We still have much to do and are excited about the opportunities ahead.”
“We have a clear path for delivery for the rest of the year with an ambition to keep improving,” Egan concluded. “We look forward to sharing updates on our progress during 2023.”
