Global specialty insurer and reinsurer SiriusPoint has reported a decline in results for the first quarter of 2022, mainly due to a large loss on investments, as well as an underwriting hit due to exposures to the war between Russia and Ukraine.
The company reported a net loss of $217.0 million for the quarter, compared to net income of $168.4 million for the same period in the previous year.
The result was largely attributable to a net investment loss of $205.1 million, compared to investment income of $186.5 million last year.
More than half of the investment loss stemmed from one investment in the TP Enhanced Fund, although SiriusPoint also blamed rising interest rates and the widening of credit spreads.
However, core income also declined from $57.9 million to $26.7 million in Q1 2022, with core underwriting income likewise decreasing from $15.2 million to $12.7 million.
According to SiriusPoint, underwriting results were impacted by higher losses last quarter, including $13.3 million of losses from political risk, trade credit, and aviation lines of business exposed to the conflict between Russia and Ukraine.
During Q1, catastrophe losses, net of reinsurance and reinstatement premiums, amounted to $6.9 million, mostly from the European February storms and Australian flooding.
Despite this, SiriusPoint reported an improved combined ratio of 93.7% for the period, although its core combined ratio deteriorated from that level to 97.5%.
Specifically, the reinsurance segment generated income of $3.1 million, compared to segment income of $16.5 million in Q1 2021.
But reinsurance gross premiums written increased by $365.5 million to $524.2 million as a result of a full quarter of premium from the legacy Sirius Group companies.
SiriusPoint maintains that, in comparison to 2021, its reinsurance global property portfolio has been “reduced with a better mix by client, product and geography,” with cuts to gross and net property exposures and further reinsurance purchased “to improve our volatility profile.”
The Insurance & Services segment generated segment income of $23.6 million, versus $41.4 million previously, and gross premiums written of $483.5 million, up $292.6 million on last year.
“Our underwriting results showed positive progress in the first quarter of 2022, with a 93.7% combined ratio, reflecting the diligent execution of our strategic priorities to transform our business,” said SiriusPoint Chairman and CEO Sid Sankaran.
“Our focus on shifting our business mix towards our promising Insurance & Services segment and strategic partnerships approach gained further traction this quarter, with premiums split almost equally between Insurance & Services and Reinsurance, compared to approximately 60% Reinsurance and 40% Insurance & Services in 2021,” he continued.
“Our fee business has strong double digit sequential growth in revenue and income. We also saw progress in our Reinsurance segment, where we achieved profitable underwriting performance, reflective of the discipline with which we have approached the renewal of attractive business within the scope of our risk appetite.”
“We see positive momentum in our performance as we move towards the mid-point of the year. The capital position of the Company is strong, and we have a high degree of financial flexibility that allows for a responsive and nimble approach to market opportunities as we continue to grow Insurance & Services and our MGA relationships.”
