Specialty insurer and reinsurer, SiriusPoint Ltd., has announced a combined ratio of 152% and a net underwriting loss of $266 million for the third quarter of 2021, driven largely by the impacts of Hurricane Ida and the European floods in July.
Year-on-year, SiriusPoint’s underwriting result has deteriorated further from the $29.7 million loss in Q3 2020. And it’s a similar story for the first nine months of the year, with the company’s underwriting loss moving from $27.3 million in 2020 to $223.8 million this year.
For both periods, SiriusPoint attributes the decline to Hurricane Ida in the U.S. and the severe flooding across parts of Europe in July.
For Q3 2021, catastrophe losses, net of reinsurance and reinstatement premiums, totalled $286.5 million, adding 55.9 percentage points to the combined ratio for the period. This includes $132 million for the European floods and $100 million for Ida.
In comparison, catastrophe losses in Q3 2020, net of reinsurance and reinstatement premiums, amounted to just $29.6 million.
During the first nine months of the year, SiriusPoint has reported catastrophe losses, net of reinsurance and reinstatement premiums, of $304.9 million, which includes the Q3 losses and impacts of other cat events throughout the year. In 2020, SiriusPoint recorded 9M catastrophe losses of $29.6 million.
Overall, net premiums earned increased 261% to $512.1 million for Q3 2021, driven mainly by an increase in net premiums earned of $390.6 million as a result of new premiums from the legacy Sirius Group companies.
For 9M 2021, net premiums earned jumped by $805.5 million, year-on-year, to $1.23 billion, primarily as a result of an increase in net premiums earned of $866.4 million as a result of new premiums from the legacy Sirius Group companies from the date of acquisition.
Taking a closer look at the performance by segment, and the re/insurer’s Property arm fell to a net underwriting loss of $264.7 million for Q3 2021 with a combined ratio of 275.6%. This represents a decline from the prior year period, which SiriusPoint attributes to higher cat losses from the European floods and Ida.
Within Property, gross written premiums increased by more than 372% to $182 million, driven by an increase in premiums of $173.2 million as a result of new premiums from the legacy Sirius Group companies.
In the Accident & Health (A&H) segment, SiriusPoint has reported net underwriting income of $15.2 million for Q3 2021 and a combined ratio of 86.4%, compared with underwriting income of just $0.1 million a year earlier. The firm attributes this improvement to favorable loss ratio trends in its healthcare products due to the recognition of lower healthcare utilization rates that we attribute to the COVID-19 global pandemic.
Within A&H, gross written premiums increased by $117.9 million, year-on-year, to $118.1 million for the third quarter of 2021.
In its Specialty unit, the firm has announced a net underwriting loss of $6.4 million and a combined ratio of 102.6%, compared with an underwriting loss of $1.3 million a year earlier. Gross written premiums here increased by 344.2% to $350.9 million.
In Runoff & Other, the underwriting loss also worsened in Q3 2021 to $9.9 million from $1.5 million in the prior year period. The segment has reported gross written premiums of $2.7 million for Q3 2021, which represents a year-on-year decline of $0.2 million.
On the asset side of the balance sheet, SiriusPoint has announced net investment income of $199.8 million for the third quarter of 2021, compared with $122 million a year earlier.
Sid Sankaran, Chairman and Chief Executive Officer (CEO), SiriusPoint, commented: “The losses the industry has reported – not just this quarter but in the past few years – serve to validate our focus on managing the volatility of our Property business, as we continue to implement the changes identified by our line-by-line business review.
“We are making strong progress exiting risks that no longer fit our risk profile or where we do not see attractive risk adjusted returns – the full impact of our efforts will materialize next year due to the heavy January renewal nature of the business. Our losses are offset this quarter by strong returns from our investment portfolio.
“Our focus remains on delivering sustainable underwriting profitability to create value for our shareholders. This will be achieved by reallocating capital away from property cat and investment risk into our MGA platform within Insurance & Services, combined with rigorous risk management and disciplined underwriting. We expect our actions and improvements each quarter to deliver progress towards the transformational and profitable company we are seeking to become.”
