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SiriusPoint hit with $287mn in cat losses in Q3, drops to $266mn underwriting loss

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Bermuda (re)insurer SiriusPoint fell to a $266mn underwriting loss in the third quarter, hurt by $287mn in catastrophe claims that were principally driven by Hurricane Ida and the European flooding in July.

The company reported a $48mn net loss in the quarter, amounting to a $0.34 net loss per share. A year ago, Third Point Re and Sirius International combined to generate a $68mn net profit.

SiriusPoint’s accident and health business produced a $15mn underwriting profit in the quarter and an 86.4% combined ratio, an improvement from the $0.1mn underwriting gain a year ago.

The losses in the (re)insurer’s specialty segment expanded to $6mn from $1mn last year. The $264mn underwriting loss in property was far wider than the $27mn underwriting loss a year ago.

The company had previously said it expected to record between $70mn and $100mn in losses from the European floods in July.

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SiriusPoint executives have said in the run up to the close of the company’s merger deal and in subsequent months that it planned to re-evaluate its property cat exposure, which chairman and CEO Sid Sankaran on Wednesday called a “work in progress”.

“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,” Sankaran said in a statement.

Upon taking the top job, Sankaran included remediating the companies’ legacy portfolios as one of three pillars of SiriusPoint’s strategy.

“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.”

Net investment income jumped by 64% in the quarter to $200mn, including a 16.3% return from the (re)insurer’s investment in the TP Enhanced Fund.

Sankaran has emphasized SiriusPoint’s speed as a competitive advantage, and since March, the company has quickly struck a series of prominent investment and capacity deals as it moves to implement a strategic shift.

In recent months, the (re)insurer has announced backing for InsurTech Joyn, start-up insurance provider Vouch, cyber MGA Corvus, travel insurer Outdoorsy, and D&O writer Banyan Risk, among others.

Earlier this month, the company disclosed an investment and capacity arrangement in parametric solutions MGA Parameter Climate, which is led by parametrics pioneer Martin Malinow.

“Our focus remains on delivering sustainable underwriting profitability to create value for our shareholders,” Sankaran also said.

“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.”

In August, SiriusPoint entered a loss portfolio transfer deal with Bermuda-based run-off specialist Compre to transfer workers’ comp and asbestos and environmental liabilities.

“We expect our actions and improvements each quarter to deliver progress towards the transformational and profitable company we are seeking to become,” Sankaran concluded.

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