SiriusPoint Ltd. Q3 FY2025 earnings call

• Strong underwriting performance with core combined ratio of 89.1%, 11% increase in underwriting income vs last year, no catastrophe losses in Q3.
• Operating return on equity of 17.9% in Q3, year-to-date operating return on equity of 16.1%.
• Announced sale of 100% stake in Armada and 49% stake in Arcadian for combined proceeds of $389 million, recognizing over $200 million of off-balance sheet value.
• S&P upgraded outlook to positive, joining AM Best and Fitch upgrades.
• Gross premiums written grew 26% year-over-year in Q3, sixth consecutive quarter of double-digit growth.
• Accident & Health division acts as volatility shock absorber, accounts for almost $1 billion of annualized gross premiums written.
• Disciplined approach to MGA partnerships, with 90% of MGA premiums from partners with 3+ years of relationship, 97% of previously onboarded partners continued business.
• Capital remains strong, Q3 BSCR ratio improved to 226%, expects to increase post MGA transactions.

Insurance & Services segment: Gross written premium increased $186 million or 49% to $562 million in the quarter, with a combined ratio of 90.1%. Year-to-date, gross written premium increased $367 million or 26% to $1.8 billion. Reinsurance segment: Gross written premium decreased by $5 million or 2% to $310 million in the quarter. On a 9-month basis, gross written premium increased by 1%, while on a net basis, premiums written decreased by 3%. The combined ratio for the quarter increased by 3.3 points to 87.9%.

• Reaffirm commitment to 12% to 15% ROE across the cycle.
• Expect proceeds from MGA sales to redeem $200 million of preference shares at rate reset, reducing leverage ratio from 31% to 24%.

• Potential impacts from market conditions affecting pricing and underwriting margins.
• Catastrophe losses, with first 9 months catastrophe losses over $50 million higher than prior year.
• Changes in regulatory environment impacting business operations.

Q: First of all, congrats on the quarter, and I appreciate the slide -- the new slide, Slide 13, is nice to see. Question on, I guess, insurance and kind of to Jim's last couple of comments on the attritional loss ratio improvements. You've taken it nicely down from mid-60s to now teasing 60, low 60s. And I assume part of that -- a good part of that is because of the mix shift in the company in that segment. I guess, so as we think about continued probably mix shift A&H, Surety and different things that you're really growing in and think about that line item for the attritional accident year loss ratio, it seems like are we teasing to get below 60% as we look forward is the question.

A: Michael, thanks very much for the question, and thanks for your comments at the beginning as well. Jim, you can jump in a second as well. Look, I think, Michael, the way I think about it is, obviously, we've done a lot of the hard work over the past few years, which was really reshaping the portfolio. Obviously, because of the profile of our distribution, sometimes when we win a new MGA relationship, that can see things sort of move. But I wouldn't expect any material movements, if I'm honest with you, as we sort of look out and over. Our ambition is always to reduce it, obviously, all of our ratios. But obviously, we have to take into account the environment as well. So I would say, look, it's more sort of now, Michael, to be honest, rather than sort of incremental moves. But obviously, if that mix shift changes because we are making decisions or because we win sort of new relationships, then obviously, we'll be very clear in our guidance. But Jim, do you want to add anything beyond what I've said?

Q: I guess given the pretty significant jump in insurance growth this quarter, I know last year is when I think you took out $90-some million. So I know we're apples-to-apples from this year to last year. But just help us think about how we can, I guess, model the premium growth going forward. Was there any anomalies in this quarter in either A&H or Surety that kind of led to the pretty significant growth this quarter?

A: Not anomalies. I definitely wouldn't describe them as that, Michael. I mean what can happen, obviously, is we can win new relationships. And obviously, that can impact it. Obviously, we've tried to be clear over the last few quarters, I hope, where we can say we've been sort of leaning into. So I think you can see the difference between our gross growth and our net written growth. And obviously, there's a linkage to the earned premium, which is still to come, which I think is the point that Jim often makes. So look, I think what you could expect subject to market conditions, profitability and a few other assumptions is our ambition is to make sure that we seize the relationships that we bought in, in the 1- to 2-year segment on the pie chart. But obviously, that will be subject to us being satisfied with the sort of underwriting performance and obviously, market conditions, but I think that's effectively what we would be looking into. There's not really any anomalies per se. But Jim, do you want to add anything?