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What changed in SiriusPoint Ltd's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SiriusPoint Ltd's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+633 added−605 removedSource: 10-K (2024-02-29) vs 10-K (2023-02-24)

Top changes in SiriusPoint Ltd's 2023 10-K

633 paragraphs added · 605 removed · 444 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

130 edited+81 added−72 removed162 unchanged
Biggest changeJanuary 1, 2023 SiriusPoint Net After-Tax Loss Modelled Industry Loss SiriusPoint Gross Loss Net After Reinsurance and Reinstatements Net After- Tax Net After- Tax as % of Total Capital (1) Net After-Tax as % of Common Shareholders’ Equity (1) ($ in millions) 1-in-100 year event Southeast U.S. $ 196,997 $ 226 $ 81 $ 80 3 % 4 % West Coast U.S. 55,531 198 92 90 3 % 5 % Northeast U.S. 55,295 134 72 68 2 % 4 % Europe $ 32,441 $ 68 $ 46 $ 37 1 % 2 % 1-in-250 year event Southeast U.S. $ 312,105 $ 300 $ 95 $ 93 3 % 5 % West Coast U.S. 97,714 275 141 135 5 % 7 % Northeast U.S. 101,764 258 97 94 3 % 5 % Europe $ 46,429 $ 84 $ 50 $ 40 1 % 2 % January 1, 2022 SiriusPoint Net After-Tax Loss Modelled Industry Loss SiriusPoint Gross Loss Net After Reinsurance and Reinstatements Net After- Tax Net After- Tax as % of Total Capital (1) Net After-Tax as % of Common Shareholders’ Equity (1) ($ in millions) 1-in-100 year event Southeast U.S. $ 140,850 $ 286 $ 129 $ 120 4 % 5 % West Coast U.S. 46,744 235 107 97 3 % 4 % Northeast U.S. 38,174 195 95 85 3 % 4 % Europe $ 38,034 $ 217 $ 66 $ 55 2 % 2 % 1-in-250 year event Southeast U.S. $ 224,184 $ 397 $ 211 $ 196 6 % 9 % West Coast U.S. 82,185 323 141 128 4 % 6 % Northeast U.S. 68,049 342 134 122 4 % 5 % Europe $ 53,225 $ 266 $ 71 $ 60 2 % 3 % (1) Total capital and common shareholders’ equity as of December 31, 2022 and 2021.
Biggest changeJanuary 1, 2024 SiriusPoint Net After-Tax Loss SiriusPoint Gross Loss Net After Reinsurance and Reinstatements Net After- Tax (1) Net After- Tax as % of Total Capital (2) Net After-Tax as % of Common Shareholders’ Equity (2) ($ in millions) 1-in-100 year event Southeast U.S. $ 206 $ 64 $ 54 2 % 2 % West Coast U.S. 163 72 63 2 % 3 % Northeast U.S. 118 58 48 1 % 2 % Europe $ 59 $ 51 $ 43 1 % 2 % 1-in-250 year event Southeast U.S. $ 265 $ 111 $ 94 3 % 4 % West Coast U.S. 232 89 77 2 % 3 % Northeast U.S. 208 75 62 2 % 3 % Europe $ 72 $ 63 $ 53 2 % 2 % January 1, 2023 SiriusPoint Net After-Tax Loss SiriusPoint Gross Loss Net After Reinsurance and Reinstatements Net After- Tax Net After- Tax as % of Total Capital (2) Net After-Tax as % of Common Shareholders’ Equity (2) ($ in millions) 1-in-100 year event Southeast U.S. $ 226 $ 81 $ 80 3 % 4 % West Coast U.S. 198 92 90 3 % 5 % Northeast U.S. 134 72 68 2 % 4 % Europe $ 68 $ 46 $ 37 1 % 2 % 1-in-250 year event Southeast U.S. $ 300 $ 95 $ 93 3 % 5 % West Coast U.S. 275 141 135 5 % 7 % Northeast U.S. 258 97 94 3 % 5 % Europe $ 84 $ 50 $ 40 1 % 2 % (1) As of January 1, 2024, net after-tax reflects the 15% corporate income tax rate for Bermuda.
To manage catastrophe risk, we license third-party global property catastrophe modeling software, and we also utilize our own proprietary models to price risk, calculate expected PML estimates, and consolidate and report on all worldwide property exposures. This platform is used to calculate individual and aggregate PMLs by combining multiple third-party and proprietary models, actuarial methods, and underwriting judgement.
To manage and price catastrophe risk, we license third-party global property catastrophe modeling software, and we also utilize our own models to price risk, calculate expected PML estimates, and consolidate and report on all worldwide property exposures. This platform is used to calculate individual and aggregate PMLs by combining multiple third-party and proprietary models, actuarial methods, and underwriting judgement.
This objective and associated policies and guidelines ("Investment Policy and Guidelines") are established by the Investment Committee of the SiriusPoint Board of Directors. Certain relevant subsidiaries also approve policies and guidelines substantially similar to, and consistent with, the SiriusPoint Investment Policy and Guidelines, in accordance with local laws and regulations.
This objective and the associated policies and guidelines ("Investment Policy and Guidelines") are established by the Investment Committee of the SiriusPoint Board of Directors. Certain relevant subsidiaries also approve policies and guidelines substantially similar to, and consistent with, the SiriusPoint Investment Policy and Guidelines, in accordance with local laws and regulations.
A controller includes (i) the managing director of the registered insurer or its parent company; (ii) the chief executive of the registered insurer or of its parent company; (iii) a shareholder controller (as defined below); and (iv) any person in accordance with whose directions or instructions the directors of the registered insurer or of its parent company are accustomed to act.
A controller includes (i) the managing director of the registered insurer or its parent company; (ii) the chief executive of the registered insurer or its parent company; (iii) a shareholder controller (as defined below); and (iv) any person in accordance with whose directions or instructions the directors of the registered insurer or of its parent company are accustomed to act.
In particular, the Parent Board must: • ensure that operational and oversight responsibilities of the group are clearly defined and documented and that the reporting of material deficiencies and fraudulent activities are transparent and devoid of conflicts of interest; • establish systems for identifying on a risk-sensitive basis those policies and procedures that must be reviewed annually and those policies and procedures that must be reviewed at other regular intervals; • establish a risk management and internal controls framework and ensure that it is assessed regularly and such assessment is reported to the Parent Board, the chief executive officer and senior executives; • establish and maintain sound accounting and financial reporting procedures and practices for the Regulatory Group; and • establish and keep under review group functions relating to actuarial, compliance, internal audit and risk management functions which must address certain specific requirements as set out in the Group Rules.
In particular, the Parent Board must: • ensure that the operational and oversight responsibilities of the group are clearly defined and documented and that the reporting of material deficiencies and fraudulent activities are transparent and devoid of conflicts of interest; • establish systems for identifying on a risk-sensitive basis those policies and procedures that must be reviewed annually and those policies and procedures that must be reviewed at other regular intervals; • establish a risk management and internal controls framework and ensure that it is assessed regularly and such assessment is reported to the Parent Board, the chief executive officer and senior executives; • establish and maintain sound accounting and financial reporting procedures and practices for the Regulatory Group; and • establish and keep under review group functions relating to actuarial, compliance, internal audit and risk management functions which must address certain specific requirements as set out in the Group Rules.
SiriusPoint's U.S.-based insurance and reinsurance subsidiaries, and their respective domiciliary state regulators (the "Domiciliary States") are as follows: • SiriusPoint America Insurance Company (New York State Department of Financial Services); • Oakwood Insurance Company (Tennessee Department of Commerce and Insurance); and • SiriusPoint Specialty Insurance Corporation (New Hampshire Insurance Department).
SiriusPoint's U.S.-based insurance and reinsurance subsidiaries, and their respective domiciliary state regulators (the "Domiciliary States") are as follows: • SiriusPoint America Insurance Company (New York State Department of Financial Services); • SiriusPoint Specialty Insurance Corporation (New Hampshire Insurance Department); and • Oakwood Insurance Company (Tennessee Department of Commerce and Insurance).
Diversity, Equity, Inclusion, & Belonging We value and support the unique voices, backgrounds, lifestyles, and contributions of our diverse global employee base that contributes to our culture every day. Diversity, Equity, Inclusion, and Belonging (“DEI&B”) are important to our success.
Diversity, Equity, Inclusion, & Belonging Diversity, Equity, Inclusion, and Belonging (“DEI&B”) are important to our success. We value and support the unique voices, backgrounds, lifestyles, and contributions of our diverse global employee base that contributes to our culture every day.
The Cyber Code defines a cyber reporting event as being any act that results in the 19 unauthorized access to, disruption or misuse of the electronic systems or information stored on such systems of a licensed undertaking, including any breach of security leading to the loss or unlawful destruction or unauthorized disclosure of or access to such systems or information, where (i) a cyber reporting event has the likelihood of adversely impacting policyholders or clients; (ii) an insurer has reached a view that there is a likelihood that loss of its system availability will have an adverse impact on its insurance business; (iii) an insurer has reached the view that there is a likelihood that the integrity of its information or data has been compromised and may have an adverse impact on its insurance business; (iv) an insurer has become aware that there is a likelihood that there has been unauthorized access to its information systems whereby such would have an adverse impact on its insurance business; or (v) an event has occurred for which a notice is required to be provided to a regulatory body or governmental agency.
The Cyber Code defines a cyber reporting event as being any act that results in the unauthorized access to, disruption or misuse of the electronic systems or information stored on such systems of a licensed undertaking, including any breach of security leading to the loss or unlawful destruction or unauthorized disclosure of or access to such systems or information, where (i) a cyber reporting event has the likelihood of adversely impacting policyholders or clients; (ii) an insurer has reached a view that there is a likelihood that loss of its system availability will have an adverse impact on its insurance business; (iii) an insurer has reached the view that there is a likelihood that the integrity of its information or data has been compromised and may have an adverse impact on its insurance business; (iv) an insurer has become aware that there is a likelihood that there has been unauthorized access to its information systems whereby such would have an adverse impact on its insurance business; or (v) an event has occurred for which a notice is required to be provided to a regulatory body or governmental agency.
In particular, the GSSA should, among other things, include consideration of the relationship between risk management, the quality and quantity of capital resources, the impact of risk mitigation techniques and diversification and correlation effects between material risks; describe the Regulatory Group's risk appetite; be forward-looking; include appropriate stress and scenario testing and appropriately reflect all assets and liabilities, material off-balance sheet 18 arrangements, material intra-group transactions, relevant managerial practices, systems and controls and a valuation basis that is aligned with the risk characteristics and business model of the group.
In particular, the GSSA should, among other things, include consideration of the relationship between risk management, the quality and quantity of capital resources, the impact of risk mitigation techniques and diversification and correlation effects between material risks; describe the Regulatory Group's risk appetite; be forward-looking; include appropriate stress and scenario testing and appropriately reflect all assets and liabilities, material off-balance sheet arrangements, material intra-group transactions, relevant managerial practices, systems and controls and a valuation basis that is aligned with the risk characteristics and business model of the group.
The NAIC's amended Insurance Holding Company System Regulatory Model Act (the "Amended Holding Company Model Act"), addresses the concept of "enterprise risk" within an insurance holding company system and provides enhanced authority for states to regulate insurers as well as their affiliated entities and imposed more extensive informational requirements on parents and other affiliates of licensed insurers or reinsurers for the purpose of protecting licensed companies from enterprise risk.
The NAIC's Insurance Holding Company System Regulatory Model Act (the "Holding Company Model Act"), addresses the concept of "enterprise risk" within an insurance holding company system and provides enhanced authority for states to regulate insurers as well as their affiliated entities and imposed more extensive informational requirements on parents and other affiliates of licensed insurers or reinsurers for the purpose of protecting licensed companies from enterprise risk.
A company may not declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that: (i) the company is, or would after the payment be, unable to pay its liabilities as they become due; or (ii) the realizable value of the company’s assets would thereby be less than its liabilities.
A company may not declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that: (i) the company is, or would after the payment be, 20 unable to pay its liabilities as they become due; or (ii) the realizable value of the company’s assets would thereby be less than its liabilities.
SiriusPoint's U.S.-based insurance and reinsurance subsidiaries may be required to participate in guaranty funds to help pay the obligations of impaired, insolvent or failed insurance companies to their policyholders and claimants. Such participation generally includes an assessment based on the premiums written by the insurer in such state applicable to particular lines of business.
SiriusPoint's U.S.-based insurance and 22 reinsurance subsidiaries may be required to participate in guaranty funds to help pay the obligations of impaired, insolvent or failed insurance companies to their policyholders and claimants. Such participation generally includes an assessment based on the premiums written by the insurer in such state applicable to particular lines of business.
The SFSA has broad supervisory and administrative powers over such matters as licenses, governance and internal control, standards of solvency, investments, methods of accounting, form and content of financial 24 statements, minimum capital and surplus requirements, and annual and other report filings. Non-compliance can be sanctioned by warnings, fees or withdrawal of license.
The SFSA has broad supervisory and administrative powers over such matters as licenses, governance and internal control, standards of solvency, investments, methods of accounting, form and content of financial statements, minimum capital and surplus requirements, and annual and other report filings. Non-compliance can be sanctioned by warnings, fees or withdrawal of license.
In addition, all states, including the Domiciliary States, have enacted laws substantially similar to the NAIC's risk-based capital ("RBC") standards for property and casualty companies, which are designed to determine minimum capital 20 requirements and to raise the level of protection that statutory surplus provides for policyholder obligations.
In addition, all states, including the Domiciliary States, have enacted laws substantially similar to the NAIC's risk-based capital ("RBC") standards for property and casualty companies, which are designed to determine minimum capital requirements and to raise the level of protection that statutory surplus provides for policyholder obligations.
While the federal government does not directly regulate the insurance business, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") made sweeping changes to the regulation of financial services entities, products and markets. The Dodd-Frank Act established the Federal Insurance Office ("FIO") within the Treasury Department to monitor the insurance industry and certain lines of business.
While the federal government does not directly regulate the insurance business, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") made sweeping changes to the regulation of financial services entities, products and markets. 23 The Dodd-Frank Act established the Federal Insurance Office ("FIO") within the Treasury Department to monitor the insurance industry and certain lines of business.
In addition, Lloyd's prescribes, in respect of its managing agents and corporate and individual members ("Members"), Principles relating to their management and control, financial resources and various 26 other requirements. In addition, as dual-regulated firms, managing agents must comply with the relevant parts of the PRA Rulebook and the FCA Handbook (including FCA capital resources requirements).
In addition, Lloyd's prescribes, in respect of its managing agents and corporate and individual members ("Members"), Principles relating to their management and control, financial resources and various other requirements. In addition, as dual-regulated firms, managing agents must comply with the relevant parts of the PRA Rulebook and the FCA Handbook (including FCA capital resources requirements).
While qualifying insurers are not currently required to maintain its statutory capital and 16 surplus at this level, the TCL serves as an early warning tool for the BMA and failure to maintain statutory capital at least equal to the TCL will likely result in increased regulatory oversight.
While qualifying insurers are not currently required to maintain its statutory capital and surplus at this level, the TCL serves as an early warning tool for the BMA and failure to maintain statutory capital at least equal to the TCL will likely result in increased regulatory oversight.
The Amended Holding Company Model Act requires the ultimate controlling person in an insurer's holding company structure to identify and annually report to state insurance regulators material risks within the structure that could pose enterprise risk to the insurer. Each of the Domiciliary States has substantially adopted the Amended Holding Company Model Act.
The Holding Company Model Act requires the ultimate controlling person in an insurer's holding company structure to identify and annually report to state insurance regulators material risks within the structure that could pose enterprise risk to the insurer. Each of the Domiciliary States has substantially adopted the Holding Company Model Act.
Generally, it is not permitted without a special license granted by the Minister of Finance to insure Bermuda domestic risks or risks of persons of, in or based in Bermuda. The Personal Information Protection Act 2016 (“PIPA”) is the principal Bermuda legislation regulating the right to personal informational privacy.
Generally, it is not permitted without a special license granted by the Minister of Finance to insure Bermuda’s domestic risks or risks of persons of, in or based in Bermuda. The Personal Information Protection Act 2016 (“PIPA”) is the principal Bermuda legislation regulating the right to personal informational privacy.
We have received approval from the BMA to file a consolidated group financial condition report, inclusive of SiriusPoint, SiriusPoint Bermuda and Alstead Re. Minimum Liquidity Ratio The Insurance Act provides a minimum liquidity ratio for general business insurers.
We have received approval from the BMA to file a consolidated group financial condition report, inclusive of SiriusPoint, SiriusPoint Bermuda and Alstead Re. 16 Minimum Liquidity Ratio The Insurance Act provides a minimum liquidity ratio for general business insurers.
Where an insurer fails to meet its MSM or minimum liquidity ratio on the last day of any financial year, it is prohibited from declaring or paying any dividends during the next financial year without the approval of the BMA.
Where an insurer fails to meet its 17 MSM or minimum liquidity ratio on the last day of any financial year, it is prohibited from declaring or paying any dividends during the next financial year without the approval of the BMA.
As an exempted company, SiriusPoint may not participate in certain business transactions, including the carrying on of business of any kind in Bermuda, except in furtherance of its business carried on outside Bermuda or under license granted by the Minister of Finance.
As an exempted company, SiriusPoint may not participate in certain business transactions, including the carrying on of business of any kind in Bermuda, except in furtherance of its business carried on outside Bermuda or under a license granted by the Minister of Finance.
Based upon these formulas, as of December 31, 2022, SiriusPoint America has dividend capacity without prior approval of the applicable regulatory authority, while Oakwood and SiriusPoint Specialty do not have dividend capacity without prior approval of the applicable regulatory authorities. 22 U.S.
Based upon these formulas, as of December 31, 2022, SiriusPoint America has dividend capacity without prior approval of the applicable regulatory authority, while Oakwood and SiriusPoint Specialty do not have dividend capacity without prior approval of the applicable regulatory authorities. U.S.
The amounts of capital required by Lloyd's to be maintained in the form of Funds at Lloyd's to support the activities of the Members of a syndicate is determined by a combination of the managing agent's assessment of capital requirements for the syndicate, and review and challenge by Lloyd's.
The amounts of capital required by Lloyd's to be maintained in the form of Funds at Lloyd's to support the activities of the Members of a syndicate is determined by a combination of the managing agent's assessment of capital requirements for the 27 syndicate, and review and challenge by Lloyd's.
Some states have recently enacted new insurance laws 23 that require certain regulated entities to implement and maintain comprehensive information security programs to safeguard the personal information of insureds and enrollees.
Some states have recently enacted new insurance laws that require certain regulated entities to implement and maintain comprehensive information security programs to safeguard the personal information of insureds and enrollees.
Additionally, we pay reinsurance intermediaries commissions based on negotiated percentages of the premium they produce on non proportional business. See Note 4 “Segment reporting” in our audited consolidated financial statements included elsewhere in this Annual Report for a breakdown of our premiums written by source that individually contributed more than 10% of total gross premiums written.
Additionally, we pay reinsurance intermediaries commissions based on negotiated percentages of the premium they produce on non proportional business. See Note 5 “Segment reporting” in our audited consolidated financial statements included elsewhere in this Annual Report for a breakdown of our premiums written by source that individually contributed more than 10% of total gross premiums written.
Pursuant to this authority, in September 2017, the U.S. and the European Union signed a covered agreement (the "Covered Agreement") to address, among other things, reinsurance collateral requirements.
Pursuant to this authority, in September 2017, the U.S. and the European Union (“EU”) signed a covered agreement (the "Covered Agreement") to address, among other things, reinsurance collateral requirements.
While pricing laws vary from state to state, their objectives are generally to ensure that rates are not excessive, unfairly discriminatory or used to engage in unfair price competition. The ability and timing of SiriusPoint's U.S.-based (re)insurance subsidiaries to increase rates are dependent upon the regulatory requirements in each state where policies are sold.
While pricing laws vary from state to state, their objectives are generally to ensure that rates are not excessive, unfairly discriminatory or used to engage in unfair price competition. The ability and timing of SiriusPoint's U.S.-based insurance and reinsurance subsidiaries to increase rates are dependent upon the regulatory requirements in each state where policies are sold.
We seek to maintain a disciplined underwriting strategy which, while considering overall exposure, focuses on writing more business when market terms and conditions are favorable and reducing business volume when terms and conditions become less favorable. We offer clients a wide range of insurance and reinsurance products across multiple lines of business to satisfy risk management needs.
We maintain a disciplined underwriting strategy which, while considering overall exposure, focuses on writing more business when market terms and conditions are favorable and reducing business volume when terms and conditions become less 9 favorable. We offer clients a wide range of insurance and reinsurance products across multiple lines of business to satisfy risk management needs.
SiriusPoint's U.S.-based (re)insurance subsidiaries are subject to state laws and regulations that require investment portfolio diversification and that dictate the quality, quantity and general types of investments they may hold. Non-compliance may cause non-conforming investments to be non-admitted when measuring statutory surplus and, in some instances, may require divestiture.
SiriusPoint's U.S.-based insurance and reinsurance subsidiaries are subject to state laws and regulations that require investment portfolio diversification and that dictate the quality, quantity and general types of investments they may hold. Non-compliance may cause non-conforming investments to be non-admitted when measuring statutory surplus and, in some instances, may require divestiture.
SiriusPoint's investment/finance units continually monitor portfolio composition to ensure compliance with the investment rules applicable to each (re)insurance subsidiary. Under the insurance laws of the Domiciliary States, an insurer is restricted with respect to the timing and the amount of dividends it may pay without prior approval by regulatory authorities.
SiriusPoint's investment/finance units continually monitor portfolio composition to ensure compliance with the investment rules applicable to each insurance and reinsurance subsidiary. Under the insurance laws of the Domiciliary States, an insurer is restricted with respect to the timing and the amount of dividends it may pay without prior approval by regulatory authorities.
For example, New York requires financial institutions, including certain of SiriusPoint's U.S.-based (re)insurance subsidiaries, to establish a cybersecurity program with specific technical safeguards and requirements regarding governance, incident planning, data management, system testing and regulator notification.
For example, New York requires financial institutions, including certain of SiriusPoint's U.S.-based insurance and reinsurance subsidiaries, to establish a cybersecurity program with specific technical safeguards and requirements regarding governance, incident planning, data management, system testing and regulator notification.
Our approach to accessing the market through MGAs involves leaning on the expertise of our partners to create products and services, manage distribution relationships, underwrite risks in accordance with delegating underwriting authorities, issue and service policies on behalf of SiriusPoint and manage claims handling.
For Insurance & Services, our approach to accessing the market through MGAs involves leaning on the expertise of our partners to create products and services, manage distribution relationships, underwrite risks in accordance with delegating underwriting authorities, issue and service policies on behalf of SiriusPoint and manage claims handling.
The Regulatory Group is also required to maintain available statutory economic capital and surplus in an amount that is at least equal to or exceeds the value of its group ECR provided that the group ECR shall at all times be an amount equal to or exceeding the group minimum solvency margin.
The Regulatory Group is also required to maintain available statutory economic capital and surplus in an amount that is at least equal to or exceeds the value of its group ECR provided that the group ECR shall at all times be an amount equal to or exceed the group minimum solvency margin.
Prudential regulation and supervision of insurance undertakings is carried out by the PRA and the regulation and supervision of conduct matters is 25 carried out by the FCA.
Prudential regulation and supervision of insurance undertakings is carried out by the PRA and the regulation and supervision of conduct matters is carried out by the FCA.
Any entity that must satisfy economic substance requirements but fails to do so could face automatic disclosure to competent authorities in the E.U. of the information filed by the entity with the Bermuda Registrar of Companies in connection with the economic substance requirements and may also face financial penalties, restriction or regulation of its business activities and/or may be struck off as a registered entity in Bermuda.
Any entity that must satisfy economic substance requirements but fails to do so could face automatic disclosure to competent authorities in the EU of the information filed by the entity with the Bermuda Registrar of Companies in connection with the economic substance requirements and may also face financial penalties, restriction or regulation of its business activities and/or may be struck off as a registered entity in Bermuda.
Our approach is to be nimble and reactive to market opportunities within our focus areas of Insurance & Services and Reinsurance, allocating capital where we see profitable opportunity, while remaining disciplined and consistent within our specified risk tolerances and areas of expertise.
Our approach is to be nimble and reactive to market opportunities within our segments of Insurance & Services and Reinsurance, allocating capital where we see profitable opportunity, while remaining disciplined and consistent within our specified risk tolerances and areas of expertise.
Eligible Capital To enable the BMA to better assess the quality of an insurer’s capital resources, Class 3A and Class 4 insurers are required to disclose the makeup of its capital in accordance with the recently introduced ‘3-tiered capital system’.
Eligible Capital To enable the BMA to better assess the quality of an insurer’s capital resources, Class 3A and Class 4 insurers are required to disclose the makeup of its capital in accordance with the ‘3-tiered capital system’.
Reinsurance Recoverables by Rating As of December 31, 2022, we had loss and loss adjustment expenses recoverable, net of $1.4 billion (December 31, 2021 - $1.2 billion). Because retrocessional reinsurance contracts do not relieve us of our obligation to our insureds, the ability to collect balances due from our reinsurers is important to our financial strength.
Reinsurance Recoverables by Rating As of December 31, 2023, we had loss and loss adjustment expenses recoverable, net of $2.3 billion (December 31, 2022 - $1.4 billion). Because retrocessional reinsurance contracts do not relieve us of our obligation to our insureds, the ability to collect balances due from our reinsurers is important to our financial strength.
As of January 1, 2023, we have in place an all-natural perils excess of loss retrocessional reinsurance coverage for loss events impacting our property exposures, replacing the 2022 coverage.
As of January 1, 2024, we have in place an all-natural perils excess of loss retrocessional reinsurance coverage for loss events impacting our property exposures, replacing the 2023 coverage.
U.S. state regulators had 60 months, or five years, to adopt reinsurance reforms removing reinsurance collateral requirements for European Union reinsurers that meet the Covered Agreement's prescribed minimum conditions or else state laws imposing such reinsurance collateral requirements could have been subject to federal preemption.
U.S. state regulators had 60 months, or five years, to adopt reinsurance reforms removing reinsurance collateral requirements for EU reinsurers that meet the Covered Agreement's prescribed minimum conditions or else state laws imposing such reinsurance collateral requirements could have been subject to federal preemption.
If an insurance company has insufficient capital, regulators may act to reduce the amount of insurance it can issue or, in severe situations, assume control of the company. None of SiriusPoint's U.S.-based (re)insurance subsidiaries is currently subject to regulatory scrutiny based on their respective IRIS ratios.
If an insurance company has insufficient capital, regulators may act to reduce the amount of insurance it can issue or, in severe situations, assume control of the company. None of SiriusPoint's 21 U.S.-based insurance and reinsurance subsidiaries is currently subject to regulatory scrutiny based on their respective IRIS ratios.
As of January 1, 2023, commensurate with our gross property catastrophe liability reductions and branch office restructuring, we reduced the number of property proportional treaties we purchase on our treaty reinsurance portfolio to four from in excess of fifteen.
As of January 1, 2024, commensurate with our gross property catastrophe liability reductions and branch office restructuring, we reduced the number of property proportional treaties we purchase on our treaty reinsurance portfolio to two from four as of January 1, 2023 and in excess of fifteen in prior years.
The coverage for 2023 is comprised of a combination of (1) reinsurance placed on lead terms on which several reinsurers participate and (2) several private placements with individual 11 reinsurers at terms and conditions based on individual reinsurer preference. The table below represents a broad summary of coverage and attachment points in-force protection as of January 1, 2023 and 2022.
The coverage for 2024 is comprised of a combination of reinsurance placed on lead terms on which several reinsurers participate and private placements with individual reinsurers at 12 terms and conditions based on individual reinsurer preference. The table below represents a broad summary of coverage and attachment points in-force protection as of January 1, 2024 and 2023.
Our pricing requirements are based on a number of underwriting factors 8 including historical results, analysis of exposure and estimates of future loss costs, a review of other programs displaying similar exposure characteristics, and the MGAs or ceding company's underwriting and claims experience.
Our pricing requirements are based on a number of underwriting factors including historical results, analysis of exposure and estimates of future loss costs, a review of other programs displaying similar exposure characteristics, ceding company's underwriting and claims experience.
Our insurance and reinsurance opera ting subsidiaries are assigned financial strength ratings as follows: AM Best (1) Fitch (2) S&P (3) Rating Outlook Rating Outlook Rating Outlook SiriusPoint Bermuda "A-" (Excellent) Stable "A–" (Strong) Negative "A–" (Strong) Negative SiriusPoint International "A-" (Excellent) Stable "A–" (Strong) Negative "A–" (Strong) Negative SiriusPoint America "A-" (Excellent) Stable "A–" (Strong) Negative "A–" (Strong) Negative SiriusPoint Specialty Insurance Corporation "A-" (Excellent) Stable N/A N/A "A–" (Strong) Negative (1) “A–" is the fourth highest of 16 financial strength ratings assigned by AM Best, as last updated April 1, 2022.
Our insurance and reinsurance opera ting subsidiaries are assigned financial strength ratings as follows: AM Best (1) Fitch (2) S&P (3) Rating Outlook Rating Outlook Rating Outlook SiriusPoint Bermuda "A-" (Excellent) Stable "A–" (Strong) Stable "A–" (Strong) Stable SiriusPoint International "A-" (Excellent) Stable "A–" (Strong) Stable "A–" (Strong) Stable SiriusPoint America "A-" (Excellent) Stable "A–" (Strong) Stable "A–" (Strong) Stable SiriusPoint Specialty Insurance Corporation "A-" (Excellent) Stable N/A N/A "A–" (Strong) Stable (1) “A–" is the fourth highest of 13 financial strength ratings assigned by AM Best, as last updated April 19, 2023.
While we made significant progress in 2022, portfolio review and evaluation is an ongoing process and we will continue to make necessary adjustments by taking action to both grow and shrink lines of business based on our risk appetite, market conditions, and market opportunity. 2.
While we made significant progress in 2023, portfolio review and evaluation is an ongoing process and we will continue to make necessary adjustments by taking action to both grow and reduce lines of business based on our risk appetite, market conditions, and market opportunity. 4 2.
Culture At SiriusPoint, our mission is to be an innovative partner, who creates value and who positively impacts a changing world, by combining data, creative thinking, underwriting skill and discipline, to build a sustainable business for our employees, our customers, our shareholders and the communities in which we operate.
Culture We strive to be an innovative partner, who creates value and positively impacts a changing world, by combining data, creative thinking, underwriting skill and discipline, to build a sustainable business for our employees, our customers, our shareholders and the communities in which we operate.
The GDPR is intended to harmonize data protection procedures and enforcement across the EU and achieve consistency with the system for ensuring privacy online and it is directly applicable to data controllers and data processors in all member states.
The GDPR is intended to harmonize data protection procedures and enforcement across the European Union (the “EU”) and achieve consistency with the system for ensuring privacy online and it is directly applicable to data controllers and data processors in all member states.
As of December 31, 2022, SiriusPoint International's Safety Reserve was SEK 6.0 billion, or $576.9 million (based on the December 31, 2022 SEK to USD exchange rate). Under Swedish GAAP, an amount equal to the Safety Reserve, net of a related deferred tax liability established at the Swedish tax rate, is classified as common shareholders' equity.
As of December 31, 2023, SiriusPoint International's Safety Reserve was SEK 6.0 billion, or $597.2 million (based on the December 31, 2023 SEK to USD exchange rate). Under Swedish GAAP, an amount equal to the Safety Reserve, net of a related deferred tax liability established at the Swedish tax rate, is classified as common shareholders' equity.
Generally, this deferred tax liability ($118.9 million based on the December 31, 2022 SEK to USD exchange rate) is required to be paid by SiriusPoint International if it fails to maintain prescribed levels of premium writings and loss reserves in future years.
Generally, this deferred tax liability ($123.0 million based on the December 31, 2023 SEK to USD exchange rate) is required to be paid by SiriusPoint International if it fails to maintain prescribed levels of premium writings and loss reserves in future years.
We have also enhanced underwriting governance across the portfolio by updating and re-drafting global underwriting guidelines, implementing and revising underwriting authorities and referral thresholds, enhancing policy wording requirements, and establishing targets and thresholds by line of business as we seek to drive business performance and improve discipline.
During 2023, we also enhanced our underwriting governance across the portfolio by updating global underwriting guidelines, revising and implementing underwriting authorities and referral thresholds, enhancing policy wording requirements, and establishing targets and thresholds by line of business as we seek to drive business performance and improve discipline.
Treaty reinsurance is typically written on either a proportional or excess of loss basis. A proportional reinsurance treaty is an arrangement whereby we assume a predetermined proportional share of the premiums and losses generated on specified business. An excess of loss treaty is an arrangement whereby we assume losses that exceed a specific retention of loss by the ceding company.
A proportional reinsurance treaty is an arrangement whereby we assume a predetermined proportional share of the premiums and losses generated on specified business. An excess of loss treaty is an 7 arrangement whereby we assume losses that exceed a specific retention of loss by the ceding company.
Lloyd's approved net capacity for Syndicate 1945 in 2023 is £114.0 million, or approximately $137.7 million (based on the December 31, 2022 GBP to USD exchange rate). Stamp capacity is a measure of the amount of net premium (gross premiums written less acquisition costs) that a syndicate is authorized by Lloyd's to write.
Lloyd's approved net capacity for Syndicate 1945 in 2024 is £144.0 million, or approximately $183.4 million (based on the December 31, 2023 GBP to USD exchange rate). Stamp capacity is a measure of the amount of net premium (gross premiums written less acquisition costs) that a syndicate is authorized by Lloyd's to write.
Where customary or appropriate, our claims specialists perform selective remote or on-site claim reviews, to assess the claim handling abilities, reserve techniques and propriety of controls and processes, for MGAs, TPAs and ceding companies. The results of these claim reviews are shared with the underwriters and actuaries to assist them in pricing products and establishing loss reserves.
Where customary or appropriate and according to our risk-based audit criteria, our claims specialists perform selective remote or on-site claim reviews, to assess the claim handling abilities, reserve techniques and propriety of controls and processes. The results of these claim reviews are shared with the underwriters and actuaries to assist them in pricing products and establishing loss reserves.
We monitor the financial strength and ratings of retrocessionaires on an ongoing basis. Uncollectible amounts historically have not been significant. 12 The following table provides a listing of our loss and loss expenses recoverable, net by the reinsurer’s Standard & Poor’s (“S&P”) rating and the percentage of total recoverables as of December 31, 2022.
We monitor the financial strength and ratings of retrocessionaires on an ongoing basis. Uncollectible amounts historically have not been significant. 13 The following table provides a listing of our loss and loss expenses recoverable, net by the reinsurer’s S&P rating and the percentage of total recoverables as of December 31, 2023.
Further, losses to a number of deterministic scenarios involving both natural and man-made catastrophes are estimated and tracked. 9 The following tables prov ide an estimate of our three largest PML zones on a per occurrence basis for 1-in-100 and 1-in-250 year events as of January 1, 2023 and 2022 as measured by net after-tax exposure.
Further, losses to a number of deterministic scenarios involving both natural and man-made catastrophes are estimated and tracked. 10 The following tables provide an e stimate of our four largest PML zones on a per occurrence basis for 1-in-100 and 1-in-250 year events as of January 1, 2024 and 2023 as measured by net after-tax exposure.
Marketing and Distribution For primary insurance business, we enter into agreements with select MGAs, who then market our insurance products to the general public and have underwriting authority on our behalf. We have well-defined underwriting standards in place for these MGAs that are closely monitored by our staff.
For primary insurance business, we enter into agreements with select MGAs, who then market our insurance products to the general public and have underwriting authority on our behalf. We pay certain MGAs profit commissions based upon the underwriting profit of business produced. We have well-defined underwriting standards in place for these MGAs that are closely monitored by our staff.
These reinsurance protections are designed to increase underwriting capacity where appropriate, and to reduce exposure both to large catastrophe losses and to a frequency of smaller loss events.
These reinsurance protections are designed to reduce exposure both to large catastrophe losses and to a frequency of smaller loss events.
We are committed to cultivating an inclusive environment that supports efforts and initiatives that help us to attract and retain diverse talent around the globe as we achieve more together .
We remain committed to cultivating an inclusive environment that supports efforts and initiatives that help us to attract and retain diverse talent around the globe.
Total capital represents total debt, Series B preference shares, and common shareholders’ equity. Catastrophe modeling is dependent upon several broad scientific, meteorological and economic assumptions.
(2) Total capital and common shareholders’ equity as of December 31, 2023 and 2022. Total capital represents total debt, Series B preference shares, and common shareholders’ equity. Catastrophe modeling is dependent upon several broad scientific, meteorological and economic assumptions.
Competition is influenced by a variety of factors, including prices charged and other terms and conditions offered, financial strength ratings, prior history and relationships, as well as expertise and the speed at which the company has historically paid claims. We compete for business in Bermuda, Europe, the United States and other international markets with numerous global competitors.
Competition is influenced by a variety of factors, including prices charged, coverage and other terms and conditions offered, financial strength ratings, prior history and relationships, as well as expertise and claims handling performance. 14 We compete for insurance and reinsurance business in Bermuda, Europe, the United States, and other international markets with numerous global competitors.
Ultimate Net Loss Event Limit 125 150 Total 1st Excluding U.S. Event Limit 125 150 Total 2nd Excluding U.S. Event Limit 125 150 Retention: U.S. Ultimate Net Loss Retention 90 100 Worldwide Excluding U.S.
Ultimate Net Loss Event Limit — 125.0 Total 1st Excluding U.S. Event Limit — 125.0 Total 2nd Excluding U.S. Event Limit — 125.0 Retention: U.S. Ultimate Net Loss Retention 72.5 90.0 Worldwide Excluding U.S.
With certain reinsurers, if S&P’s rating was not available, an equivalent AM Best rating was used.
With certain reinsurers, if S&P’s rating was not available, an equivalent AM Best or other major credit rating agencies’ rating was used.
We have licenses to write property, casualty and accident & health insurance and reinsurance globally, including admitted & non-admitted licensed companies in the United States, a Bermuda Class 4 company, a Lloyd’s of London (“Lloyd’s”) syndicate and managing agency, and an internationally licensed company domiciled in Sweden.
On January 29, 2024, S&P removed our holding company, SiriusPoint Ltd., from CreditWatch. We have licenses to write property, casualty, and accident & health insurance and reinsurance globally, including admitted & non-admitted licensed companies in the United States, a Bermuda Class 4 company, a Lloyd’s of London (“Lloyd’s”) syndicate and managing agency, and an internationally licensed company domiciled in Sweden.
Prudential regulation and supervision focuses on authorization, ownership and control, resourcing and capital adequacy, risk identification and management, and sound governance. Conduct regulation focuses on the manner in which an insurer or insurance intermediary conducts itself in relation to its interactions with customers. Businesses carrying out insurance activities are primarily regulated and supervised by government authorities within their home jurisdictions.
Conduct regulation focuses on the manner in which an insurer or insurance intermediary conducts itself in relation to its interactions with customers. Businesses carrying out insurance activities are primarily regulated and supervised by government authorities within their home jurisdictions.
We remain liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts. 10 The effects of reinsurance on our written and earned premiu ms and on loss and loss adjustment expenses for the years ende d December 31, 2022, 2021 and 2020 were as follows: 2022 2021 2020 Written premiums: ($ in millions) Direct $ 1,403.9 $ 718.0 $ 19.0 Assumed 2,005.8 1,518.5 569.5 Gross premiums written 3,409.7 2,236.5 588.5 Ceded (860.5) (502.3) (46.3) Net premiums written $ 2,549.2 $ 1,734.2 $ 542.2 Premiums earned: Direct $ 1,153.6 $ 600.8 $ 1.0 Assumed 1,915.2 1,598.5 638.8 Gross premiums earned 3,068.8 2,199.3 639.8 Ceded (750.7) (482.3) (29.0) Net premiums earned $ 2,318.1 $ 1,717.0 $ 610.8 Loss and loss adjustment expenses: Direct $ 778.0 $ 349.3 $ 0.8 Assumed 1,386.8 1,506.1 483.2 Loss and loss adjustment expenses incurred 2,164.8 1,855.4 484.0 Ceded (576.4) (528.9) (18.7) Loss and loss adjustment expenses incurred, net $ 1,588.4 $ 1,326.5 $ 465.3 Reinsurance Segment Our reinsurance protection primarily consists of pro-rata and excess of loss protections that protect all our reportable segments within reinsurance.
We remain liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts. 11 The effects of reinsurance on our written and earned premiu ms and on loss and loss adjustment expenses for the years ende d December 31, 2023, 2022 and 2021 were as follows: 2023 2022 2021 Written premiums: ($ in millions) Direct $ 1,678.7 $ 1,403.9 $ 718.0 Assumed 1,748.7 2,005.8 1,518.5 Gross premiums written 3,427.4 3,409.7 2,236.5 Ceded (989.5) (860.5) (502.3) Net premiums written $ 2,437.9 $ 2,549.2 $ 1,734.2 Premiums earned: Direct $ 1,498.0 $ 1,153.6 $ 600.8 Assumed 1,826.0 1,915.2 1,598.5 Gross premiums earned 3,324.0 3,068.8 2,199.3 Ceded (897.8) (750.7) (482.3) Net premiums earned $ 2,426.2 $ 2,318.1 $ 1,717.0 Loss and loss adjustment expenses: Direct $ 1,008.6 $ 778.0 $ 349.3 Assumed 910.5 1,386.8 1,506.1 Loss and loss adjustment expenses incurred 1,919.1 2,164.8 1,855.4 Ceded (537.8) (576.4) (528.9) Loss and loss adjustment expenses incurred, net $ 1,381.3 $ 1,588.4 $ 1,326.5 Our reinsurance protections primarily consist of pro-rata and excess of loss protections that protect our reportable segments within Reinsurance and Insurance & Services.
SiriusPoint's U.K.-based authorized insurance subsidiaries are as follows: • Sirius International Managing Agency Limited, a Lloyd's managing agent that is dual-regulated by the PRA and FCA and supervised by Lloyd's; and • A La Carte Healthcare Limited and IMG Europe Limited, both insurance intermediaries regulated by the FCA.
SiriusPoint's U.K.-based authorized insurance subsidiaries are as follows: • Sirius International Managing Agency Limited, a Lloyd's managing agent that is dual-regulated by the PRA and FCA and supervised by Lloyd's; and • International Medical Group Limited, an insurance intermediary regulated by the FCA.
The Terrorism Risk Insurance Act provides a federal backstop to all U.S.-based property and casualty insurers for insurance-related losses resulting from any act of terrorism on U.S. soil or against certain U.S. air carriers, vessels or foreign mission. The federal government also has issued certain orders and regulations that require SiriusPoint’s U.S.-based (re)insurance subsidiaries to establish certain internal controls.
The Terrorism Risk Insurance Act provides a federal backstop to all U.S.-based property and casualty insurers for insurance-related losses resulting from any act of terrorism on U.S. soil or against certain U.S. air carriers, vessels or foreign mission.
Control may also be deemed to exist upon the possession of the power to direct or cause the direction of the management and policies of any person, whether through ownership of voting securities, by contract or otherwise. 21 To obtain approval of any acquisition of control, the proposed acquirer must file with the applicable insurance regulator an application disclosing, among other information, its background, financial condition, the financial condition of its affiliates, the source and amount of funds by which it will affect the acquisition, the criteria used in determining the nature and amount of consideration to be paid for the acquisition, proposed changes in the management and operations of the insurance company and other related matters.
To obtain approval of any acquisition of control, the proposed acquirer must file with the applicable insurance regulator an application disclosing, among other information, its background, financial condition, the financial condition of its affiliates, the source and amount of funds by which it will affect the acquisition, the criteria used in determining the nature and amount of consideration to be paid for the acquisition, proposed changes in the management and operations of the insurance company and other related matters.
January 1, 2023 January 1, 2022 Limit: ($ in millions) U.S. Ultimate Net Loss Limit based on SiriusPoint Loss $ 100 $ 100 U.S. Hurricane State Weighted Industry Loss Index Limit (1) 100 — Total 1st U.S. Event Limit 200 100 Total 2nd U.S. Event Limit 100 100 Excluding U.S.
January 1, 2024 January 1, 2023 Limit: ($ in millions) U.S. Ultimate Net Loss Limit based on SiriusPoint Loss $ 127.5 $ 100.0 U.S. State Weighted Industry Loss Limit (Indexed Protection based on Industry Loss) — 100.0 Total 1st U.S. Event Limit 127.5 200.0 Total 2nd U.S. Event Limit 92.5 100.0 Excluding U.S.
Safety Reserve Subject to certain limitations under Swedish law, SiriusPoint International is permitted to transfer pre-tax income amounts into a reserve referred to as a "Safety Reserve." Under local statutory requirements, an amount equal to the deferred tax liability on SiriusPoint International's Safety Reserve is included in Solvency Capital.
In addition to what is required under the Solvency II Regulation, Swedish insurance companies must conduct the business in accordance with "generally accepted insurance practices". 25 Safety Reserve Subject to certain limitations under Swedish law, SiriusPoint International is permitted to transfer pre-tax income amounts into a reserve referred to as a "Safety Reserve." Under local statutory requirements, an amount equal to the deferred tax liability on SiriusPoint International's Safety Reserve is included in Solvency Capital.
Available Information SiriusPoint files annual, quarterly and current reports and other information with the Securities and Exchange Commission (the “SEC”). The SEC maintains an Internet website ( www.sec.gov ) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including us.
The SEC maintains an Internet website ( www.sec.gov ) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC, including us.
(2) Not rated represents reinsurers who are not rated by either S&P or AM Best. Included in the not rated category is $327.7 million related to Pallas Reinsurance Company Ltd. as a result of the 2021 LPT, and the amount is fully collateralized.
(2) Not rated represents reinsurers who are not rated by S&P, AM Best, or another major credit rating agency. Included in the not rated category is $1,090.2 million related to Pallas Reinsurance Company Ltd. as a result of the 2023 LPT and 2021 LPT.
Most significant of these regulations is the U.S. Treasury Department Office of Foreign Asset Control ("OFAC"). OFAC proscribes transactions with specially designated nationals ("SDNs") and blocked countries due to ties with matters such as terrorism, drugs and money laundering. Insurance and reinsurance transactions with SDNs and blocked countries are prohibited and violation can result in significant fines.
OFAC proscribes transactions with specially designated nationals ("SDNs") and blocked countries due to ties with matters such as terrorism, drugs and money laundering. Insurance and reinsurance transactions with SDNs and blocked countries are prohibited and violation can result in significant fines.
The statutory financial return includes, among other matters, the statutory financial statements, auditors report on the statutory financial statements of the insurer, own risk statement, and statutory declaration. In addition, each Class 3A and Class 4 insurer is also required to file, on annual basis with the BMA, a capital and solvency return along with their annual financial statutory returns.
In addition, each Class 3A and Class 4 insurer is also required to file, on an annual basis with the BMA, a capital and solvency return along with their annual financial statutory returns.
PRA and FCA regulation The primary statutory objectives of the PRA in relation to its supervision of insurers are (i) to promote their safety and soundness; and (ii) to contribute to the securing of an appropriate degree of protection for policyholders or those who may become policyholders.
SiriusPoint International Insurance Corporation (publ) is also supporting Syndicate 1945 through Sirius International Corporate Member, a corporate member of Lloyd's. 26 PRA and FCA regulation The primary statutory objectives of the PRA in relation to its supervision of insurers are (i) to promote their safety and soundness; and (ii) to contribute to the securing of an appropriate degree of protection for policyholders or those who may become policyholders.
We encourage you to review our most recent Environmental, Social and Governance Report (located on our website at www.siriuspt.com ) for more detailed information regarding our Human Capital programs and initiatives. Nothing on our website, including our Environment, Social and Governance Report or sections thereof, shall be deemed incorporated by reference into this Annual Report.
We encourage you to review our most recent Environmental, Social and Governance Report (located on our website at www.siriuspt.com ) for more detailed information regarding our Human Capital programs and initiatives.
GAAP or other acceptable accounting standards as part of their annual filings, which the BMA will subsequently publish on its website. 15 Annual Statutory Financial Return and Annual Capital and Solvency Return Each Class 3A and Class 4 insurer is required to file with the BMA annual statutory financial returns no later than four months after its financial year end (unless specifically extended upon application to the BMA).
Annual Statutory Financial Return and Annual Capital and Solvency Return Each Class 3A and Class 4 insurer is required to file with the BMA annual statutory financial returns no later than four months after its financial year end (unless specifically extended upon application to the BMA).
Our investment objective is to maximize long-term after-tax total return while (1) limiting the investment risk within prudent risk tolerance thresholds, (2) maintaining adequate liquidity, and (3) complying with the regulatory, rating agency, and internal risk and capital management requirements, all in support of the company goal of meeting policyholder obligations.
Our investment objective is to optimize risk-adjusted after-tax net investment income while (1) maintaining a high quality, diversified investment portfolio, (2) maintaining adequate liquidity, and (3) complying with the regulatory, rating agency, and internal risk and capital management requirements, all in support of the company goal of meeting policyholder obligations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

144 edited+35 added−25 removed314 unchanged
Biggest changeMoreover, we believe that numerous modeled potential catastrophes could exceed the actual or politically acceptable bonded capacity of Citizens Property Insurance Corporation (“Citizens”) and of the Florida Hurricane Catastrophe Fund (“FHCF”). This could lead to a severe dislocation or the necessity of federal intervention in the Florida market, either of which would adversely impact the private insurance and reinsurance industry.
Biggest changeIf enacted, bills of this nature would likely further erode the role of private market catastrophe reinsurers and could adversely impact our financial results, perhaps materially. Moreover, we believe that numerous modeled potential catastrophes could exceed the actual or politically acceptable bonded capacity of Citizens Property Insurance Corporation (“Citizens”) and of the Florida Hurricane Catastrophe Fund (“FHCF”).
Upon the earlier of the termination of the IMA or end of the initial term, the final incentive fee payable to Third Point will be determined as percentage between 15% and 30% (depending on the cumulative outperformance of the TPOC Portfolio over the term of the IMA) to ensure that the total amount of the incentive fee actually paid reflects the incentive fee payable based on the cumulative outperformance of the TPOC Portfolio during the investment period.
Upon the earlier of the termination of the IMA or end of the initial term, the final incentive fee payable to Third Point will be determined as percentage between 15% and 30% (depending on the cumulative outperformance of TPOC over the term of the IMA) to ensure that the total amount of the incentive fee actually paid reflects the incentive fee payable based on the cumulative outperformance of the TPOC Portfolio during the investment period.
Therefore, the Company has greater control over valuation of assets in the TPOC Portfolio than the TP Enhanced Fund. The SiriusPoint investment portfolio may suffer reduced returns or losses, which could adversely affect our results of operations and financial condition.
Therefore, the Company has greater control over valuation of assets in the TPOC Portfolio than TP Enhanced Fund. The SiriusPoint investment portfolio may suffer reduced returns or losses, which could adversely affect our results of operations and financial condition.
Among the factors that could affect our share price are: • industry or general market conditions; • domestic and international economic factors unrelated to our performance; • changes in our clients’ needs; • new regulatory pronouncements and changes in regulatory guidelines; • lawsuits, enforcement actions and other claims by third parties or governmental authorities; • actual or anticipated fluctuations in our quarterly operating results; • changes in securities analysts' estimates of our financial performance or lack of research and reports by industry analysts; • action by institutional shareholders or other large shareholders, including future sales; • speculation in the press or investment community; • investor perception of us and our industry; • changes in market valuations or earnings of similar companies; • any announcement by us or our competitors of a significant contract, acquisition, strategic transaction or expansion into a new line of business; • our ability to execute on our strategic transformation; • any future sales of our common shares or other securities; and • additions or departures of key personnel.
Among the factors that could affect our share price are: • industry or general market conditions; • domestic and international economic factors unrelated to our performance; • changes in our clients’ needs; • new regulatory pronouncements and changes in regulatory guidelines; • lawsuits, enforcement actions and other claims by third parties or governmental authorities; • actual or anticipated fluctuations in our quarterly operating results; • changes in securities analysts' estimates of our financial performance or lack of research and reports by industry analysts; 60 • action by institutional shareholders or other large shareholders, including future sales; • speculation in the press or investment community; • investor perception of us and our industry; • changes in market valuations or earnings of similar companies; • any announcement by us or our competitors of a significant contract, acquisition, strategic transaction or expansion into a new line of business; • our ability to execute on our strategic transformation; • any future sales of our common shares or other securities; and • additions or departures of key personnel.
In addition, legislative, regulatory, judicial or social influences have imposed and may continue to impose new obligations on insurers in connection with the pandemic that extend coverage beyond the intended contractual obligations or lead to an increase in the frequency or severity of claims beyond expected levels, resulting in the emergence of unexpected or un-modeled insurance or reinsurance losses. • An economic recession or slowdown in economic activity resulting from the pandemic will not only increase the probability of losses, but could also reduce the demand for insurance and reinsurance, which could reduce our premium volume. • Ongoing disruption in global financial markets and economic uncertainty due to the continuing impact of COVID-19 has caused and could continue to cause us to incur investment losses, including credit impairments in our fixed maturity portfolio, or decline in interest rates which may reduce our future net investment income.
In addition, legislative, regulatory, judicial or social influences have imposed and may continue to impose new obligations on insurers in connection with the pandemic that extend coverage beyond the intended contractual obligations or lead to an increase in the frequency or severity of claims beyond expected levels, resulting in the emergence of unexpected or un-modeled insurance or reinsurance losses. • An economic recession or slowdown in economic activity resulting from the pandemic will not only increase the probability of losses, but could also reduce the demand for insurance and reinsurance, which could reduce our premium volume. • Disruption in global financial markets and economic uncertainty due to the continuing impact of COVID-19 has caused and could continue to cause us to incur investment losses, including credit impairments in our fixed maturity portfolio, or decline in interest rates which may reduce our future net investment income.
For example, our bye-laws: • establish a classified Board of Directors; • require advance notice of shareholders’ proposals in connection with annual general meetings; • authorize our board to issue “blank check” preferred shares; • prohibit us from engaging in a business combination with a person who acquires at least 15% of our common shares for a period of three years from the date such person acquired such common shares unless board and shareholder approval is obtained prior to the acquisition; • require that directors only be removed from office for cause by majority shareholder vote; 58 • require a supermajority vote of shareholders to effect certain amendments to our memorandum of association and bye-laws; and • provide a consent right on the part of Daniel S.
For example, our bye-laws: • establish a classified Board of Directors; • require advance notice of shareholders’ proposals in connection with annual general meetings; • authorize our board to issue “blank check” preferred shares; • prohibit us from engaging in a business combination with a person who acquires at least 15% of our common shares for a period of three years from the date such person acquired such common shares unless board and shareholder approval is obtained prior to the acquisition; • require that directors only be removed from office for cause by majority shareholder vote; • require a supermajority vote of shareholders to effect certain amendments to our memorandum of association and bye-laws; and • provide a consent right on the part of Daniel S.
Examples of emerging claims and coverage issues include, but are not limited to: • new theories of liability and disputes regarding medical causation with respect to certain diseases; • assignment-of-benefits agreements, where rights of insurance claims and benefits of the insurance policy are transferred to third parties, and which can result in inflated repair costs and legal expenses to insurers and reinsurers; and 38 • claims related to data security breaches, information system failures or cyber-attacks.
Examples of emerging claims and coverage issues include, but are not limited to: • new theories of liability and disputes regarding medical causation with respect to certain diseases; • assignment-of-benefits agreements, where rights of insurance claims and benefits of the insurance policy are transferred to third parties, and which can result in inflated repair costs and legal expenses to insurers and reinsurers; and • claims related to data security breaches, information system failures or cyber-attacks.
A CFC for U.S. federal income tax purposes is any foreign corporation if, on any day of the taxable year, 10% U.S. shareholders own (directly, indirectly through foreign entities or by attribution by application of certain constructive ownership rules) more than 50% (25% in the case of certain insurance companies) of the total combined voting power of all classes of that corporation's voting shares, or more than 50% (25% in the case of certain insurance companies) of the total value of all the corporation's shares.
A CFC for U.S. federal income tax purposes is any foreign corporation if, on any day of the taxable year, 10% U.S. shareholders own (directly, indirectly through foreign entities or by attribution by application of certain constructive ownership rules) more than 50% (25% in the case of certain insurance companies) of the total combined voting power of all 55 classes of that corporation's voting shares, or more than 50% (25% in the case of certain insurance companies) of the total value of all the corporation's shares.
As such, we have been advised that there is doubt as to whether: 56 • a holder of our shares would be able to enforce, in the courts of Bermuda, judgments of United States courts against persons who reside in Bermuda based upon the civil liability provisions of the United States federal securities laws; • a holder of our shares would be able to enforce, in the courts of Bermuda, judgments of United States courts based upon the civil liability provisions of the United States federal securities laws; • a holder of our shares would be able to bring an original action in the Bermuda courts to enforce liabilities against us or our directors and officers who reside outside the United States based solely upon United States federal securities laws.
As such, we have been advised that there is doubt as to whether: • a holder of our shares would be able to enforce, in the courts of Bermuda, judgments of United States courts against persons who reside in Bermuda based upon the civil liability provisions of the United States federal securities laws; • a holder of our shares would be able to enforce, in the courts of Bermuda, judgments of United States courts based upon the civil liability provisions of the United States federal securities laws; • a holder of our shares would be able to bring an original action in the Bermuda courts to enforce liabilities against us or our directors and officers who reside outside the United States based solely upon United States federal securities laws.
In comparison, under Delaware law such transaction would not be voidable if: • the material facts as to such interested director’s relationship or interests were disclosed or were known to the Board of Directors and the Board of Directors had in good faith authorized the transaction by the affirmative vote of a majority of the disinterested directors; • such material facts were disclosed or were known to the shareholders entitled to vote on such transaction and the transaction were specifically approved in good faith by vote of the majority of shares entitled to vote thereon; or • the transaction were fair as to the corporation as of the time it was authorized, approved or ratified.
In comparison, under Delaware law such transaction would not be voidable if: • the material facts as to such interested director’s relationship or interests were disclosed or were known to the Board of Directors and the Board of Directors had in good faith authorized the transaction by the affirmative vote of a majority of the disinterested directors; 58 • such material facts were disclosed or were known to the shareholders entitled to vote on such transaction and the transaction were specifically approved in good faith by vote of the majority of shares entitled to vote thereon; or • the transaction were fair as to the corporation as of the time it was authorized, approved or ratified.
The inherent uncertainties of estimating loss reserves generally are greater for reinsurance and MGA produced insurance businesses as compared to traditional primary insurance, primarily due to: • the lapse of time from the occurrence of an event to the reporting of the claim and the ultimate resolution or settlement of the claim; • the diversity of development patterns among different types of (re)insurance contracts; and • heavier reliance on the client/MGA partner for information regarding claims.
The inherent uncertainties of estimating loss reserves generally are greater for reinsurance and MGA produced insurance businesses as compared to traditional primary insurance, primarily due to: • the lapse of time from the occurrence of an event to the reporting of the claim and the ultimate resolution or settlement of the claim; • the diversity of development patterns among different types of insurance and reinsurance contracts; and • heavier reliance on the client/MGA partner for information regarding claims.
The (re)insurance industry, including our competitors, customers and insurance and reinsurance brokers, has experienced significant consolidation over the last several years. These consolidated client and competitor enterprises may try to use their enhanced market power to negotiate price reductions for our products and services and/or obtain a larger market share through increased line sizes.
The insurance and reinsurance industry, including our competitors, customers and insurance and reinsurance brokers, has experienced significant consolidation over the last several years. These consolidated client and competitor enterprises may try to use their enhanced market power to negotiate price reductions for our products and services and/or obtain a larger market share through increased line sizes.
The availability of the latter exemption depends on the total amounts of base erosion payments and U.S. tax deductions for the current tax year, which is not yet known. Currently, legislative proposals include specific provisions that would amend the BEAT provisions. One of these proposed amendments, if enacted, would eliminate one or more exemptions of limitations.
The availability of the latter exemption depends on the total amounts of base erosion payments and U.S. tax deductions for the current tax year, which is not yet known. Currently, legislative proposals include specific provisions that would amend the BEAT provisions. 54 One of these proposed amendments, if enacted, would eliminate one or more exemptions of limitations.
To the extent that we are unable to locate an adequate replacement or are unable to do so within a reasonable period of time, our business may be significantly and negatively affected. Our inability to provide collateral to certain counterparties on commercially acceptable terms as we grow could significantly and negatively affect our ability to implement our business strategy.
To the extent that we are unable to locate an adequate replacement or are unable to do so within a reasonable period of time, our business may be significantly and negatively affected. 42 Our inability to provide collateral to certain counterparties on commercially acceptable terms as we grow could significantly and negatively affect our ability to implement our business strategy.
Under the Insurance Act of 1978, as amended, and related regulations of Bermuda (the “Insurance Act”), SiriusPoint Bermuda, as a Class 4 insurer, is prohibited from declaring or 41 paying a dividend if the relevant insurer is in breach of its minimum solvency margin (“MSM”), enhanced capital ratio or minimum liquidity ratio or if the declaration or payment of such dividend would cause such a breach.
Under the Insurance Act of 1978, as amended, and related regulations of Bermuda (the “Insurance Act”), SiriusPoint Bermuda, as a Class 4 insurer, is prohibited from declaring or paying a dividend if the relevant insurer is in breach of its minimum solvency margin (“MSM”), enhanced capital ratio or minimum liquidity ratio or if the declaration or payment of such dividend would cause such a breach.
In such a case, the BMA may require the shareholder to reduce its holding of our common shares and direct, among other things, that such shareholder’s voting rights attaching to the common shares shall not be exercisable. A person who does not comply with such a notice or direction from the BMA will be 51 guilty of an offense.
In such a case, the BMA may require the shareholder to reduce its holding of our common shares and direct, among other things, that such shareholder’s voting rights attaching to the common shares shall not be exercisable. A person who does not comply with such a notice or direction from the BMA will be guilty of an offense.
Terrorist acts may also cause multiple claims, and our attempts to limit our liability through contractual policy provisions may not be effective. Global climate change may have a material adverse effect on our business, operating results and financial condition. We have material exposures arising from our coverages for natural disasters and catastrophes.
Terrorist acts may also cause multiple claims, and our attempts to limit our liability through contractual policy provisions may not be effective. 38 Global climate change may have a material adverse effect on our business, operating results and financial condition. We have material exposures arising from our coverages for natural disasters and catastrophes.
The amount of any reduction of votes that occurs by operation of the above limitations will generally be reallocated proportionately among our other shareholders whose shares were not “controlled shares” of the 9.5% U.S. shareholder so long as such reallocation does not cause any person to become a 9.5% U.S. shareholder.
The amount of any reduction of votes that occurs by operation of the above limitations will generally be reallocated proportionately among our other shareholders 59 whose shares were not “controlled shares” of the 9.5% U.S. shareholder so long as such reallocation does not cause any person to become a 9.5% U.S. shareholder.
Failure to attract and retain key senior management may negatively 40 impact our credit ratings and impact our client, MGA and other third-party relationships, which may adversely impact our financial and operational goals and strategic plans, as well as our financial performance. We are dependent on key executives, the loss of whom could adversely affect our business.
Failure to attract and retain key senior management may negatively impact our credit ratings and impact our client, MGA and other third-party relationships, which may adversely impact our financial and operational goals and strategic plans, as well as our financial performance. We are dependent on key executives, the loss of whom could adversely affect our business.
As a result of the concentration of ownership, CM Bermuda, the Loeb Entities and BlackRock, Inc. could exercise influence over matters requiring shareholder approval, including approval of significant corporate transactions, which may reduce the market price of our common shares. The interests of the shareholders specified above may conflict with the interests of our other shareholders.
As a result of the concentration of ownership, CM Bermuda, the Loeb Entities and BlackRock, Inc. could 57 exercise influence over matters requiring shareholder approval, including approval of significant corporate transactions, which may reduce the market price of our common shares. The interests of the shareholders specified above may conflict with the interests of our other shareholders.
The Companies Act, which applies to us as a Bermuda company, differs in certain material respects from laws generally applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain significant provisions of the Companies Act and our bye-laws which differ in certain respects from provisions of Delaware corporate law.
The Companies Act, which applies to us as a Bermuda exempted company, differs in certain material respects from laws generally applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain significant provisions of the Companies Act and our bye-laws which differ in certain respects from provisions of Delaware corporate law.
A downgrade, withdrawal or similar 39 action concerning our credit ratings could limit our ability to raise new debt or could make new debt more costly and/or result in more restrictive conditions. We are the obligor of $115.0 million in aggregate principal amount of 2015 Senior Notes.
A downgrade, withdrawal or similar action concerning our credit ratings could limit our ability to raise new debt or could make new debt more costly and/or result in more restrictive conditions. We are the obligor of $115.0 million in aggregate principal amount of 2015 Senior Notes.
In addition, the (re) insurance business written by some of the MGAs we partner with is inherently uncertain because these MGAs are typically early-stage ventures which may lack historical data, are growing rapidly and may represent new products, markets or technologies.
In addition, 47 the insurance and re-insurance business written by some of the MGAs we partner with is inherently uncertain because these MGAs are typically early-stage ventures which may lack historical data, are growing rapidly and may represent new products, markets or technologies.
SiriusPoint, its employees, or its agents acting on SiriusPoint's behalf may not be in full compliance with all applicable laws and regulations or their interpretation by the relevant authorities and, given the complex nature of the risks, it may not always be possible for SiriusPoint to ascertain compliance with such laws and regulations. 49 Failure to comply with or to obtain appropriate authorizations and/or exemptions under any applicable laws or regulations, including those referred to above, could subject SiriusPoint to investigations, criminal sanctions or civil remedies, including fines, injunctions, loss of an operating license, reputational consequences, and other sanctions, all of which could have a material adverse effect on SiriusPoint's business.
SiriusPoint, its employees, or its agents acting on SiriusPoint's behalf may not be in full compliance with all applicable laws and regulations or their interpretation by the relevant authorities and, given the complex nature of the risks, it may not always be possible for SiriusPoint to ascertain compliance with such laws and regulations. 51 Failure to comply with or to obtain appropriate authorizations and/or exemptions under any applicable laws or regulations, including those referred to above, could subject SiriusPoint to investigations, criminal sanctions or civil remedies, including fines, injunctions, loss of an operating license, reputational consequences, and other sanctions, all of which could have a material adverse effect on SiriusPoint's business.
As a result, we could be held responsible for violations of global data privacy laws, such as the General Data Protection Regulation, for our failure, or the failure on the part of our third party vendors or agents, to securely 32 process, store or transmit such personal information.
As a result, we could be held responsible for violations of global data privacy laws, such as the General Data Protection Regulation, for our failure, or the failure on the part of our third party vendors or agents, to securely process, store or transmit such personal information.
For more information about the risks resulting from the inherent uncertainty of modeling techniques, see “Risks Relating to Our 34 Business—Our claims and claim expense reserves are subject to inherent uncertainties, which could cause our losses to exceed our loss reserves.” Our claims and claim expense reserves are subject to inherent uncertainties, which could cause our losses to exceed our loss reserves.
For more information about the risks resulting from the inherent uncertainty of modeling techniques, see “Risks Relating to Our Business—Our claims and claim expense reserves are subject to inherent uncertainties, which could cause our losses to exceed our loss reserves.” Our claims and claim expense reserves are subject to inherent uncertainties, which could cause our losses to exceed our loss reserves.
Remote work arrangements affect our business continuity plans, introduce operational risk, including cybersecurity risks, and may adversely affect our ability to manage our business. 36 The impact of the COVID-19 pandemic could also exacerbate the other risks we face described herein.
Remote work arrangements affect our business continuity plans, introduce operational risk, including cybersecurity risks, and may adversely affect our ability to manage our business. The impact of the COVID-19 pandemic could also exacerbate the other risks we face described herein.
However, given the inherent uncertainty of modeling techniques and the application of such techniques, these models and databases may not accurately address a variety of matters impacting our coverages. The construction of these models and the selection of assumptions requires significant actuarial judgement.
However, given the inherent uncertainty of modeling techniques and the application of such 35 techniques, these models and databases may not accurately address a variety of matters impacting our coverages. The construction of these models and the selection of assumptions requires significant actuarial judgement.
If at any time it were established that we had been operating as an investment company in violation of the Investment Company Act, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, that we could be unable to enforce contracts with third parties or that third parties could seek to obtain rescission of transactions undertaken during the period in which it was established that we were an 50 unregistered investment company.
If at any time it were established that we had been operating as an investment company in violation of the Investment Company Act, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, that we could be unable to enforce contracts with third parties or that third parties could seek to obtain rescission of transactions undertaken during the period in which it was established that we were an 52 unregistered investment company.
Competition in the types of business that we underwrite is based on many factors, including: • price of (re)insurance coverage; • the general reputation and perceived financial strength of the reinsurer; • ratings assigned by independent rating agencies; • relationships with (re)insurance brokers; • terms and conditions of products offered; • speed of claims payment; and • the experience and reputation of the members of our underwriting team in the particular lines of (re)insurance we seek to underwrite.
Competition in the types of business that we underwrite is based on many factors, including: • price of insurance and reinsurance coverage; • the general reputation and perceived financial strength of the reinsurer; • ratings assigned by independent rating agencies; • relationships with insurance and reinsurance brokers; • terms and conditions of products offered; • speed of claims payment; and • the experience and reputation of the members of our underwriting team in the particular lines of insurance and reinsurance we seek to underwrite.
Some forms of (re)insurance provide coverage for aggregated loss result over a period of time making it inherently difficult to track how these coverages will be impacted by any single or series of events. Accordingly, these models may understate the exposures we are assuming and our financial results may be adversely affected, perhaps significantly.
Some forms of insurance and reinsurance provide coverage for aggregated loss result over a period of time making it inherently difficult to track how these coverages will be impacted by any single or series of events. Accordingly, these models may understate the exposures we are assuming and our financial results may be adversely affected, perhaps significantly.
See “ Risks Relating to Our Business—Inability to service our indebtedness could adversely affect our liquidity and financial condition and could potentially result in a downgrade or withdrawal of our credit ratings, any of which could adversely affect our financial condition and results of operations .” Rating agencies periodically evaluate us and our operating (re)insurance companies to confirm that we continue to meet the criteria of the ratings previously assigned to us.
See “ Risks Relating to Our Business—Inability to service our indebtedness could adversely affect our liquidity and financial condition and could potentially result in a downgrade or withdrawal of our credit ratings, any of which could adversely affect our financial condition and results of operations .” Rating agencies periodically evaluate us and our operating insurance and reinsurance companies to confirm that we continue to meet the criteria of the ratings previously assigned to us.
Accordingly, if our pricing and/or reserving assumptions are incorrect, higher than expected losses could materially adversely affect our financial condition, liquidity or results of operations. The property and casualty (re)insurance industry is highly cyclical, and we expect to continue to experience periods characterized by excess underwriting capacity and unfavorable premium rates.
Accordingly, if our pricing and/or reserving assumptions are incorrect, higher than expected losses could materially adversely affect our financial condition, liquidity or results of operations. The property and casualty insurance and reinsurance industry is highly cyclical, and we expect to continue to experience periods characterized by excess underwriting capacity and unfavorable premium rates.
Furthermore, it is possible that these non-claims legal proceedings could result in unexpected outcomes that may materially impact our business or operations. Recent or future U.S. federal or state legislation may impact the private markets and decrease the demand for our property (re)insurance products, which would adversely affect our business and results of operations.
Furthermore, it is possible that these non-claims legal proceedings could result in unexpected outcomes that may materially impact our business or operations. Recent or future U.S. federal or state legislation may impact the private markets and decrease the demand for our property insurance and reinsurance products, which would adversely affect our business and results of operations.
Efforts to pursue certain investment opportunities may be unsuccessful or require significant financial or other resources, which could have a negative impact on our operating results and financial condition. We face risks associated with delegating authority to third party managing general agents (“MGAs”) to secure (re)insurance policies on our behalf.
Efforts to pursue certain investment opportunities may be unsuccessful or require significant financial or other resources, which could have a negative impact on our operating results and financial condition. We face risks associated with delegating authority to third party managing general agents (“MGAs”) to secure insurance and reinsurance policies on our behalf.
Failure to oversee and manage these MGAs could result in a concentration of risk in certain overlapping areas and/or result in significant losses which could have an adverse effect on our business, financial condition, and operating results. We have and may continue to enter into arrangements with MGAs to secure (re)insurance policies on our behalf.
Failure to oversee and manage these MGAs could result in a concentration of risk in certain overlapping areas and/or result in significant losses which could have an adverse effect on our business, financial condition, and operating results. We have and may continue to enter into arrangements with MGAs to secure insurance and reinsurance policies on our behalf.
We may need to raise additional capital in the future through offerings of debt or equity securities or otherwise to: • fund liquidity needs caused by underwriting or investment losses or for acquisitions or other strategic initiatives; • replace capital lost in the event of significant (re)insurance losses or adverse reserve development; • satisfy letters of credit, guarantee bond requirements or other capital requirements that may be imposed by our clients or by regulators; • fund our informational technology transformation projects and other strategic initiatives; 43 • meet rating agency or regulatory capital requirements; or • respond to competitive pressures.
We may need to raise additional capital in the future through offerings of debt or equity securities or otherwise to: • fund liquidity needs caused by underwriting or investment losses or for acquisitions or other strategic initiatives; • replace capital lost in the event of significant insurance and reinsurance losses or adverse reserve development; • satisfy letters of credit, guarantee bond requirements or other capital requirements that may be imposed by our clients or by regulators; • fund our informational technology transformation projects and other strategic initiatives; • meet rating agency or regulatory capital requirements; or • respond to competitive pressures.
Both SiriusPoint’s investment income and the fair market value of its investment portfolio are affected by general economic and market conditions, including fluctuations in interest rates, foreign currency exchange rates, debt market levels, equity 47 market levels and market volatility. Our investment performance may also be affected by idiosyncratic factors for concentrated strategic and financial investment positions.
Both SiriusPoint’s investment income and the fair market value of its investment portfolio are affected by general economic and market conditions, including fluctuations in interest rates, foreign currency exchange rates, debt market levels, equity 49 market levels and market volatility. Our investment performance may also be affected by idiosyncratic factors for concentrated strategic and financial investment positions.
Accordingly, our short-term results of operations may not be indicative of our long-term prospects as we continue to de-risk our underwriting portfolio. We may continue to be adversely impacted by inflation. In 2022, economies around the world experienced heightened levels of inflation, which caused central banks to respond by raising interest rates.
Accordingly, our short-term results of operations may not be indicative of our long-term prospects as we continue to de-risk our underwriting portfolio. We may continue to be adversely impacted by inflation. In 2023, economies around the world experienced heightened levels of inflation, which caused central banks to respond by raising interest rates.
We cannot assure you that we will be able to compete successfully in the (re)insurance market. Our failure to compete effectively would significantly and negatively affect our financial condition and results of operations and may increase the likelihood that we are deemed to be a passive foreign investment company or an investment company.
We cannot assure you that we will be able to compete successfully in the insurance and reinsurance market. Our failure to compete effectively would significantly and negatively affect our financial condition and results of operations and may increase the likelihood that we are deemed to be a passive foreign investment company or an investment company.
Historically, (re)insurers have experienced significant fluctuations in operating results due to competition, frequency of occurrence or severity of catastrophic events, levels of capacity, general economic conditions, including inflation, changes in equity, debt and other investment markets, changes in legislation, case law and prevailing concepts of liability and other factors.
Historically, insurers and reinsurers have experienced significant fluctuations in operating results due to competition, frequency of occurrence or severity of catastrophic events, levels of capacity, general economic conditions, including inflation, changes in equity, debt and other investment markets, changes in legislation, case law and prevailing concepts of liability and other factors.
SiriusPoint’s investment portfolio is overseen in accordance with the investment policy and guidelines approved by the Investment Committee of the SiriusPoint board of directors. As of December 31, 2022, SiriusPoint’s investment portfolio consisted of fixed maturity investments, short-term investments, equity securities, other long-term investments, including hedge funds, private equity funds, and direct private equity investments, and Related Party Investment Funds.
SiriusPoint’s investment portfolio is overseen in accordance with the investment policy and guidelines approved by the Investment Committee of the SiriusPoint board of directors. As of December 31, 2023, SiriusPoint’s investment portfolio consisted of fixed maturity investments, short-term investments, equity securities, other long-term investments, including hedge funds, private equity funds, and direct private equity investments, and Related Party Investment Funds.
The revenues, income (or losses), and projected financial performance and valuations of venture growth stage companies can and often do fluctuate suddenly and dramatically. Our target venture growth stage companies may be geographically concentrated and are therefore 48 highly susceptible to materially negative local, political, natural and economic events.
The revenues, income (or losses), and projected financial performance and valuations of venture growth stage companies can and often do fluctuate suddenly and dramatically. Our target venture growth stage companies may be geographically concentrated and are therefore 50 highly susceptible to materially negative local, political, natural and economic events.
We compete with major (re)insurers, which vary according to the individual market and situation, many of which have substantially greater financial, marketing and management resources than we do, as well as other potential providers of capital willing to assume insurance or reinsurance risk.
We compete with major insurers and reinsurers, which vary according to the individual market and situation, many of which have substantially greater financial, marketing and management resources than we do, as well as other potential providers of capital willing to assume insurance or reinsurance risk.
As a result, the (re)insurance business historically has been a cyclical industry characterized by periods of intense price competition due to high levels of available underwriting capacity as well as periods when shortages of capacity have permitted favorable premium levels and changes in terms and conditions.
As a result, the insurance and reinsurance business historically has been a cyclical industry characterized by periods of intense price competition due to high levels of available underwriting capacity as well as periods when shortages of capacity have permitted favorable premium levels and changes in terms and conditions.
Our ability to pay dividends may be constrained by our holding company structure and certain regulatory and other factors. SiriusPoint is a holding company that conducts no reinsurance operations of its own. The majority of our reinsurance operations are conducted through our wholly-owned operating subsidiaries.
Our ability to pay dividends may be constrained by our holding company structure and certain regulatory and other factors. SiriusPoint is a holding company that conducts no insurance or reinsurance operations of its own. The majority of our insurance and reinsurance operations are conducted through our wholly-owned operating subsidiaries.
Loeb’s service to both companies may create, or may create the appearance of, conflicts of interest. 46 TP GP, Third Point LLC and their respective affiliates may engage in other business ventures and investment opportunities that may not be allocated equitably among us and such other business ventures.
Loeb’s service to both companies may create, or may create the appearance of, conflicts of interest. 48 TP GP, Third Point LLC and their respective affiliates may engage in other business ventures and investment opportunities that may not be allocated equitably among us and such other business ventures.
In particular, we seek to underwrite products and make investments to achieve a favorable return on equity over the long term. In addition, our opportunistic strategy and focus on long-term growth in book value will result in fluctuations in total 31 premiums written from period to period.
In particular, we seek to underwrite products and make investments to achieve a favorable return on equity over the long term. In addition, our strategy and focus on long-term growth in book value will result in fluctuations in total premiums written from period to period.
In accordance with industry practice, we frequently pay amounts owed on claims under our policies to reinsurance brokers and, to a lesser extent, MGAs that, in turn, remit these amounts to the ceding companies that have reinsured a portion of their liabilities with us.
In accordance with industry practice, we frequently pay amounts owed on claims under our policies to reinsurance brokers and MGAs that, in turn, remit these amounts to the ceding companies that have reinsured a portion of their liabilities with us.
A downgrade or withdrawal of the financial strength rating of our operating (re)insurance companies could severely limit or prevent us from writing new policies or renewing existing policies, which could have a material adverse effect on our results of operations and financial condition.
A downgrade or withdrawal of the financial strength rating of our operating insurance and reinsurance companies could severely limit or prevent us from writing new policies or renewing existing policies, which could have a material adverse effect on our results of operations and financial condition.
Moreover, PFIC classification is a factual determination made annually, and even if we are not a PFIC in 2022, we could become a PFIC in later years. Accordingly, we cannot assure you that we will not be treated as a PFIC for 2022 or for any future year.
Moreover, PFIC classification is a factual determination made annually, and even if we are not a PFIC in 2023, we could become a PFIC in later years. Accordingly, we cannot assure you that we will not be treated as a PFIC for 2023 or for any future year.
We use these models and software to help us control risk accumulation, inform management and other stakeholders of capital requirements and to improve the risk/return profile in our overall portfolio of (re)insurance contracts.
We use these models and software to help us control risk accumulation, inform management and other stakeholders of capital requirements and to improve the risk/return profile in our overall portfolio of insurance and reinsurance contracts.
In addition, as our operations expand to other jurisdictions, we will be required to comply with cybersecurity laws in those jurisdictions, which will further increase our cost of compliance. Competitors with greater resources may make it difficult for us to effectively market our products. The (re)insurance industry is highly competitive.
In addition, as our operations expand to other jurisdictions, we will be required to comply with cybersecurity laws in those jurisdictions, which will further increase our cost of compliance. Competitors with greater resources may make it difficult for us to effectively market our products. The insurance and reinsurance industry is highly competitive.
While we intend to operate in a manner that limits our exposure to BEAT, uncertainty remains and we cannot assure you that we will not be subject to material amounts of BEAT in the future. Intragroup distributions and other payments of cash or other assets could become subject to incremental income or withholding taxes.
While we intend to operate in a manner that limits our exposure to BEAT, uncertainty remains and we cannot assure you that we will not be subject to material amounts of BEAT in the future. Intra-group distributions and other payments of cash or other assets could become subject to incremental income or withholding taxes.
This could lead to higher overall losses that we may not be able to recoup, particularly in the current economic and competitive environment, and in light of higher (re)insurance costs.
This could lead to higher overall losses that we may not be able to recoup, particularly in the current economic and competitive environment, and in light of higher insurance and reinsurance costs.
Any such impact could also be felt across our (re)insurance contract portfolio, since similar models and judgment are used in analyzing the majority of our transactions.
Any such impact could also be felt across our insurance and reinsurance contract portfolio, since similar models and judgment are used in analyzing the majority of our transactions.
We use actuarial and computer models, historical (re)insurance and insurance industry loss statistics, and management’s experience and judgment to assist in the establishment of appropriate claims and claim expense reserves.
We use actuarial and computer models, historical reinsurance and insurance industry loss statistics, and management’s experience and judgment to assist in the establishment of appropriate claims and claim expense reserves.
Fluctuations result from a variety of factors, including: • the performance of our investment portfolio; • (re)insurance contract pricing; • our assessment of the quality of available (re)insurance opportunities; • the volume and mix of (re)insurance products we underwrite; • seasonality of the (re)insurance businesses; • loss experience on our (re)insurance liabilities; • low frequency and high severity loss events; • competitiveness in relevant (re)insurance markets; and • our ability to assess and integrate our risk management strategy effectively.
Fluctuations result from a variety of factors, including: • the performance of our underwriting segments; • the performance of our investment portfolio; • insurance and reinsurance contract pricing; • our assessment of the quality of available insurance and reinsurance opportunities; • the volume and mix of insurance and reinsurance products we underwrite; • seasonality of the insurance and reinsurance businesses; • loss experience on our insurance and reinsurance liabilities; • low frequency and high severity loss events; • competitiveness in relevant insurance and reinsurance markets; and • our ability to assess and integrate our risk management strategy effectively.
More specifically, as we continue to review our (re)insurance underwriting portfolio, we may not renew prior business that we believe may be inconsistent with our strategic plan or risk appetite or we believe will not generate better long-term, rather than short-term, results.
More specifically, as we continue to review our insurance and reinsurance underwriting portfolio, we may not renew prior business that we believe may be inconsistent with our strategic plan or risk appetite or we believe will not generate better long-term, rather than short-term, results.
The supply of available (re)insurance capital has increased over the past several years and may increase further, either as a result of capital provided by new entrants, alternative capital providers or by the commitment of additional capital or retention of risks by existing insurers or reinsurers.
The supply of available insurance and reinsurance capital has increased over the past several years and may increase further, either as a result of capital provided by 39 new entrants, alternative capital providers or by the commitment of additional capital or retention of risks by existing insurers or reinsurers.
We continually seek to improve the effectiveness of our contractual provisions to address this exposure but may fail to mitigate such exposure nonetheless. Moreover, we may not be successful in incorporating our preferred contractual provisions into (re)insurance contracts given the competitiveness of the bidding process.
We continually seek to improve the effectiveness of our contractual provisions to address this exposure but may fail to mitigate such exposure nonetheless. Moreover, we may not be successful in incorporating our preferred contractual provisions into insurance and reinsurance contracts given the competitiveness of the bidding process.
The imposition of any of these income taxes could materially and adversely affect our results of operations and financial condition. 52 Certain of our intragroup transactions could become subject to the U.S. Base Erosion and Anti-Abuse Minimum Tax (“BEAT”), which could have a material adverse impact on operating results and make it difficult to forecast our effective tax rate.
The imposition of any of these income taxes could materially and adversely affect our results of operations and financial condition. Certain of our intra-group transactions could become subject to the U.S. Base Erosion and Anti-Abuse Minimum Tax (“BEAT”), which could have a material adverse impact on operating results and make it difficult to forecast our effective tax rate.
See “Risks Relating to Taxation—If we were treated as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes, our U.S. shareholders would be subject to adverse tax consequences.” Consolidation in the (re)insurance industry could adversely impact us.
See “Risks Relating to Taxation—If we were treated as a passive foreign investment company (“PFIC”) for U.S. federal income tax purposes, our U.S. shareholders would be subject to adverse tax consequences.” 34 Consolidation in the insurance and reinsurance industry could adversely impact us.
The Claims Procedures Rule specifically addresses requirements for federal payment, submission of an initial notice of insured loss, loss certifications, timing and process for payment, associated recordkeeping requirements, as well as the Treasury’s audit and investigation authority.
The Claims Procedures Rule enacted under TRIA specifically addresses requirements for federal payment, submission of an initial notice of insured loss, loss certifications, timing and process for payment, associated recordkeeping requirements, as well as the Treasury’s audit and investigation authority.
For a further discussion, see “ Risks Relating to our 35 Business—Global climate change may have a material adverse effect on our business, operating results and financial condition. ” Although we attempt to manage our exposure to such events through a multitude of approaches, including geographic diversification, geographic limits, individual policy limits, exclusions or limitations from coverage, purchase of (re)insurance and expansion of supportive collateralized capacity, the availability of these management tools may be dependent on market factors and, to the extent available, may not respond in the way that is expected.
For a further discussion, see “ Risks Relating to our Business—Global climate change may have a material adverse effect on our business, operating results and financial condition. ” Although we attempt to manage our exposure to such events through a multitude of approaches, including geographic diversification, geographic limits, individual policy limits, exclusions or limitations from coverage, purchase of insurance and reinsurance, the availability of these management tools may be dependent on market factors and, to the extent available, may not respond in the way that is expected.
Changes in climate conditions have resulted in increased severity and frequency of weather-related natural disasters and catastrophes. For example, during the year ended December 31, 2022, the industry experienced several significant severe weather events, including Hurricane Ian. In addition, rising sea levels are expected to add to the risks associated with coastal flooding in many geographical areas.
Changes in climate conditions have resulted in increased severity and frequency of weather-related natural disasters and catastrophes. For example, during the year ended December 31, 2023, the industry experienced several significant severe weather events. In addition, rising sea levels are expected to add to the risks associated with coastal flooding in many geographical areas.
Our debt combined with our other financial obligations and contractual commitments could have significant adverse consequences, including: • requiring us to dedicate a substantial portion of cash flow from operations to the payment of interest on, and principal of, our debt and payment of other obligations and commitments, which will reduce the amounts available to fund working capital, the expansion of our business and other general corporate purposes; • increasing our vulnerability to adverse changes in general economic, industry and market conditions, and exposing us to the risk of changing interest rates; • obligating us to additional restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing; • making it more difficult for us to make payments on our existing or future obligations; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and • placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options.
Our debt combined with our other financial obligations and contractual commitments could have significant adverse consequences, including: • requiring us to dedicate a substantial portion of cash flow from operations to the payment of interest on, and principal of, our debt and payment of other obligations and commitments, which will reduce the amounts available to fund working capital, the expansion of our business and other general corporate purposes; • increasing our vulnerability to adverse changes in general economic, industry and market conditions, and exposing us to the risk of changing interest rates; • obligating us to additional restrictive covenants that may reduce our ability to take certain corporate actions or obtain further debt or equity financing; • making it more difficult for us to make payments on our existing or future obligations; • limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we compete; and • placing us at a competitive disadvantage compared to our competitors that have less debt or better debt servicing options. 44 In addition, a failure to comply with the covenants under our debt instruments could result in an event of default under those instruments.
These issues may adversely affect our business by either extending coverage beyond the period that we intended or by increasing the number or size of claims. In some instances, these changes may not manifest themselves until many years after we have issued insurance or reinsurance contracts that are affected by these changes.
These issues may adversely affect our results of operation and financial condition by either extending coverage beyond the period that we intended or by increasing the number or size of claims. In some instances, these changes may not manifest themselves until many years after we have issued insurance or reinsurance contracts that are affected by these changes.
Reserves are estimates of claims a (re)insurer ultimately expects to pay, based upon facts and circumstances known at the time, predictions of future events, estimates of future trends in claim severity and other variable factors.
Reserves are estimates of claims an insurer or reinsurer ultimately expects to pay, based upon facts and circumstances known at the time, predictions of future events, estimates of future trends in claim severity and other variable factors.
Moreover, many of the MGAs we are investing in are early-stage companies that carry higher operating expenses and a higher degree of uncertainty. Our investments in MGAs are illiquid, and we are subject to transfer restrictions in relation to those investments.
Moreover, many of the MGAs we have invested, and may invest in, in are early-stage companies that carry higher operating expenses and a higher degree of uncertainty. Our investments in MGAs are illiquid, and we are subject to transfer restrictions in relation to those investments.
Loss of all or a substantial portion of the business provided by one or more of significant reinsurance brokers could have a material adverse effect on our business.
We market our reinsurance worldwide primarily through reinsurance brokers. Loss of all or a substantial portion of the business provided by one or more of significant reinsurance brokers could have a material adverse effect on our business.
As part of our strategic transformation, we have focused on: (i) re-underwriting to reduce underwriting volatility and improve performance, (ii) de-risking our investment portfolio and (iii) re-balancing the business mix in our portfolio and growing the 30 Insurance & Services segment.
As part of our strategic transformation, we have focused on: (i) re-underwriting to reduce underwriting volatility and improve performance, (ii) de-risking our investment portfolio and (iii) re-balancing the business mix in our portfolio and growing the Insurance & Services segment. Further, as part of our strategic transformation, we made changes to the structure and composition of our international branch network.
As of December 31, 2022, our outstanding indebtedness included $404.8 million in 2016 Senior Notes, $258.6 million in 2017 SEK Subordinated Notes and $114.6 million in 2015 Senior Notes. We are a holding company and, accordingly, conduct substantially all operations through our operating subsidiaries.
As of December 31, 2023, our outstanding indebtedness included $403.5 million in 2016 Senior Notes, $267.9 million in 2017 SEK Subordinated Notes and $114.8 million in 2015 Senior Notes. We are a holding company and, accordingly, conduct substantially all operations through our operating subsidiaries.
We or our subsidiaries may in the future incur or guarantee additional indebtedness. The indentures governing the 2015 Senior Notes, 2017 SEK Subordinated Notes and 2016 Senior Notes do not limit the amount of additional indebtedness we may incur.
The indentures governing the 2015 Senior Notes, 2017 SEK Subordinated Notes and 2016 Senior Notes do not limit the amount of additional indebtedness we may incur.
Effective February 26, 2021, the Company entered into a three-year, $300 million senior unsecured revolving credit facility (the “Facility”) with JPMorgan Chase Bank, N.A. as administrative agent.
Effective February 26, 2021, the Company entered into a three-year, $300 million senior unsecured revolving credit facility (the “Facility”) with JPMorgan Chase Bank, N.A. as administrative agent , which was renewed in February 2024 for one additional year.
As industry practices and legal, judicial and regulatory conditions change, unexpected issues related to claims and coverage may emerge. Various provisions of our contracts, such as limitations or exclusions from coverage or choice of forum clauses, may be difficult to enforce in the manner we intend, due to, among other things, disputes relating to coverage and choice of legal forum.
Various provisions of our contracts, such as limitations or exclusions from coverage or choice of forum clauses, may be difficult to enforce in the manner we intend, due to, among other things, disputes relating to coverage and choice of legal forum.
For more information about our risks due to terrorist attacks, see “Risks Relating to Our Business—We have exposure to potential terrorist acts that can materially and adversely affect our business, results of operations and/or financial condition.” We have significant exposure to a potential major earthquake or series of earthquakes in California, the Midwestern United States, Canada, Japan and Latin America and to windstorm damage in Northern Europe, the Northeast United States, the United States Atlantic Coast (i.e., Massachusetts to Florida) and the United States Gulf Coast (i.e., Florida to Texas) and Japan.
For more information about our risks due to terrorist attacks, see “Risks Relating to Our Business—We have exposure to potential terrorist acts that can materially and adversely affect our business, results of operations and/or financial condition.” We have significant exposure to a potential major earthquake or series of earthquakes in various geographic regions, including in California, the Midwestern United States, Canada, Japan and Latin America.
In addition, we may be subject to regulations, guidance or determinations emanating from the various regulatory authorities authorized under the Healthcare Act. The effects of, and uncertainty regarding, the U.K.'s withdrawal from the European Union could negatively impact SiriusPoint’s investment portfolio, business and results of operations.
In addition, we may be subject to regulations, guidance or determinations emanating from the various regulatory authorities authorized under the Healthcare Act. Post Brexit developments could negatively impact SiriusPoint’s investment portfolio, business and results of operations.
A downgrade may also require us to establish trusts or post letters of credit for ceding company clients. A client may choose to exercise these rights depending on, among other things, the reasons for such a downgrade, the extent of the downgrade, the prevailing market conditions, the degree of unexpired coverage, and the pricing and availability of replacement reinsurance coverage.
A client may choose to exercise these rights depending on, among other things, the reasons for such a downgrade, the extent of the downgrade, the prevailing market conditions, the degree of unexpired coverage, and the pricing and availability of replacement reinsurance coverage.
However, this conclusion is not free from doubt and the IRS could take a contrary position. While we expect that our insurance subsidiaries will qualify for the active insurance income exception for qualified insurance corporations, in light of pending regulations and in the absence of other detailed guidance, our insurance subsidiaries may not meet the requirements for this exception.
While we expect that our insurance subsidiaries will qualify for the active insurance income exception for qualified insurance corporations, in light of pending regulations and in the absence of other detailed guidance, our insurance subsidiaries may not meet the requirements for this exception.

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Item 2. Properties

Properties — owned and leased real estate

2 edited+0 added−1 removed0 unchanged
Biggest changeFor further discussion of our leasing commitments at December 31, 2022, refer to Note 21 “Commitments and contingencies” in our audited consolidated financial statements included elsewhere in this Annual Report. 59
Biggest changeWe believe that our office space is sufficient for us to conduct our operations 62 for the foreseeable future. For further discussion of our leasing commitments at December 31, 2023, refer to Note 21 “Commitments and contingencies” in our audited consolidated financial statements included elsewhere in this Annual Report.
Item 2. Properties The Company leases office space in Pembroke, Bermuda where the Company’s principal executive office is located. Additionally, the Company leases office space throughout the United States and Europe. We renew and enter into new leases in the ordinary course of business.
Item 2. Properties The Company leases office space in Pembroke, Bermuda where the Company’s principal executive office is located. Additionally, the Company leases office space throughout the United States, Canada and Europe. We renew and enter into new leases in the ordinary course of business.
Removed
We believe that our office space is sufficient for us to conduct our operations for the foreseeable future. As previously disclosed, on November 2, 2022, we announced that we will close our offices in Hamburg, Miami and Singapore and reduce our footprint in Liege and Toronto.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 60 PART II 60 Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 60 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 61 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 89
Biggest changeItem 4. Mine Safety Disclosures 63 PART II 63 Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities 63 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 64 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 92

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+1 added−1 removed5 unchanged
Biggest changeOn August 5, 2021, the Company’s Board of Directors expanded the scope of the prior authority to include the repurchase of outstanding contingent value rights ("CVRs") and warrants, which will allow the Company to repurchase up to $56.3 million of the Company’s outstanding common shares, CVRs and warrants. As of December 31, 2022, all of such authorization remained available.
Biggest changeCommon shares repurchased by the Company during the period were retired. During the year ended December 31, 2021 the Company did not repurchase any of its common shares. On August 5, 2021, the Company’s Board of Directors expanded the scope of the prior authority to include the repurchase of outstanding contingent value rights ("CVRs") and warrants.
Performance The following graph compares the cumulative total shareholder return on our common shares as compared to the cumulative total return of (1) S&P 500 Composite Stock Index (“S&P 500”) and (2) the Dow Jones Property & Casualty Insurance Index 60 (“Dow Jones P&C”) for the five year period commencing December 31, 2017 through to December 31, 2022.
Performance The following graph compares the cumulative total shareholder return on our common shares as compared to the cumulative total return of (1) S&P 500 Composite Stock Index (“S&P 500”) and (2) the Dow Jones Property & Casualty Insurance Index 63 (“Dow Jones P&C”) for the five year period commencing December 31, 2018 through to December 31, 2023.
The above graph assumes that the value of the investment was $100 on December 31, 2017. 2.
The above graph assumes that the value of the investment was $100 on December 31, 2018. 2.
Issuer Purchases of Equity Securities During the year ended December 31, 2022, the Company repurchased 695,047 of its common shares in the open market for $5.0 million at a weighted average cost, including commissions, of $7.17 per share. Common shares repurchased by the Company during the period were retired.
Issuer Purchases of Equity Securities During the year ended December 31, 2023, the Company did not repurchase any of its common shares. During the year ended December 31, 2022, the Company repurchased 695,047 of its common shares in the open market for $5.0 million at a weighted average cost, including commissions, of $7.17 per share.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information Our common shares are listed on the NYSE under the symbol “SPNT”. On February 20, 2023, the latest practicable date, there were 348 holders of record of our common shares.
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities Market Information Our common shares are listed on the NYSE under the symbol “SPN T”. On February 23, 2024 , the latest practicable date, there were 306 holders of record of our common shares.
December 31, 2017 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 t SPNT $ 100.00 $ 65.80 $ 71.81 $ 64.98 $ 55.49 $ 40.27 ■S&P 500 $ 100.00 $ 93.76 $ 120.84 $ 140.49 $ 178.27 $ 143.61 p Dow Jones P&C $ 100.00 $ 94.69 $ 118.02 $ 119.15 $ 141.84 $ 160.40 1.
December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 t SPNT $ 100.00 $ 109.13 $ 98.76 $ 84.34 $ 61.20 $ 120.33 ■S&P 500 $ 100.00 $ 128.88 $ 149.83 $ 190.13 $ 153.16 $ 190.27 p Dow Jones P&C $ 100.00 $ 124.64 $ 125.83 $ 149.79 $ 169.39 $ 189.44 1.
Removed
During the years ended December 31, 2021 and 2020 the Company did not repurchase any of its common shares.
Added
The CVRs were settled upon maturity on February 26, 2023, and are no longer available for repurchase. As of December 31, 2023, the Company was authorized repurchase up to an aggregate of $56.3 million of its outstanding common shares and warrants under its repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

152 edited+72 added−62 removed83 unchanged
Biggest changeThe following is a summary of net investment income (loss) by investment classification, for the years ended December 31, 2022 and 2021: 2022 2021 ($ in millions) Debt securities, available for sale $ 35.1 $ — Debt securities, trading (115.6) (4.9) Short-term investments 17.7 1.6 Other long-term investments (10.6) 35.2 Equity securities (0.4) (2.5) Net realized and unrealized investment gains (losses) from related party investment funds (210.5) 304.0 Realized and unrealized investment gains and net investment income before other investment expenses and investment income (loss) on cash and cash equivalents (284.3) 333.4 Investment expenses (20.3) (11.6) Net investment loss on cash and cash equivalents (18.1) (9.3) Total realized and unrealized investment gains (losses) and net investment income $ (322.7) $ 312.5 67 Investment Returns The following is a summary of the net returns, including realized and unrealized returns, for our investments on a U.S.
Biggest changeInvestment Results The following is a summary of the results from investments and cash for the years ended December 31, 2023 and 2022: 2023 2022 ($ in millions) Gross investment income $ 299.8 $ 133.6 Change in fair value of trading portfolio (1) 30.7 (149.4) Net realized investment losses (40.7) (76.1) Net realized and unrealized investment losses from related party investment funds (1.0) (210.5) Investment results 288.8 (302.4) Investment expenses (16.1) (20.3) Total net investment income and realized and unrealized investment gains (losses) $ 272.7 $ (322.7) (1) Trading portfolio is inclusive of all non-AFS designated investments in the investment portfolio. 71 The following is a summary of the results from investments by investment classification for the years ended December 31, 2023 and 2022: 2023 2022 ($ in millions) Debt securities, available for sale $ 181.6 $ 35.1 Debt securities, trading 66.1 (115.6) Short-term investments 29.3 17.7 Other long-term investments (20.0) (10.6) Derivative instruments 4.8 — Equity securities (0.1) (0.4) Net realized and unrealized investment losses from related party investment funds (1.0) (210.5) Net investment income and realized and unrealized investment gains before other investment expenses and investment income (loss) on cash and cash equivalents 260.7 (284.3) Investment expenses (16.1) (20.3) Net investment income (loss) on cash and cash equivalents 28.1 (18.1) Total net investment income and realized and unrealized investment gains (losses) $ 272.7 $ (322.7) Total net investment income and realized and unrealized investment gains (losses) for the year ended December 31, 2023 was primarily attributable to net investment income related to interest income from our debt and short-term investment portfolio of $277.0 million.
Dollar. Foreign Currency Translation Except for the Canadian reinsurance operations of SiriusPoint America and certain subsidiaries of IMG , the U.S. dollar is the functional currency for SiriusPoint’s business. Assets and liabilities are remeasured into the functional currency using current exchange rates; revenues and expenses are remeasured into the functional currency using the average exchange rate for the period.
Foreign Currency Translation Except for the Canadian reinsurance operations of SiriusPoint America and certain subsidiaries of IMG , the U.S. dollar is the functional currency for SiriusPoint’s business. Assets and liabilities are remeasured into the functional currency using current exchange rates; revenues and expenses are remeasured into the functional currency using the average exchange rate for the period.
Investing Activities Cash flows used in investing activities for the year ended December 31, 2022 primarily relates to the increase in purchases of debt securities during the period resulting from increased premium volume as well as increased investing in short term and fixed income agency investments to in response to rising interest rates.
Cash flows used in investing activities for the year ended December 31, 2022 primarily relates to the increase in purchases of debt securities during the period resulting from increased premium volume as well as increased investing in short term and fixed income agency investments to in response to rising interest rates.
On an ongoing basis, the Company's underwriters review the amounts reported by these third parties for reasonableness based on their experience and knowledge of the subject class of business, taking into account the Company's historical experience with the brokers, ceding companies or MGAs .
On 85 an ongoing basis, the Company's underwriters review the amounts reported by these third parties for reasonableness based on their experience and knowledge of the subject class of business, taking into account the Company's historical experience with the brokers, ceding companies or MGAs .
In order to quantify the potential volatility in the loss reserve estimates, SiriusPoint employs a stochastic simulation approach to produce a range of results around the central estimate and estimated probabilities of possible outcomes. Both the probabilities and the related modeling are subject to inherent uncertainties.
In order to quantify the potential volatility in the loss reserve estimates, SiriusPoint employs a stochastic simulation approach to produce a range of results around the central estimate and estimated probabilities of possible outcomes. Both the probabilities and the related 88 modeling are subject to inherent uncertainties.
The preference shareholders have no voting rights with respect to the Series B preference shares unless dividends have not been paid for six dividend periods, whether or not consecutive, in which case the holders of the Series B preference shares will have the right to elect two directors.
The preference shareholders have no voting rights with respect to the Series B preference shares unless dividends have not been paid for six dividend periods, whether or not consecutive, in which case the holders of the Series B preference shares have the right to elect two directors.
If we raise cash through the issuance of additional indebtedness, we may be subject to additional contractual restrictions on our business. There is no assurance that we would be able to raise the additional funds on favorable terms or at all.
If we raise cash through the issuance of additional 81 indebtedness, we may be subject to additional contractual restrictions on our business. There is no assurance that we would be able to raise the additional funds on favorable terms or at all.
GAAP disclosure requirements related to investments measured using NAV. 86 Valuation of components of purchase consideration, loss and adjustment expenses reserves and intangible assets relating to VOBA and other intangible assets as part of the Sirius Group acquisition Purchase consideration As a part of the total consideration related to the acquisition of Sirius Group, the Company issued various financial instruments, including preference shares, warrants, and other contingent value components, as discussed further in Note 3 “Acquisition of Sirius Group”.
GAAP disclosure requirements related to investments measured using NAV. 89 Valuation of components of purchase consideration, loss and adjustment expenses reserves, and intangible assets relating to VOBA and other intangible assets as part of the Sirius Group acquisition Purchase consideration As a part of the total consideration related to the acquisition of Sirius Group, the Company issued various financial instruments, including preference shares, warrants, and other contingent value components, as discussed further in Note 3 “Acquisition of Sirius Group”.
The fair value of the MGA relationships intangible asset was determined using a variation of the income approach, which 87 involved the use of assumptions related to the discount rate and customer attrition rate, as well as the expected revenue growth rates and profitability margins; • Lloyd’s Capacity - Syndicate 1945 - relates to relationships associated with the right to distribute and market policies underwritten through Lloyd’s Syndicate 1945.
The fair value of the MGA relationships intangible asset was determined using a variation of the income approach, which involved the use of assumptions related to the discount rate and customer attrition rate, as well as the expected revenue growth rates and profitability margins; 90 • Lloyd’s Capacity - Syndicate 1945 - relates to relationships associated with the right to distribute and market policies underwritten through Lloyd’s Syndicate 1945.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment. See Note 6 “Fair value measurements” to our audited consolidated financial statements for additional information on the framework for measuring fair value established by U.S. GAAP disclosure requirements.
To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment. See Note 7 “Fair value measurements” to our audited consolidated financial statements for additional information on the framework for measuring fair value established by U.S. GAAP disclosure requirements.
Our debt and equity instruments as of December 31, 2022 and 2021 are summarized below. 2017 SEK Subordinated Notes On September 22, 2017, we issued floating rate callable subordinated notes denominated in SEK in the amount of SEK 2,750.0 million (or $346.1 million on date of issuance) at a 100% issue price ("2017 SEK Subordinated Notes").
Our debt and equity instruments as of December 31, 2023 and 2022 are summarized below. 2017 SEK Subordinated Notes On September 22, 2017, we issued floating rate callable subordinated notes denominated in SEK in the amount of SEK 2,750.0 million (or $346.1 million on date of issuance) at a 100% issue price ("2017 SEK Subordinated Notes").
Where appropriate to utilize equity method, the Company recognizes its share of the investees’ income in net realized and unrealized investment gains (losses).
Where appropriate to utilize equity method, the Company recognizes its share of the investees’ income in net realized and unrealized investment losses.
See definitions in “Non-GAAP Financial Measures” and reconciliations in “Segment Results” below and Note 4 “Segment reporting” in our audited consolidated financial statements included elsewhere in this Annual Report. Tangible book value per diluted common share is a non-GAAP financial measure. See definition and reconciliation in “Non-GAAP Financial Measures”. Core Results See “Segment Results” below for additional information.
See definitions in “Non-GAAP Financial Measures” and reconciliations in “Segment Results” below and Note 5 “Segment reporting” in our audited consolidated financial statements included elsewhere in this Annual Report. Tangible book value per diluted common share is a non-GAAP financial measure. See definition and reconciliation in “Non-GAAP Financial Measures”. Core Results See “Segment Results” below for additional information.
The determination of premium estimates requires a review of the Company's experience with the ceding companies, familiarity with each market, the timing of the reported information, an analysis and understanding of the characteristics of each class of business and management's judgment of the impact of 82 various factors, including premium or loss trends, on the volume of business written and ceded to the Company.
The determination of premium estimates requires a review of the Company's experience with the ceding companies and MGAs, familiarity with each market, the timing of the reported information, an analysis and understanding of the characteristics of each class of business and management's judgment of the impact of various factors, including premium or loss trends, on the volume of business written and ceded to the Company.
Debt Covenants As of December 31, 2022, SiriusPoint was in compliance with all of the covenants under the 2017 SEK Subordinated Notes, 2016 Senior Notes, and 2015 Senior Notes. Series A Preference Shares On February 26, 2021, certain holders of Sirius Group shares elected to receive Series A preference shares as consideration with respect to the Sirius Group acquisition.
Debt Covenants As of December 31, 2023, SiriusPoint was in compliance with all of the covenants under the 2017 SEK Subordinated Notes, 2016 Senior Notes, and 2015 Senior Notes. Series A Preference Shares On February 26, 2021, certain holders of Sirius Group shares elected to receive Series A preference shares as consideration with respect to the Sirius Group acquisition.
Each restricts issuance of any debt without the consent of the letter of credit provider. Additionally, if an event of default exists, under any of the letter of credit facilities, our subsidiaries could be prohibited from paying dividends. We were in compliance with all of the covenants under the aforementioned letter of credit facilities as of December 31, 2022.
Each restricts issuance of any debt without the consent of the letter of credit provider. Additionally, if an event of default exists, under any of the letter of credit facilities, our subsidiaries could be prohibited from paying dividends. We were in compliance with all of the covenants under the aforementioned letter of credit facilities as of December 31, 2023.
In addition to the regulatory and other contractual constraints to paying dividends, we manage the capital of the group and each of our operating subsidiaries to support our current ratings from AM Best, Fitch and S&P. This could further reduce the ability and amount of dividends that could be paid from subsidiaries to SiriusPoint.
In addition to the regulatory and other contractual constraints to paying dividends, we manage the capital of the group and each of our operating subsidiaries to support our current ratings from AM Best, Fitch and S&P’s. This could further reduce the ability and amount of dividends that could be paid from subsidiaries to SiriusPoint.
Cash, Restricted Cash and Cash Equivalents and Restricted Investments Cash and cash equivalents consist of cash held in banks and other short-term, highly liquid investments with original maturity dates of ninety days or less. We invest a portion of the collateral securing certain reinsurance contracts in U.S. treasury securities and sovereign debt.
Cash, Restricted Cash and Cash Equivalents and Restricted Investments Cash and cash equivalents consist of cash held in banks and other short-term, highly liquid investments with original maturity dates of 90 days or less. We invest a portion of the collateral securing certain reinsurance contracts in U.S. treasury securities and sovereign debt.
The foreign exchange gains of $66.0 million for the year ended December 31, 2022 were primarily due to $36.0 million of foreign exchange gains from our international operations and $38.0 million of foreign currency gains from the 2017 SEK Subordinated Notes, as a result of the strengthening of the U.S. Dollar.
The foreign exchange gains of $66.0 million for the year ended December 31, 2022 were primarily due to $36.0 million of foreign exchange gains from our international operations and $38.0 million of foreign currency gains from the 2017 SEK Subordinated Notes, as a result of the weakening of the U.S. Dollar.
If the recognition threshold is met, then the tax position is measured at the largest amount of benefit that is more than 50% likely of being realized upon ultimate settlement. As of December 31, 2022 , the total reserve for unrecognized tax benefits of $2.3 million.
If the recognition threshold is met, then the tax position is measured at the largest amount of benefit that is more than 50% likely of being realized upon ultimate settlement. As of December 31, 2023 , the total reserve for unrecognized tax benefits of $2.3 million.
For t he year ended December 31, 2022 , losses from the Russia/Ukraine conflict, including losses from the political risk, trade credit, and aviation lines of business, were $12.2 million, or 0.5 percentage points on the combined ratio.
For the year ended December 31, 2022, losses from the Russia/Ukraine conflict, including losses from the political risk, trade credit, and aviation lines of business, were $12.2 million, or 0.5 percentage points on the combined ratio.
There was no evidence of potential impairment of intangible assets as of December 31, 2022. Income Taxes We have subsidiaries and branches that operate in various other jurisdictions around the world that are subject to tax in the jurisdictions in which they operate.
There was no evidence of potential impairment of intangible assets as of December 31, 2023. Income Taxes We have subsidiaries and branches that operate in various other jurisdictions around the world that are subject to tax in the jurisdictions in which they operate.
You should read this discussion in conjunction with our consolidated financial statements and the related notes contained elsewhere in this Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (“Annual Report”).
You should read this discussion in conjunction with our consolidated financial statements and the related notes contained elsewhere in this Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (“Annual Report”).
However, the amount of cash required to fun d loss payments can fluctuate significantly from period to period, due to the low frequency/high severity nature of certain types of business we write. 77 Dividend Capacity SiriusPoint’s ability to pay expenses or dividends or return capital to shareholders will depend upon the availability of dividends or other statutorily permissible distributions from its subsidiaries.
However, the amount of cash required to fun d loss payments can fluctuate significantly from period to period, due to the low frequency/high severity nature of certain types of business we write. 80 Dividend Capacity and Capital SiriusPoint’s ability to pay expenses or dividends or return capital to shareholders will depend upon the availability of dividends or other statutorily permissible distributions from its subsidiaries.
Segment Results — Years ended December 31, 2022 and 2021 The determination of our reportable segments is based on the manner in which management monitors the performance of our operations. We classify our business into two reportable segments - Reinsurance and Insurance & Services. Collectively, the sum of these two segments constitute “Core” results.
Segment Results — Years ended December 31, 2023 and 2022 The determination of our reportable segments is based on the manner in which management monitors the performance of our operations. We classify our business into two reportable segments - Reinsurance and Insurance & Services. Collectively, the 73 sum of these two segments constitute “Core” results.
See Note 6 “Fair value measurements” to our audited consolidated financial statements for additional information on the framework for measuring fair value established by U.S.
See Note 7 “Fair value measurements” to our audited consolidated financial statements for additional information on the framework for measuring fair value established by U.S.
If such capital or liquidity were to be paid or distributed to us or our subsidiaries, as dividends or otherwise, they may be subject to income or withholding taxes. Sirius Group generally intends to operate, and manage its capital and liquidity, in a tax-efficient manner.
If such capital or liquidity were to be paid or distributed to us or our subsidiaries, as dividends or otherwise, they may be subject to 91 income or withholding taxes. SiriusPoint Group generally intends to operate, and manage its capital and liquidity, in a tax-efficient manner.
We believe that the accounting policies that require the most significant judgments and estimations by management are: (1) premium revenue recognition, in cluding evaluation of risk transfer, (2) loss and loss adjustment expense reserves, (3) fair value measurements related to our investments, (4) valuation of loss and adjustment expenses reserves and intangible assets relating to the Value of Business Acquired (“VOBA”) and other intangible assets as part of the Sirius Group acquisition, and (5) income taxes.
We believe that the accounting policies that require the most significant judgments and estimations by management are: (1) premium revenue recognition, (2) loss and loss adjustment expense reserves, (3) fair value measurements related to our investments, (4) valuation of loss and adjustment expenses reserves and intangible assets relating to the Value of Business Acquired (“VOBA”) and other intangible assets as part of the Sirius Group acquisition , and (5) income taxes.
As of December 31, 2022, there were no outstanding borrowings under the Facility. In addition, as of December 31, 2022, SiriusPoint was in compliance with all of the covenants under the Facility.
As of December 31, 2023, there were no outstanding borrowings under the Facility. In addition, as of December 31, 2023, SiriusPoint was in compliance with all of the covenants under the Facility.
See Note 22 “Statutory requirements” in our audited consolidated financial statements included elsewhere in this Annual Report for additional information. For the year ended December 31, 2022, SiriusPoint received $125.0 million (2021 - $74.0 million) of distributions from SiriusPoint Bermuda Insurance Company Ltd. (“SiriusPoint Bermuda”), its immediate wholly-owned subsidiary.
See Note 22 “Statutory requirements” in our audited consolidated financial statements included elsewhere in this Annual Report for additional information. For the year ended December 31, 2023, SiriusPoint received $101.2 million (2022 - $125.0 million) of distributions from SiriusPoint Bermuda Insurance Company Ltd. (“SiriusPoint Bermuda”), its immediate wholly-owned subsidiary.
Financing Activities Cash flows used in financing activities for the year ended December 31, 2022 primarily consisted of $16.0 million for cash dividends paid to preference shareholders and $14.0 million for payments on deposit liability contracts, partially offset by proceeds from repurchase agreements of $17.6 million .
Cash flows used in financing activities for the year ended December 31, 2022 primarily consisted of $16.0 million for cash dividends paid to preference shareholders, $14.0 million for payments on deposit liability contracts and $7.1 million for taxes paid on withholding shares, partially offset by $17.6 million of proceeds from repurchase agreements.
Total realized and unrealized investment losses and net investment income for the year ended December 31, 2022 was primarily attributable to a net investment loss of $202.0 million from our investment in the TP Enhanced Fund, corresponding to a (29.0)% return.
Total net investment income and realized and unrealized investment gains (losses) for the year ended December 31, 2022 was primarily attributable to a net investment loss of $202.0 million from our investment in the TP Enhanced Fund.
See Note 14 “Allowance for expected credit losses” in our audited consolidated financial statements included elsewhere in this Annual Report for additional information on the credit loss methodology. Amortization of Intangible Assets Amortization of intangible assets for the year ended December 31, 2022 was $8.1 million (2021 - $5.9 million).
See Note 14 “Allowance for expected credit losses” in our audited consolidated financial statements included elsewhere in this Annual Report for additional information on the credit loss methodology. Amortization of Intangible Assets Amortization of intangible assets for the year ended December 31, 2023 was $11.1 million (2022 - $8.1 million).
Business Outlook Our business model is diversified and differentiated compared to a traditional P&C insurer given we have three uncorrelated sources of earnings: (i) underwriting results where we are the risk taker; (ii) services fee income from MGAs we consolidate; and (iii) investment results.
Business Outlook Our business model is diversified and differentiated compared to a traditional P&C insurer given we have three uncorrelated sources of earnings; (i) underwriting results where we bear insurance risk; (ii) services fee income from MGAs we consolidate; and (iii) investment results.
The 2015 Senior Notes bear interest at 7.0% and interest is payable semi-annually on February 13 and August 13 of each year. As of December 31, 2022 and 2021, the carrying value of the 2015 Senior Notes was $114.6 million and $114.4 million, respectively, and reflected as debt in the in the consolidated balance sheets.
The 2015 Senior Notes bear interest at 7.0% and interest is payable semi-annually on February 13 and August 13 of each year. As of December 31, 2023 the carrying value of the 2015 Senior Notes was $114.8 million and reflected as debt in the in the consolidated balance sheets (December 31, 2022 - $114.6 million ) .
As of December 31, 2022 , these identifiable intangible assets had a carrying value of $163.8 million and consisted of the following, and are included in intangible assets on the Company’s consolidated balance sheet: • Distribution relationships - refers to the relationships Sirius Group has established with external independent distributors and brokers to facilitate the distribution of its products in the marketplace.
As of December 31, 2023 , these identifiable intangible assets had a carrying value of $152.7 million and consisted of the following, and are included in intangible assets on the Company’s consolidated balance sheet: • Distribution relationships - refers to the relationships Sirius Group has established with external independent distributors and brokers to facilitate the distribution of its products in the marketplace.
As of December 31, 2022 and 2021 the carrying value of the 2017 SEK Subordinated Notes was $258.6 million and $296.3 million, respectively, and reflected as debt in the in the consolidated balance sheets. 78 2016 Senior Notes On November 1, 2016, we issued $400.0 million face value of senior unsecured notes ("2016 Senior Notes") at an issue price of 99.2% for net proceeds of $392.4 million after taking into effect both deferrable and non-deferrable issuance costs.
As of December 31, 2023 the carrying value of the 2017 SEK Subordinated Notes was $267.9 million and reflected as debt in the in the consolidated balance sheets (December 31, 2022 - $258.6 million ) . 2016 Senior Notes On November 1, 2016, we issued $400.0 million face value of senior unsecured notes ("2016 Senior Notes") at an issue price of 99.2% for net proceeds of $392.4 million after taking into effect both deferrable and non-deferrable issuance costs.
The jurisdictions in which our subsidiaries and branches are subject to tax are Australia, Belgium, Canada, Germany, Hong Kong (China), Ireland, Luxembourg, Malaysia, Singapore, Sweden, Switzerland, the United Kingdom, and the United States.
The jurisdictions in which our subsidiaries and branches are subject to tax are Belgium, Bermuda, Canada, Germany, Gibraltar, Hong Kong (China), Ireland, Luxembourg, Singapore, Sweden, Switzerland, the United Kingdom, and the United States.
Such measures, including Core underwriting income, Core net services income, Core income, Core combined ratio, accident year loss ratio, accident year combined ratio, management basis gross premiums written and tangible book value per diluted common share, are referred to as non-GAAP financial measures. These non-GAAP financial measures may be defined or calculated differently by other companies.
Such measures, including Core underwriting income, Core net services income, Core income, Core combined ratio, accident year loss ratio, accident year combined ratio, attritional loss ratio and tangible book value per diluted common share, are referred to as non-GAAP financial measures. These non-GAAP financial measures may be defined or calculated differently by other companies.
This election was made as the AFS model more accurately reflects the investment strategy as we do not actively trade individual securities within our investment portfolio. The AFS portfolio has been funded by sales of the trading portfolio and reallocation of investments from the TP Enhanced Fund during the year ended December 31, 2022.
This election was made as the AFS model more accurately reflects the investment strategy as we do not actively trade individual securities within our investment portfolio. The AFS portfolio has been funded by sales of the trading portfolio and reallocation of investments from the TP Enhanced Fund.
As of December 31, 2022 and 2021, the carrying value of the 2016 Senior Notes was $404.8 million and $406.0 million, respectively, and reflected as debt in the consolidated balance sheets. 2015 Senior Notes On February 13, 2015, we issued $115.0 million of senior unsecured notes (the “2015 Senior Notes”) due February 13, 2025.
As of December 31, 2023 the carrying value of the 2016 Senior Notes was $403.5 million and reflected as debt in the consolidated balance sheets (December 31, 2022 - $404.8 million ) . 2015 Senior Notes On February 13, 2015, we issued $115.0 million of senior unsecured notes (the “2015 Senior Notes”) due February 13, 2025.
As of December 31, 2022, the unamortized fair value adjustment to loss reserves was $53.7 million (2021 - $65.6 million) . On an annual basis, or as other factors necessitate such as an assessment, we evaluate the fair value adjustment to loss reserves for impairment. As of December 31, 2022, there were no indicators of impairment.
As of December 31, 2023, the unamortized fair value adjustment to loss reserves was $44.9 million (December 31, 2022 - $53.7 million) . On an annual basis, or as other factors necessitate such as an assessment, we evaluate the fair value adjustment to loss reserves for impairment. As of December 31, 2023, there were no indicators of impairment.
Recent Accounting Pronouncements See Note 2 “Significant accounting policies” in our audited consolidated financial statements included elsewhere in this Annual Report for additional information on recently issued accounting standards.
See Note 16 “ Income taxes” in our audited consolidated financial statements included elsewhere in this Annual Report for additional information on income taxes. Recent Accounting Pronouncements See Note 2 “Significant accounting policies” in our audited consolidated financial statements included elsewhere in this Annual Report for additional information on recently issued accounting standards.
As a result, we are in the process of closing our offices in Hamburg, Miami and Singapore, and reducing our footprint in Liege and Toronto. Following the anticipated closures and scaling of our operating platform, we will continue to serve clients and underwrite North American property catastrophe business from Bermuda, and international property catastrophe business from Stockholm.
We are in the process of closing our offices in Hamburg, Miami and Singapore, and reducing our footprint in Liege, Toronto and Stockholm. Following the anticipated closures and scaling of our operating platform, we will continue to serve clients and underwrite all property catastrophe business from Bermuda.
As of December 31, 2022, the Company’s Strategic Investments totaled $262.0 million. See Note 6 “Fair value measurements” to our audited consolidated financial statements for additional information on the framework for measuring fair value established by U.S. GAAP disclosure requirements related to investments.
As of December 31, 2023, the Company’s strategic investments totaled $203.9 million. See Note 7 “Fair value measurements” to our audited consolidated financial statements for additional information on the framework for measuring fair value established by U.S. GAAP disclosure requirements related to investments.
Premiums written include amounts reported by brokers and ceding companies, supplemented by the Company's own estimates of premiums where reports have not been received.
Premiums written include amounts reported by brokers and ceding companies for reinsurance and MGAs for direct insurance, supplemented by the Company's own estimates of premiums where reports have not been received.
Core Services Results Services revenue was $215.5 million for the year ended December 31, 2022 compared to $133.7 million for the year ended December 31, 2021. The increase was primarily due to higher services revenue in IMG from increased demand for travel insurance products and services , as well as continued gro wth in Arcadian.
Core Services Results Services revenue was $237.5 million for the year ended December 31, 2023 compared to $215.5 million for the year ended December 31, 2022. The increase was primarily due to higher services revenue in IMG from increased demand for travel insurance products and services, as well as continued growth in Arcadian.
Accident year loss ratio and accident year combined ratio are calculated by excluding prior year loss reserve development to present the impact of current accident year net loss and loss adjustment expenses on the Core loss ratio and Core combined ratio, respectively. These ratios are useful indicators of our underwriting profitability.
Accident year loss ratio and accident year combined ratio are calculated by excluding prior year loss reserve development to present the impact of current accident year net loss and loss adjustment expenses on the Core loss ratio and Core combined ratio, respectively.
The following table details our prior year loss reserve development of liability for net unpaid claims and claim expenses for the years ended December 31, 2022 and 2021: 2022 2021 Unfavorable (favorable) development Unfavorable (favorable) development ($ in millions) Reinsurance $ (8.8) $ (18.6) Insurance & Services (4.7) (13.5) Corporate (7.8) (10.5) Total net unfavorable (favorable) development $ (21.3) $ (42.6) 84 Loss and loss adjustment expense development - 2022 The $21.3 million net decrease in prior years’ reserves for the year ended December 31, 2022 was driven by: • $8.8 million of net favorable prior year re serve development in the Reinsurance segment primarily due to COVID-19 reserve releases, partially offset by reserves strengthening in recognition of the current high inflationary environment and increases on prior year catastrophe events; • $4.7 million of net favorable prior year reserve development in the Insurance & Services segment which was primarily driven loss reductions in A&H reserves due to better than expected loss experience, partially offset by reserve strengthening in direct Workers’ Compensation reserves based on reported loss emergence; and • $7.8 million of net favorable prior year reserve development in Corporate due to runoff surety exposures and property losses .
Loss and loss adjustment expense development - 2022 The $21.3 million net decrease in prior years’ reserves for the year ended December 31, 2022 was driven by: • $8.8 million of net favorable prior year re serve development in the Reinsurance segment primarily due to COVID-19 reserve releases, partially offset by reserves strengthening in recognition of the current high inflationary environment and increases on prior year catastrophe events; • $4.7 million of net favorable prior year reserve development in the Insurance & Services segment which was primarily driven loss reductions in A&H reserves due to better than expected loss experience, partially offset by reserve strengthening in direct Workers’ Compensation reserves based on reported loss emergence; and • $7.8 million of net favorable prior year reserve development in Corporate due to runoff surety exposures and property losses .
Losses incurred included $13.5 million of favorable prior year loss reserve development for the year ended December 31, 2022 compared to favorable prior year loss reserve development of $32.1 million for the year ended December 31, 2021.
Losses incurred included $167.4 million of favorable prior year loss reserve development for the year ended December 31, 2023 compared to favorable prior year loss reserve development of $13.5 million for the year ended December 31, 2022.
The determination of risk transfer is critical to recognizing premiums written and is based, in part, on the use of actuarial pricing models and assumptions and evaluating contractual features that could impact the determination of whether a contract meets risk transfer. If we determine that a reinsurance contract does not transfer sufficient risk, we use deposit accounting.
The determination of risk transfer is critical to recognizing premiums written and is based, in part, on the use of actuarial pricing models and assumptions and evaluating contractual features that could impact the determination of whether a contract meets risk transfer.
We rely heavily on information reported by MGAs and ceding companies, as discussed above. In order to determine the accuracy and completeness of such information, our underwriters, actuaries, and claims personnel perform audits of certain MGAs and ceding companies, where customary. Generally, ceding company audits are not customary outside the United States.
We rely heavily on information reported by MGAs and ceding companies, as discussed above. In order to determine the accuracy and completeness of such information, our underwriters, actuaries, and claims personnel perform audits of certain MGAs and ceding companies, where customary. Any material findings are discussed with the ceding companies.
The following table summarizes premium estimates and related commissions and expenses by segment as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Premium Estimates Commission Estimate Amount Included in Insurance and Reinsurance Balances Receivable, Net Premium Estimates Commission Estimate Amount Included in Insurance and Reinsurance Balances Receivable, Net ($ in millions) Reinsurance $ 948.6 $ (164.9) $ 783.7 $ 982.5 $ (235.1) $ 747.4 Insurance & Services 426.1 (142.9) 283.2 283.2 (85.4) 197.8 Corporate 5.6 0.9 6.5 3.7 0.9 4.6 Total $ 1,380.3 $ (306.9) $ 1,073.4 $ 1,269.4 $ (319.6) $ 949.8 Risk Transfer Determining whether or not a reinsurance contract meets the condition for risk transfer requires judgment.
The following table summarizes premium estimates and related commissions and expenses by segment as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Premium Estimates Commission Estimate Amount Included in Insurance and Reinsurance Balances Receivable, Net Premium Estimates Commission Estimate Amount Included in Insurance and Reinsurance Balances Receivable, Net ($ in millions) Reinsurance $ 923.4 $ (215.1) $ 708.3 $ 948.6 $ (164.9) $ 783.7 Insurance & Services 619.2 (104.4) 514.8 426.1 (142.9) 283.2 Corporate 9.8 (4.7) 5.1 5.6 0.9 6.5 Total $ 1,552.4 $ (324.2) $ 1,228.2 $ 1,380.3 $ (306.9) $ 1,073.4 Risk Transfer Determining whether or not a reinsurance contract meets the condition for risk transfer requires judgment.
These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to our Introductory Note to this Annual Report and the risks and uncertainties described in Part I, Item 1A “Risk Factors.” Our actual results may differ materially from those contained in or implied by any forward-looking statements.
These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to our Introductory Note to this Annual Report and the risks and uncertainties described in Part I, Item 1A “Risk Factors.” Our actual results may differ materially from those contained in or implied by any forward-looking statements. 64 Our fiscal year ends December 31 and, unless otherwise noted, references to years are for fiscal years ended December 31.
We believe we are an underwriting company first as we aim to create a business model which is simplified, fully-integrated and globally connected. We have made significant progress on our strategic priorities during 2022 and been addressing issues driving underperformance.
We are an underwriting-first company as we aim to create a business model which is simplified, fully-integrated and globally connected. We made significant progress on our strategic priorities during 2023 addressing the issues that were driving historical underperformance and volatility.
As of December 31, 2022, total cash and cash equivalents and debt securities with a fair value of $1,428.7 million were pledged as collateral against the letters of credit issued.
As of December 31, 2023, total cash and cash equivalents and debt securities with a fair value of $1.4 billion were pledged as collateral against the letters of credit issued.
(6) The Series B preference shares contain both a mandatory conversion and optional redemption features, with the optional redemption features allowing for settlement in either common shares or cash. Obligations arising from these incentives are excluded from the table above.
These commitments do not have fixed funding dates. Therefore, these commitments are excluded from the table above. (7) The Series B preference shares contain both a mandatory conversion and optional redemption features, with the optional redemption features allowing for settlement in either common shares or cash. Obligations arising from these incentives are excluded from the table above.
We believe it is useful to review Core results as it better reflects how management views the business and reflects our decision to exit the runoff business. The sum of Core results and Corporate results are equal to the consolidated results of operations.
Core underwriting income, Core net services income, Core income and Core combined ratio are non-GAAP financial measures. We believe it is useful to review Core results as it better reflects how management views the business and reflects our decision to exit the runoff business. The sum of Core results and Corporate results are equal to the consolidated results of operations.
Core net services income - consists of services revenues which include commissions, brokerage and fee income related to consolidated MGAs, and other revenues, services expenses which include direct expenses related to consolidated MGAs, services noncontrolling income which represent minority ownership interests in consolidated MGAs, and net investment gains from Strategic Investments which are net investment gains/losses from investment in our strategic partners.
Core net services income - consists of services revenues which include commissions, brokerage and fee income related to consolidated MGAs, and other revenues, and services expenses which include direct expenses related to consolidated MGAs, services noncontrolling income which represent minority ownership interests in consolidated MGAs.
The following table sets forth the computation of book value per common share, book value per diluted common share and tangible book value per diluted common share as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 ($ in millions, except share and per share amounts) Common shareholders’ equity attributable to SiriusPoint common shareholders $ 1,874.7 $ 2,303.7 Carrying value of Series A preference shares issued in merger — 20.4 Diluted common shareholders’ equity attributable to SiriusPoint common shareholders 1,874.7 2,324.1 Intangible assets (163.8) (171.9) Tangible diluted common shareholders' equity attributable to SiriusPoint common shareholders $ 1,710.9 $ 2,152.2 Common shares outstanding 162,177,653 161,929,777 Effect of dilutive stock options, restricted shares, restricted share units, warrants and Series A preference shares 3,492,795 2,898,237 Book value per diluted common share denominator 165,670,448 164,828,014 Unvested restricted shares (1,708,608) (2,590,194) Tangible book value per diluted common share denominator 163,961,840 162,237,820 Book value per common share $ 11.56 $ 14.23 Book value per diluted common share $ 11.32 $ 14.10 Tangible book value per diluted common share $ 10.43 $ 13.27 Liquidity and Capital Resources Liquidity Requirements Liquidity is a measure of a company’s ability to generate cash flows sufficient to meet short-term and long-term cash requirements of its business operations.
The following table sets forth the computation of book value per common share, book value per diluted common share and tangible book value per diluted common share as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 ($ in millions, except share and per share amounts) Common shareholders’ equity attributable to SiriusPoint common shareholders $ 2,313.9 $ 1,874.7 Intangible assets (152.7) (163.8) Tangible common shareholders' equity attributable to SiriusPoint common shareholders $ 2,161.2 $ 1,710.9 Common shares outstanding 168,120,022 162,177,653 Effect of dilutive stock options, restricted share units, warrants and Series A preference shares 5,193,920 3,492,795 Book value per diluted common share denominator 173,313,942 165,670,448 Unvested restricted shares — (1,708,608) Tangible book value per diluted common share denominator 173,313,942 163,961,840 Book value per common share $ 13.76 $ 11.56 Book value per diluted common share $ 13.35 $ 11.32 Tangible book value per diluted common share $ 12.47 $ 10.43 Liquidity and Capital Resources Liquidity Requirements Liquidity is a measure of a company’s ability to generate cash flows sufficient to meet short-term and long-term cash requirements of its business operations.
For the year ended December 31, 2021 , o ther revenues consisted of $51.1 million of service fee revenue from MGAs, a bargain purchase gain of $50.4 million and $49.7 million of changes in the fair value of liability-classified capital instruments.
For the year ended December 31, 2022 , o ther revenues consisted of $82.1 million of service fee revenue from MGA and a gain of $27.4 million of changes in the fair value of liability-classified capital instruments.
Our fiscal year ends December 31 and, unless otherwise noted, references to years are for fiscal years ended December 31. For discussion of our results of operations and changes in financial condition for the year ended December 31, 2021 compared to the year ended December 31, 2020 refer to Part II, Item 7.
For discussion of our results of operations and changes in financial condition for the year ended December 31, 2022 compared to the year ended December 31, 2021 refer to Part II, Item 7.
Outside of property, in the casualty and specialty reinsurance markets, rate momentum and performance remain strong. Ceding commissions on proportional business have stabilized and reduced for some casualty product lines. The MGA market continues to show significant growth in casualty and specialty program business fueled, in part, by an increasing universe of fronting carriers.
Ceding commissions on proportional business have stabilized and reduced for some casualty product lines, such as public directors & officers and commercial auto. The MGA market continues to show significant growth in casualty and specialty program reinsurance business fueled, in part, by an increasing universe of fronting carriers.
The decreases were primarily due to the net loss in the current year. 65 Consolidated Results of Operations — Years ended December 31, 2022 and 2021 The following table sets forth the key items discussed in the consolidated results of operations section, which includes the results from the Company’s reportable segments and Corporate, and the year over year changes, for the years ended December 31, 2022 and 2021: 2022 2021 Change ($ in millions) Total underwriting income (loss) $ 83.3 $ (156.1) $ 239.4 Total realized and unrealized investment gains (losses) and net investment income (322.7) 312.5 (635.2) Other revenues 110.2 151.2 (41.0) Net corporate and other expenses (312.8) (266.6) (46.2) Intangible asset amortization (8.1) (5.9) (2.2) Interest expense (38.6) (34.0) (4.6) Foreign exchange gains 66.0 44.0 22.0 Income tax benefit 36.7 10.7 26.0 Net income (loss) $ (386.0) $ 55.8 $ (441.8) The key changes in our consolidated results for the year ended December 31, 2022 compared to the prior year are discussed below.
Consolidated Results of Operations — Years ended December 31, 2023 and 2022 The following table sets forth the key items discussed in the consolidated results of operations section, which includes the results from the Company’s reportable segments and Corporate, and the year over year changes, for the years ended December 31, 2023 and 2022: 2023 2022 Change ($ in millions) Total underwriting income $ 375.9 $ 83.3 $ 292.6 Net investment income and realized and unrealized investment gains (losses) 272.7 (322.7) 595.4 Other revenues 38.4 110.2 (71.8) Net corporate and other expenses (258.2) (312.8) 54.6 Intangible asset amortization (11.1) (8.1) (3.0) Interest expense (64.1) (38.6) (25.5) Foreign exchange gains (losses) (34.9) 66.0 (100.9) Income tax benefit 45.0 36.7 8.3 Net income (loss) $ 363.7 $ (386.0) $ 749.7 The key changes in our consolidated results for the year ended December 31, 2023 compared to the prior year are discussed below.
The following tables set forth the operating segment results, and the year over year changes, for the years ended December 31, 2022 and 2021: 2022 Reinsurance Insurance & Services Core Eliminations (2) Corporate Segment Measure Reclass Total ($ in millions) Gross premiums written $ 1,521.4 $ 1,884.2 $ 3,405.6 $ — $ 4.1 $ — $ 3,409.7 Net premiums written 1,199.6 1,346.0 2,545.6 — 3.6 — 2,549.2 Net premiums earned 1,213.1 1,086.8 2,299.9 — 18.2 — 2,318.1 Loss and loss adjustment expenses incurred, net 855.9 718.7 1,574.6 (5.2) 19.0 — 1,588.4 Acquisition costs, net 310.3 273.2 583.5 (118.6) (3.0) — 461.9 Other underwriting expenses 113.8 62.8 176.6 — 7.9 — 184.5 Underwriting income (loss) (66.9) 32.1 (34.8) 123.8 (5.7) — 83.3 Services revenue (0.2) 215.7 215.5 (133.4) — (82.1) — Services expenses — 179.2 179.2 — — (179.2) — Net services fee income (loss) (0.2) 36.5 36.3 (133.4) — 97.1 — Services noncontrolling loss — 1.1 1.1 — — (1.1) — Net investment losses from Strategic Investments (3.9) (2.2) (6.1) — — 6.1 — Net services income (loss) (4.1) 35.4 31.3 (133.4) — 102.1 — Segment income (loss) $ (71.0) $ 67.5 $ (3.5) $ (9.6) $ (5.7) $ 102.1 $ 83.3 Underwriting Ratios: (1) Loss ratio 70.6 % 66.1 % 68.5 % 68.5 % Acquisition cost ratio 25.6 % 25.1 % 25.4 % 19.9 % Other underwriting expenses ratio 9.4 % 5.8 % 7.7 % 8.0 % Combined ratio 105.6 % 97.0 % 101.6 % 96.4 % (1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.
While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards. 74 2022 Reinsurance Insurance & Services Core Eliminations (2) Corporate Segment Measure Reclass Total ($ in millions) Gross premiums written $ 1,521.4 $ 1,884.2 $ 3,405.6 $ — $ 4.1 $ — $ 3,409.7 Net premiums written 1,199.6 1,346.0 2,545.6 — 3.6 — 2,549.2 Net premiums earned 1,213.1 1,086.8 2,299.9 — 18.2 — 2,318.1 Loss and loss adjustment expenses incurred, net 855.9 718.7 1,574.6 (5.2) 19.0 — 1,588.4 Acquisition costs, net 310.3 273.2 583.5 (118.6) (3.0) — 461.9 Other underwriting expenses 113.8 62.8 176.6 — 7.9 — 184.5 Underwriting income (loss) (66.9) 32.1 (34.8) 123.8 (5.7) — 83.3 Services revenues (0.2) 215.7 215.5 (133.4) — (82.1) — Services expenses — 179.2 179.2 — — (179.2) — Net services fee income (loss) (0.2) 36.5 36.3 (133.4) — 97.1 — Services noncontrolling loss — 1.1 1.1 — — (1.1) — Net services income (loss) (0.2) 37.6 37.4 (133.4) — 96.0 — Segment income (loss) $ (67.1) $ 69.7 $ 2.6 $ (9.6) $ (5.7) $ 96.0 $ 83.3 Underwriting Ratios: (1) Loss ratio 70.6 % 66.1 % 68.5 % 68.5 % Acquisition cost ratio 25.6 % 25.1 % 25.4 % 19.9 % Other underwriting expenses ratio 9.4 % 5.8 % 7.7 % 8.0 % Combined ratio 105.6 % 97.0 % 101.6 % 96.4 % (1) Underwriting ratios are calculated by dividing the related expense by net premiums earned.
See Note 2 “Significant accounting policies” in our audited consolidated financial statements for additional information on premium revenue recognition and the retrospective impact from the change in accounting policy on the Company’s consolidated financial statements. Changes in premium estimates are expected and may result in adjustments in any reporting period.
See Note 2 “Significant accounting policies” in our audited consolidated financial statements for additional information on premium revenue recognition. Changes in premium estimates are expected and may result in adjustments in any reporting period. These estimates change over time as additional information regarding the underlying business volume is obtained.
We are focused on optimizing capital allocation and rebalancing towards insurance and higher margin and growth lines. As of December 31, 2022, we had equity stakes in 36 entities (MGAs, Insurtech and Other) which underwrite or distribute a wide range of lines of business. Refer to Part I. Item 1. “Business” for additional information.
As of December 31, 2023, we had equity stakes in 26 entities (MGAs, Insurtech and Other) which underwrite or distribute a wide range of lines of business. Refer to Part I. Item 1. “Business” for additional information.
Key Performance Indicators We believe that the following key financial indicators are the most important in evaluating our performance: 2022 2021 ($ in millions, except for per share data and ratios) Combined ratio 96.4 % 109.1 % Core underwriting loss (1) $ (34.8) $ (163.4) Core net services income (1) $ 31.3 $ 11.0 Core loss (1) $ (3.5) $ (152.4) Core combined ratio (1) 101.6 % 109.5 % Return on average common shareholders’ equity attributable to SiriusPoint common shareholders (19.3) % 2.3 % Book value per common share $ 11.56 $ 14.23 Book value per diluted common share $ 11.32 $ 14.10 Tangible book value per diluted common share (1) $ 10.43 $ 13.27 64 (1) Core underwriting loss, Core net services income, Core loss and Core combined ratio are non-GAAP financial measures.
Looking forward, we aim to achieve a consistent return on equity of 12-15% in the medium term. 67 Key Performance Indicators We believe that the following key financial indicators are the most important in evaluating our performance: 2023 2022 ($ in millions, except for per share data and ratios) Combined ratio 84.5 % 96.4 % Core underwriting income (loss) (1) $ 250.2 $ (34.8) Core net services income (1) $ 41.2 $ 37.4 Core income (1) $ 291.4 $ 2.6 Core combined ratio (1) 89.1 % 101.6 % Return on average common shareholders’ equity attributable to SiriusPoint common shareholders 16.2 % (19.3) % Book value per common share $ 13.76 $ 11.56 Book value per diluted common share $ 13.35 $ 11.32 Tangible book value per diluted common share (1) $ 12.47 $ 10.43 (1) Core underwriting income (loss), Core net services income, Core income and Core combined ratio are non-GAAP financial measures.
Strategic Investments The Company’s Strategic Investments are carried at fair value, using the equity method or the cost adjusted for market observable events less impairment method. For Strategic Investments carried at fair value, management uses commonly accepted valuation methods (i.e., income approach, market approach).
Strategic investments The Company’s strategic investments are carried at fair value, using the equity method, or the cost adjusted for market observable events less impairment method. For strategic investments carried at fair value, management generally engages third-party valuation specialist to assist in determination of the fair value based on commonly accepted valuation methods (e.g., income approach, market approach).
Core Underwriting Results We incurred an underwriting loss of $34.8 million and a combined ratio of 101.6% for the year ended December 31, 2022 , compared to an underwriting loss of $163.4 million and a combined ratio of 109.5% for the year ended December 31, 2021.
Core Underwriting Results We generated underwriting income of $250.2 million and a combined ratio of 89.1% for the year ended December 31, 2023 , compared to an underwriting loss of $34.8 million and a combined ratio of 101.6% for the year ended December 31, 2022.
Underwriting Results The increase in underwriting income of $8.8 million for the year ended December 31, 2022 , compared to the year ended December 31, 2021, was primarily driven by the premium growth that generated underwriting income, partially offset by lower favorable prior year loss reserve development.
Underwriting Results The increase in underwriting income of $11.9 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, was primarily driven by the increased favorable prior loss reserve development.
VOBA As part of the acquisition of Sirius Group, we recognized VOBA of $147.9 million. As of December 31, 2022, VOBA was fully amortized and therefore had no carrying value (2021 - $50.0 million).
VOBA As part of the acquisition of Sirius Group, we recognized VOBA of $147.9 million which was fully amortized as of December 31, 2022.
Corporate Corporate includes the results of all runoff business, which represent certain classes of business that we no longer actively underwrite, including those that have asbestos and environmental and other latent liability exposures and certain reinsurance contracts that have interest crediting features. Corporate also includes the results from the 2021 LPT.
Corporate Corporate includes the results of all runoff business, which represents certain classes of business that we no longer actively underwrite, including the effect of the Restructuring Plan and certain reinsurance contracts that have interest crediting features. Corporate results also include asbestos and environmental and other latent liability exposures on a gross basis, which have mostly been ceded.
If actual events differ significantly from the underlying judgments or estimates used by management in the application of these accounting policies, there could be a material adverse effect on our results of operations and financial condition. Premium Revenue Recognition Including Evaluation of Risk Transfer Premium Estimates Effective January 1, 2021, the Company changed its accounting policy for assumed written premiums.
If actual events differ significantly from the underlying judgments or estimates used by management in the application of these accounting policies, there could be a material adverse effect on our results of operations and financial condition.
Core combined ratio - calculated by dividing the sum of Core loss and loss adjustment expenses incurred, net, acquisition costs, net and other underwriting expenses by Core net premiums earned.
Core income - consists of two components, core underwriting income and core net services income. Core income is a key measure of our segment performance. Core combined ratio - calculated by dividing the sum of Core loss and loss adjustment expenses incurred, net, acquisition costs, net and other underwriting expenses by Core net premiums earned.
Investments Investment Portfolio The following is a summary of our total investments, cash and cash equivalents and restricted cash and cash equivalents as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 ($ in millions) Debt securities, available for sale $ 2,635.5 $ — Debt securities, trading 1,526.0 2,085.6 Total debt securities (1) 4,161.5 2,085.6 Short-term investments 984.6 1,075.8 Investments in Related Party Investment Funds 128.8 909.6 Other long-term investments 377.2 456.1 Equity securities 1.6 2.8 Total investments 5,653.7 4,529.9 Cash and cash equivalents 705.3 999.8 Restricted cash and cash equivalents (2) 208.4 948.6 Total invested assets and cash $ 6,567.4 $ 6,478.3 (1) Includes $530.7 million of investments in the Third Point Optimized Credit portfolio (“TPOC Portfolio”). 66 (2) Primarily consists of cash and fixed income securities such as U.S.
See “Net Corporate and Other Expenses” below for additional information. 69 Investments Investment Portfolio The following is a summary of our total investments, cash and cash equivalents and restricted cash and cash equivalents as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 ($ in millions) Debt securities, available for sale $ 4,755.4 $ 2,635.5 Debt securities, trading 534.9 1,526.0 Total debt securities (1) 5,290.3 4,161.5 Short-term investments 371.6 984.6 Investments in related party investment funds 105.6 128.8 Other long-term investments 308.5 377.2 Equity securities 1.6 1.6 Total investments 6,077.6 5,653.7 Cash and cash equivalents 969.2 705.3 Restricted cash and cash equivalents (2) 132.1 208.4 Total invested assets and cash $ 7,178.9 $ 6,567.4 (1) Includes $562.0 million of investments in the Third Point Optimized Credit portfolio (“TPOC Portfolio”) as of December 31, 2023.
See “Non-GAAP Financial Measures” for an explanation and reconciliation. As of December 31, 2022 , book value per common share was $11.56, representing a decrease of $2.67 per share, or 18.8%, from $14.23 as of December 31, 2021.
See “Non-GAAP Financial Measures” for an explanation and reconciliation. 68 As of December 31, 2023 , book value per common share was $13.76, representing an increase of $2.20 per share, or 19.0%, from $11.56 as of December 31, 2022.
In such cases, we review information from ceding companies for unusual or unexpected results. Any material findings are discussed with the ceding companies. We sometimes encounter situations where it is determined that a claim presentation from a ceding company is not in accordance with contract terms. Most situations are resolved without the need for litigation or arbitration.
We sometimes encounter situations where it is determined that a claim presentation from a ceding company is not in accordance with contract terms. Most situations are resolved without the need for litigation or arbitration. However, in the infrequent situations where a resolution is not possible, SiriusPoint defends its position in such arbitration or litigation.
Loss and Loss Adjustment Expense Reserves Loss and Loss Adjustment Expense Reserves by Reportable Segment The following table sum marize loss and loss adjustment expenses reserves net of reinsurance recoveries separated between (i) case reserves for claims reported ("Case") and (ii) incurred but not reported ("IBNR") reserves for losses that have 83 occurred but for which claims have not yet been reported and for expected future development on case reserves as of December 31, 2022 and 2021: December 31, 2022 December 31, 2021 Case IBNR Total (1) Case IBNR Total (1) ($ in millions) Reinsurance $ 1,117.4 $ 1,776.4 $ 2,893.8 $ 1,109.8 $ 1,712.6 $ 2,822.4 Insurance & Services 145.1 593.2 738.3 81.8 296.4 378.2 Corporate 57.8 202.6 260.4 45.7 379.8 425.5 Total $ 1,320.3 $ 2,572.2 $ 3,892.5 $ 1,237.3 $ 2,388.8 $ 3,626.1 (1) Excludes deferred charges on retroactive reinsurance contracts.
If we determine that a reinsurance contract does not transfer sufficient risk, we use deposit accounting. 86 Loss and Loss Adjustment Expense Reserves Loss and Loss Adjustment Expense Reserves by Reportable Segment The following table summarize loss and loss adjustment expenses reserves net of reinsurance recoveries separated between (i) case reserves for claims reported ("Case") and (ii) incurred but not reported ("IBNR") reserves for losses that have occurred but for which claims have not yet been reported and for expected future development on case reserves as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Case IBNR Total (1) Case IBNR Total (1) ($ in millions) Reinsurance $ 440.4 $ 1,385.7 $ 1,826.1 $ 1,117.4 $ 1,776.4 $ 2,893.8 Insurance & Services 212.9 852.3 1,065.2 145.1 593.2 738.3 Corporate 156.0 265.7 421.7 57.8 202.6 260.4 Total $ 809.3 $ 2,503.7 $ 3,313.0 $ 1,320.3 $ 2,572.2 $ 3,892.5 (1) Excludes deferred charges on retroactive reinsurance contracts.
Accordingly, such payments or earnings may be subject to income or withholding tax in jurisdictions where they are not currently taxed or at higher rates of tax than currently taxed, and the applicable tax authorities could also attempt to apply income or withholding tax to past earnings or payments. 88 See Note 16 “ Income taxes” in our audited consolidated financial statements included elsewhere in this Annual Report for additional information on income taxes.
Accordingly, such payments or earnings may be subject to income or withholding tax in jurisdictions where they are not currently taxed or at higher rates of tax than currently taxed, and the applicable tax authorities could also attempt to apply income or withholding tax to past earnings or payments.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThis benchmark rate has increased year to date and it is possible that it will continue to do so, which could result in increasing our interest expense in U.S. dollars. 89 Foreign Currency Exchange Risk In the ordinary course of business, we hold non-U.S. dollar denominated assets and liabilities, which are valued using period-end exchange rates.
Biggest changeForeign Currency Exchange Risk In the ordinary course of business, we hold non-U.S. dollar denominated assets and liabilities, which are valued using period-end exchange rates. Non-U.S. dollar denominated foreign revenues and expenses are valued using average exchange rates over the period.
This can occur because (i) the analysis floors interest rates at a de minimis level in falling rate scenarios, muting price increases, (ii) portions of the fixed income investment portfolio may be callable, muting price increases in falling interest rate scenarios and/or (iii) portions of the fixed income investment portfolio may experience cash flow extension in higher interest rate environments, which generally results in lower fixed income asset prices.
This can occur because (i) the analysis floors interest rates at a de minimis level in falling 92 rate scenarios, muting price increases, (ii) portions of the fixed income investment portfolio may be callable, muting price increases in falling interest rate scenarios and/or (iii) portions of the fixed income investment portfolio may experience cash flow extension in higher interest rate environments, which generally results in lower fixed income asset prices.
Item 8. Financial Statements and Supplementary Data See our consolidated financial statements and notes thereto and required financial statement schedules commencing on page F-1. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Not applicable.
Item 8. Financial Statements and Supplementary Data See our consolidated financial statements and notes thereto and required financial statement schedules commencing on page F-1. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Not applicable. 93
The following table summarizes the estimated effects of a hypothetical 10% increase and decrease in the value of the U.S. dollar against select foreign currencies would have had on the carrying value of our net assets as of December 31, 2022: 10% increase 10% decrease ($ in millions) British Pound to U.S. dollar $ (1.2) $ 1.2 Euro to U.S. dollar 0.1 (0.1) Swedish Krona to U.S. dollar 5.4 (5.4) Swiss Franc to U.S. dollar (0.2) 0.2 Canadian Dollar to U.S. dollar $ (3.2) $ 3.2 Other Long-term Investments Price Risk The carrying values of our other long-term investments are at either fair value, using the equity method, net asset value, or management's cost less any impairment, which is based on fair value, as of the balance sheet date.
The following table summarizes the estimated effects of a hypothetical 10% increase and decrease in the value of the U.S. dollar against select foreign currencies would have had on the carrying value of our net assets as of December 31, 2023: 10% increase 10% decrease ($ in millions) Australian Dollar to U.S. dollar $ (3.3) $ 3.3 Swedish Krona to U.S. dollar 2.1 (2.1) Euro to U.S. dollar (1.0) 1.0 British Pound to U.S. dollar (0.6) 0.6 Canadian Dollar to U.S. dollar $ (0.4) $ 0.4 Other Long-term Investments Price Risk The carrying values of our other long-term investments are at either fair value, using the equity method, net asset value, or management's cost less any impairment, which is based on fair value, as of the balance sheet date.
Market prices of the underlying investment securities, in general, are subject to fluctuations. Assuming a hypothetical 10% and 30% increase or decrease in the value of our investments in Related Party Investment Funds as of December 31, 2022 , the carrying value of these investments would have increased or decreased by approximately $12.9 million and $38.6 million, pre-tax, respectively.
Market prices of the underlying investment securities, in general, are subject to fluctuations. Assuming a hypothetical 10% and 30% increase or decrease in the value of our investments in related party investment funds as of December 31, 2023 , the carrying value of these investments would have increased or decreased by approximately $10.6 million and $31.7 million, pre-tax, respectively.
Assuming a hypothetical 10% and 30% increase or decrease in the value of our other long-term investments as of December 31, 2022 , the carrying value of our other long-term investments would have increased or decreased by approximately $37.7 million and $113.2 million, pre-tax, respectively.
Assuming a hypothetical 10% and 30% increase or decrease in the value of our other long-term investments as of December 31, 2023 , the carrying value of our other long-term investments would have increased or decreased by approximately $30.9 million and $92.6 million, pre-tax, respectively.
Non-U.S. dollar denominated foreign revenues and expenses are valued using average exchange rates over the period. Foreign currency exchange-rate risk is the risk that we will incur losses on a U.S. dollar basis due to adverse changes in foreign currency exchange rates.
Foreign currency exchange-rate risk is the risk that we will incur losses on a U.S. dollar basis due to adverse changes in foreign currency exchange rates.
The following table summarizes the estimated effects of hypothetical increases and decreases in market interest rates on our debt securities as of December 31, 2022: Fair value Assumed change in interest rate Estimated fair value after change in interest rate Pre-tax increase (decrease) in carrying value ($ in millions) Debt securities $ 4,161.5 300 bp decrease $ 4,428.2 $ 266.7 200 bp decrease 4,339.2 177.7 100 bp decrease 4,250.3 88.8 50 bp decrease 4,205.8 44.3 50 bp increase 4,114.5 (47.0) 100 bp increase 4,067.7 (93.8) 200 bp increase 3,974.1 (187.4) 300 bp increase $ 3,880.5 $ (281.0) The magnitude of the fair value decrease in rising rates scenarios may be more significant than the fair value increase in comparable falling rates scenarios.
The following table summarizes the estimated effects of hypothetical increases and decreases in market interest rates on our debt securities as of December 31, 2023: Fair value Assumed change in interest rate Estimated fair value after change in interest rate Pre-tax increase (decrease) in carrying value ($ in millions) Debt securities $ 5,290.3 300 bp decrease $ 5,723.7 $ 433.4 200 bp decrease 5,579.3 289.0 100 bp decrease 5,434.8 144.5 50 bp decrease 5,362.6 72.3 50 bp increase 5,215.4 (74.9) 100 bp increase 5,140.4 (149.9) 200 bp increase 4,990.5 (299.8) 300 bp increase $ 4,840.6 $ (449.7) The magnitude of the fair value decrease in rising rates scenarios may be more significant than the fair value increase in comparable falling rates scenarios.
Interest payments on our 2017 SEK Subordinated Notes are required to be serviced in Swedish kronor by reference to Stockholm Interbank Offered Rate, a floating interest rate benchmark.
Interest payments on our 2017 SEK Subordinated Notes are required to be serviced in Swedish kronor by reference to Stockholm Interbank Offered Rate, a floating interest rate benchmark. This benchmark rate has increased year to date and it is possible that it will continue to do so, which could result in increasing our interest expense in U.S. dollars.

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