HAMILTON, Bermuda, March 5, 2020 /PRNewswire/ -- Sirius
International Insurance Group, Ltd. (Nasdaq: SG) ("Sirius Group" or
the "Company") today reported results for the fourth quarter and
full year ended December 31, 2019. The Company reported a
comprehensive (loss) of $(117)
million for the fourth quarter of 2019 compared to
$(136) million for the fourth quarter
of 2018. For the year ended December 31, 2019, the
comprehensive loss was $(82) million
compared to a comprehensive loss of $(80)
million for the year ended December 31, 2018. Book
value per common share was $14.23 as
of December 31, 2019 compared to $14.80 as of December 31, 2018, a decrease
of 3.9%.
Adjusted book value per share(1) was $14.57 as of December 31, 2019, compared to
$15.24 as of December 31, 2018,
a decrease of 4.4%. Adjusted tangible book value per
share(1) was $10.22 as of
December 31, 2019, compared to $10.76 as of December 31, 2018, a decrease
of 5.0%.
"Although we made substantial progress on our global
reorganization during the year, our 2019 financial results were
overwhelmed by underwriting losses mainly in our Property lines,"
said Kip Oberting, President and
Chief Executive Officer of Sirius Group. "Regarding our ownership
situation, we have been working hard in developing actionable
alternatives. This includes, but is not limited to,
alternatives that could enhance the Company's capital position and
demonstrate financial flexibility. We recently announced that
we have engaged Barclays to assist in a path forward. We have a
75-year history in this business, and we've successfully managed
through past storms and transitions. We are confident that
this time will be no different."
- Net (loss) attributable to common shareholders for the fourth
quarter of 2019 was $(137) million.
Basic and diluted earnings per common share was $(1.19). This compares to net (loss) attributable
to common shareholders of $(154)
million and basic and diluted earnings per common share of
$(1.31) for the fourth quarter of
2018.
- For the year ended December 31, 2019, net (loss)
attributable to common shareholders was $(38) million. Basic earnings per common share
was $(0.33) and diluted earnings per
common share was $(0.37). This
compares to a net (loss) attributable to common shareholders of
$(43) million and basic and diluted
earnings per common share of $(0.36)
for the year ended December 31, 2018.
- For the fourth quarter of 2019, Operating (loss) attributable
to common shareholders(1) was $(96) million compared to an Operating (loss)
attributable to common shareholders of $(106) million for the fourth quarter of 2018.
For the year ended December 31, 2019, Operating (loss)
attributable to common shareholders was $(162) million compared to an Operating (loss)
attributable to common shareholders of $(56)
million for 2018.
"The fourth quarter result was negatively impacted by losses in
our Global Property segment, including $65
million from Typhoon Hagabis as well as $20 million of losses from riots in Chile," commented Ralph Salamone, Executive Vice President and
Chief Financial Officer of Sirius Group. "On the positive
side, our investment portfolio performed well for the year with a
5.2% return. In January 2020 our
Sirius Global Solutions team completed an incoming run-off Loss
Portfolio bringing on $70 million of
assets and reserves, demonstrating their ability to deliver run-off
solutions."
|
(1)
|
Adjusted book value,
Adjusted book value per share, Adjusted tangible book value,
Adjusted tangible book value per share, and Operating (loss)
attributable to common shareholders are non-GAAP financial
measures. See accompanying Reconciliation of Non-GAAP Financial
Measures.
|
Fourth Quarter and Full Year 2019 Summary
Underwriting
Sirius Group's combined ratio was 121% for the fourth quarter of
2019 compared to 127% for the fourth quarter of 2018. The decrease
in the combined ratio was mainly driven by lower current year
catastrophe losses, partially offset by current accident year
losses in the Global Property and Specialty & Casualty
segments. The fourth quarter of 2019 included 19 points of current
year catastrophe losses, net of reinsurance and reinstatement
premiums, compared to 33 points of current year catastrophe losses,
net of reinsurance and reinstatement premiums, for the fourth
quarter of 2018. The fourth quarter of 2019 also included 4 points
of net unfavorable prior year loss reserve development compared to
5 points of net unfavorable prior year loss reserve development for
the fourth quarter of 2018.
- Gross written premiums for the fourth quarter of 2019 were
$380 million, an increase of 25%
compared to the fourth quarter of 2018, driven by Specialty &
Casualty ($46 million) and Global
Property ($41 million).
- Pre-tax catastrophe losses, net of reinsurance and
reinstatement premiums, were $75
million for the fourth quarter of 2019 compared to
$114 million for the fourth quarter
of 2018.
- Highlights by reportable segment for the fourth quarter of 2019
include the following:
-
- Global Property produced a $(75)
million underwriting (loss) and a 143% combined ratio driven
mainly by catastrophe losses and current accident year losses.
Current year catastrophe losses, net of reinsurance and
reinstatement premiums, were $74
million for the quarter primarily from Typhoon Hagibis
($65 million) and Typhoon Lekima
($8 million).
- Global A&H produced $3
million of underwriting income, including net service fee
income, and a combined ratio of 97%.
- Specialty & Casualty produced a $(15) million underwriting (loss) and a combined
ratio of 115%, driven mainly by current accident year losses for
Aviation (including $8 million from
the first quarter of 2019 Ethiopian Airlines flight crash) and
Casualty. Partially offsetting these losses was net favorable prior
year loss reserve development of $3
million.
- Runoff & Other produced $1
million of underwriting income driven mainly by net
favorable prior year loss reserve development.
For the year ended December 31, 2019, Sirius Group's
combined ratio was 111% compared to 103% for the year ended
December 31, 2018. The increase in the combined ratio was
driven primarily by net unfavorable prior year loss reserve
development and higher current accident year losses in the Global
Property and Specialty & Casualty segments. Sirius Group's
2019 combined ratio included 7 points of net unfavorable prior year
loss reserve development compared to 1 point of net favorable prior
year loss reserve development in 2018. The combined ratios for the
years 2019 and 2018 included 13 points and 15 points, respectively,
of current year catastrophe losses, net of reinsurance and
reinstatement premiums.
Gross written premiums for 2019 were $1,903 million, an increase of 5% compared to
2018, driven by increases in the Specialty & Casualty segment
($132 million) and the Global A&H
segment ($92 million) partially
offset by a decrease in the Global Property segment ($114 million).
- Pre-tax catastrophe losses, net of reinsurance and
reinstatement premiums, amounted to $194
million for each of the years ended December 31, 2019 and 2018.
- Highlights by reportable segment for 2019 included the
following:
-
- Global Property produced an underwriting (loss) of $(129) million and a 120% combined ratio driven
by catastrophes losses of $192
million, net of reinsurance and reinstatement premiums, from
Typhoon Hagibis ($65 million),
Typhoon Faxai ($53 million) and
Hurricane Dorian ($40 million). In
addition, 2019 included higher current accident year losses, and
net unfavorable prior year loss reserve development of $92 million.
- Global A&H produced $42
million of underwriting income, including net service fee
income from IMG and Armada of $27
million, and a combined ratio of 97%.
- Specialty & Casualty produced an underwriting loss of
$(51) million and a combined ratio of
114%, driven mainly by higher current accident year losses in
Aviation (including $12 million from
the 2019 Ethiopian Airlines flight crash) and Casualty.
Underwriting results were also negatively impacted by net
unfavorable prior year loss reserve development of $12 million, primarily from the Casualty
Reinsurance book.
- Runoff & Other produced an underwriting (loss) of
$(13) million mainly due to operating
expenses.
Investments and Other
- During the fourth quarter of 2019, the investment portfolio
returned 0.4% in original currencies and 0.8% in U.S. Dollars.
-
- Total investment result for the fourth quarter of 2019, which
includes the sum of net investment income, net realized and
unrealized investment gains (losses) in net income, and change in
foreign currency translation on investments recognized through
other comprehensive income, was $37
million, compared to $(42)
million in 2018, an increase of $79
million. Included in the fourth quarter investment results
are foreign exchange gains (losses) of $24
million in 2019 compared to $(5)
million in 2018.
- For the year ended December 31,
2019, the investment portfolio returned 5.2% in both
original currencies and in U.S. Dollars.
-
- Total investment result for the full year 2019 was $178 million, compared to $(46) million in 2018, an increase of
$224 million. Included in the full
year investment results are foreign exchange gains (losses) of
$1 million in 2019 compared to
$(44) million in 2018.
- Common shareholders' equity as of December 31, 2019 was $1,640 million compared to $1,705 million at December
31, 2018. The decrease was primarily due to a comprehensive
loss of $(82) million. Book value
ended the fourth quarter of 2019 at $1,640
million compared to $1,705
million as of December 31,
2018. Adjusted book value(1) ended the fourth
quarter of 2019 at $1,868 million
compared to $1,937 million as of
December 31, 2018.
Supplemental Materials
In addition to this press release, we have provided supplemental
financial information relating to fourth quarter and full year
results. Readers are encouraged to visit the "Financial
Information" section of Sirius Group's website located at
http://ir.siriusgroup.com to view the supplemental financial
information.
Non-GAAP Financial Measures
In presenting Sirius Group's results, management has included
and discussed non-GAAP financial measures: Adjusted book
value, Adjusted book value per share, Adjusted tangible book value,
Adjusted tangible book value per share, and Operating (loss) income
attributable to common shareholders. The Company believes that
these non-GAAP financial measures, which may be defined and
calculated differently by other companies, better explain and
enhance the understanding of the Company's results of operations.
However, these measures should not be viewed as a substitute for
those determined in accordance with generally accepted accounting
principles in the United States of
America (''GAAP''). A reconciliation of Adjusted book value,
Adjusted book value per share, Adjusted tangible book value,
Adjusted tangible book value per share, and Operating (loss) income
attributable to common shareholders to the most comparable GAAP
measures is included in the attached financial information in
accordance with Regulation G.
About Sirius Group
Sirius Group, with $2.5 billion of
total capital and roots dating back to 1945, is a global multi-line
(re)insurer headquartered in Bermuda with a unique global branch network,
including offices in Stockholm,
New York and London. Sirius
Group's success over the years has come from working with honest,
capable partners. Sirius Group provides a fully diversified
set of tailored risk products to clients in approximately 150
countries, including health and travel products to consumers
through its two managing general underwriters, ArmadaCorp Capital,
LLC and IMG, Inc. Sirius Group has been publicly traded since
November 2018. You can learn more by visiting
www.siriusgroup.com.
Cautionary Note Regarding Forward-Looking Statements
We have made statements in this press release that are
forward-looking statements within the meaning of the federal
securities laws, including the Private Securities Litigation Reform
Act of 1995, including statements about the future ownership,
capital position and financial flexibility of the Company. You can
identify forward-looking statements by the use of forward-looking
terminology such as "plan," "believe," "expect," "anticipate,"
"intend," "outlook," "estimate," "forecast," "project," "target,"
"continue," "could," "may," "might," "will," "possible,"
"potential," "predict," "should," "would," "seeks," "likely," and
other similar words and expressions, but the absence of these words
does not mean that a statement is not forward-looking. The
forward-looking statements are based on the current expectations of
the management of Sirius Group and speak only as of the date of
this document. There can be no assurance that future developments
will be those that have been anticipated. These forward-looking
statements involve a number of risks, uncertainties or other
assumptions that may cause actual results or performance to be
materially different from those expressed or implied by these
forward-looking statements. These risks and uncertainties include,
but are not limited to, Sirius Group's exposure to unpredictable
catastrophic and casualty events and unexpected accumulations of
attritional losses; increased competition from existing insurers
and reinsurers and from alternative capital providers, such as
insurance-linked funds and collateralized special purpose insurers;
decreased demand for Sirius Group's insurance or reinsurance
products, consolidation and cyclical changes in the insurance and
reinsurance industry; the inherent uncertainty of estimating loss
and loss adjustment expenses reserves, including asbestos and
environmental reserves, and the possibility that such reserves may
be inadequate to cover Sirius Group's ultimate liability for
losses; a decline in or withdrawal of Sirius Group's operating
subsidiaries' ratings with rating agencies; the exposure of Sirius
Group's investments to interest rate, credit, equity risks and
market volatility, which may limit Sirius Group's net income and
may affect the adequacy of its capital and liquidity; losses
related to cyber-attacks on Sirius Group's information technology
systems; the impact of various risks associated with transacting
business in foreign countries, including foreign currency
exchange-rate risk and political risks on investments in, and
revenues from, Sirius Group's operations outside the U.S.; the
possibility that Sirius Group may become subject to additional
onerous governmental or regulatory requirements or fail to comply
with applicable regulatory and solvency requirements; Sirius
Group's significant deferred tax assets may become materially
impaired as a result of insufficient taxable income or a reduction
in applicable corporate tax rates or other change in applicable tax
law; a decrease in the fair value of Global A&H and/or Sirius
Group's intangible assets may result in future impairments; the
limited liquidity and trading of Sirius Group's securities; CMIG
International Holding Pte. Ltd.'s status as a controlling
shareholder, including its affiliates' liquidity issues, and
actions taken by CMIG International Holding Pte. Ltd or any other
parties in interest in connection with such liquidity issues
including ownership changes; Sirius Group's status as a
publicly traded company, foreign private issuer and controlled
company; the consequences of the written resolution of Sirius
Group's controlling shareholder which may prohibit the Board
of Sirius Group from issuing any form of equity without shareholder
approval; and other risks identified in Sirius Group's Annual
Report on Form 10-K for the year ended December 31, 2019, subsequent Quarterly Reports
on Form 10-Q and other filings with the U.S. Securities and
Exchange Commission. Should one or more of these risks or
uncertainties materialize, or should any of the assumptions made by
the management of Sirius Group prove incorrect, actual results may
vary in material respects from those projected in these
forward-looking statements. Except as required by applicable law or
regulation, we disclaim any obligation to publicly update or revise
any forward-looking statement to reflect changes in underlying
assumptions or factors, or new information, data or methods, future
events or other circumstances after the date of this release.
Sirius
International Insurance Group, Ltd.
Consolidated
Balance Sheets
As at
December 31, 2019 and December 31, 2018
|
|
(Expressed in
millions of U.S. dollars, except share information)
|
December 31,
2019
|
December 31,
2018
|
|
Unaudited
|
|
Assets
|
|
|
Fixed maturity
investments, trading, at fair value (Amortized cost 2019:
$1,656.6;
2018: $1,952.9)
|
$
|
1,681.0
|
|
$
|
1,949.2
|
|
Short-term
investments, at fair value (Amortized cost 2019: $1,090.9;
2018:
$716.1)
|
1,085.2
|
|
715.5
|
|
Equity securities,
trading, at fair value (Cost 2019: $379.2; 2018: $409.4)
|
405.2
|
|
380.0
|
|
Other long-term
investments, at fair value (Cost 2019: $315.4; 2018:
$337.6)
|
346.8
|
|
365.0
|
|
Cash
|
136.3
|
|
119.4
|
|
Restricted
cash
|
14.3
|
|
12.8
|
|
Total investments and
cash
|
3,668.8
|
|
3,541.9
|
|
Accrued investment
income
|
11.2
|
|
14.1
|
|
Insurance and
reinsurance premiums receivable
|
730.1
|
|
630.6
|
|
Reinsurance
recoverable on unpaid losses
|
410.3
|
|
350.2
|
|
Reinsurance
recoverable on paid losses
|
73.9
|
|
55.0
|
|
Funds held by ceding
companies
|
293.9
|
|
186.8
|
|
Ceded unearned
insurance and reinsurance premiums
|
162.0
|
|
159.8
|
|
Deferred acquisition
costs
|
148.2
|
|
141.6
|
|
Deferred tax
asset
|
166.7
|
|
202.5
|
|
Accounts receivable
on unsettled investment sales
|
6.7
|
|
5.0
|
|
Goodwill
|
400.8
|
|
400.6
|
|
Intangible
assets
|
179.8
|
|
195.6
|
|
Other
assets
|
161.4
|
|
124.0
|
|
Total
assets
|
$
|
6,413.8
|
|
$
|
6,007.7
|
|
Liabilities
|
|
|
Loss and loss
adjustment expense reserves
|
$
|
2,331.5
|
|
$
|
2,016.7
|
|
Unearned insurance
and reinsurance premiums
|
708.0
|
|
647.2
|
|
Ceded reinsurance
payable
|
244.7
|
|
206.9
|
|
Funds held under
reinsurance treaties
|
169.1
|
|
110.6
|
|
Deferred tax
liability
|
205.9
|
|
237.4
|
|
Debt
|
685.2
|
|
696.8
|
|
Accounts payable on
unsettled investment purchases
|
2.3
|
|
3.2
|
|
Other
liabilities
|
201.3
|
|
150.5
|
|
Total
liabilities
|
4,548.0
|
|
4,069.3
|
|
Commitments and
contingencies
|
|
|
Mezzanine
equity
|
|
|
Series B
preference shares
|
223.0
|
|
232.2
|
|
Total mezzanine
equity
|
223.0
|
|
232.2
|
|
Common
shareholders' equity
|
|
|
Common shares (shares
issued and outstanding, 2019: 115,299,341;
2018: 115,151,251)
|
1.2
|
|
1.2
|
|
Additional paid-in
surplus
|
1,098.2
|
|
1,089.1
|
|
Retained
earnings
|
778.5
|
|
816.6
|
|
Accumulated other
comprehensive (loss)
|
(237.5)
|
|
(202.4)
|
|
Total common
shareholders' equity
|
1,640.4
|
|
1,704.5
|
|
Non-controlling
interests
|
2.4
|
|
1.7
|
|
Total
equity
|
1,642.8
|
|
1,706.2
|
|
Total liabilities,
mezzanine equity, and equity
|
$
|
6,413.8
|
|
$
|
6,007.7
|
|
Sirius
International Insurance Group, Ltd.
Consolidated
Statements of (Loss) (Unaudited)
For the three
months and years ended December 31, 2019 and
2018
|
|
|
Three months
ended
December 31
|
Years ended
December 31
|
(Expressed in
millions of U.S. dollars, except share and per share
information)
|
2019
|
2018
|
2019
|
2018
|
Revenues
|
|
|
|
|
Net earned insurance
and reinsurance premiums
|
$
|
384.8
|
|
$
|
347.8
|
|
$
|
1,441.6
|
|
$
|
1,262.3
|
|
Net investment
income
|
17.4
|
|
19.6
|
|
84.7
|
|
71.4
|
|
Net realized
investment gains (losses)
|
16.8
|
|
(5.7)
|
|
56.7
|
|
2.3
|
|
Net unrealized
investment (losses) gains
|
(62.8)
|
|
(52.2)
|
|
80.6
|
|
(23.2)
|
|
Net foreign exchange
(losses) gains
|
(1.7)
|
|
1.0
|
|
7.7
|
|
22.7
|
|
Revaluation of
contingent consideration
|
(2.2)
|
|
9.6
|
|
(6.3)
|
|
9.6
|
|
Other
revenue
|
(0.3)
|
|
16.7
|
|
55.1
|
|
112.7
|
|
Total
revenues
|
352.0
|
|
336.8
|
|
1,720.1
|
|
1,457.8
|
|
Expenses
|
|
|
|
|
Loss and loss
adjustment expenses
|
359.8
|
|
347.2
|
|
1,170.3
|
|
900.0
|
|
Insurance and
reinsurance acquisition expenses
|
73.3
|
|
66.4
|
|
288.7
|
|
255.4
|
|
Other underwriting
expenses
|
32.0
|
|
29.1
|
|
138.2
|
|
146.2
|
|
General and
administrative expenses
|
29.2
|
|
19.9
|
|
109.8
|
|
77.9
|
|
Intangible asset
amortization expenses
|
4.0
|
|
4.0
|
|
15.8
|
|
15.8
|
|
Impairment of
intangible assets
|
—
|
|
8.0
|
|
—
|
|
8.0
|
|
Interest expense on
debt
|
7.7
|
|
7.7
|
|
31.0
|
|
30.8
|
|
Total
expenses
|
506.0
|
|
482.3
|
|
1,753.8
|
|
1,434.1
|
|
Pre-tax (loss)
income
|
(154.0)
|
|
(145.5)
|
|
(33.7)
|
|
23.7
|
|
Income tax benefit
(expense)
|
3.7
|
|
15.0
|
|
(11.9)
|
|
(40.4)
|
|
Net
(loss)
|
(150.3)
|
|
(130.5)
|
|
(45.6)
|
|
(16.7)
|
|
Less: Income
attributable to non-controlling interests
|
(0.1)
|
|
(0.5)
|
|
(1.7)
|
|
(1.4)
|
|
Net (loss)
attributable to Sirius Group
|
(150.4)
|
|
(131.0)
|
|
(47.3)
|
|
(18.1)
|
|
Change in carrying
value of Series B preference shares
|
13.1
|
|
(36.4)
|
|
9.2
|
|
(36.4)
|
|
Add: Gain on
redemption of Series A redeemable preference shares
|
—
|
|
13.8
|
|
—
|
|
13.8
|
|
Less: Accrued
dividends on Series A redeemable preference shares
|
—
|
|
—
|
|
—
|
|
(2.6)
|
|
Net (loss)
attributable to Sirius Group's common shareholders
|
$
|
(137.3)
|
|
$
|
(153.6)
|
|
$
|
(38.1)
|
|
$
|
(43.3)
|
|
|
|
|
|
|
Net (loss) per
common share and common share equivalent
|
|
|
|
|
Basic earnings per
common share and common share equivalent
|
$
|
(1.19)
|
|
$
|
(1.31)
|
|
$
|
(0.33)
|
|
$
|
(0.36)
|
|
Diluted earnings per
common share and common share equivalent
|
$
|
(1.19)
|
|
$
|
(1.31)
|
|
$
|
(0.37)
|
|
$
|
(0.36)
|
|
Weighted average
number of common shares and common share
equivalents outstanding:
|
|
|
|
|
Basic weighted
average number of common shares and common
share equivalents outstanding
|
115,258,327
|
|
117,040,026
|
115,234,105
|
|
119,253,924
|
Diluted weighted
average number of common shares and common
share equivalents outstanding
|
115,258,327
|
|
117,040,026
|
127,135,775
|
|
119,253,924
|
Sirius
International Insurance Group, Ltd.
Consolidated
Statements of Comprehensive (Loss) (Unaudited)
For the three
months and years ended December 31, 2019 and
2018
|
|
|
Three months
ended
December 31
|
Years ended
December 31
|
(Expressed in
millions of U.S. dollars)
|
2019
|
2018
|
2019
|
2018
|
Comprehensive
(loss)
|
|
|
|
|
Net (loss)
|
$
|
(150.3)
|
|
$
|
(130.5)
|
|
$
|
(45.6)
|
|
$
|
(16.7)
|
|
Other
comprehensive income (loss)
|
|
|
|
|
Change in foreign
currency translation, net of tax
|
33.9
|
|
(4.7)
|
|
(35.1)
|
|
(61.9)
|
|
Total other
comprehensive income (loss)
|
33.9
|
|
(4.7)
|
|
(35.1)
|
|
(61.9)
|
|
Comprehensive
(loss)
|
(116.4)
|
|
(135.2)
|
|
(80.7)
|
|
(78.6)
|
|
Net (income)
attributable to non-controlling interests
|
(0.1)
|
|
(0.5)
|
|
(1.7)
|
|
(1.4)
|
|
Comprehensive
(loss) attributable to Sirius Group
|
$
|
(116.5)
|
|
$
|
(135.7)
|
|
$
|
(82.4)
|
|
$
|
(80.0)
|
|
Sirius
International Insurance Group, Ltd.
Consolidated
Underwriting Results by Segment
|
|
|
Three months ended
December 31, 2019
|
(Expressed in
millions of U.S. dollars)
|
Global
Property
|
Global
A&H
|
Specialty
&
Casualty
|
Runoff &
Other
|
Corporate
Elimination
|
Total
|
Gross written
premiums
|
$
|
127.9
|
|
$
|
133.9
|
|
$
|
118.3
|
|
$
|
(0.5)
|
|
$
|
—
|
|
$
|
379.6
|
|
Net written
premiums
|
$
|
89.1
|
|
$
|
98.0
|
|
$
|
105.7
|
|
$
|
1.0
|
|
$
|
—
|
|
$
|
293.8
|
|
Net earned insurance
and reinsurance premiums
|
$
|
172.0
|
|
$
|
113.3
|
|
$
|
98.5
|
|
$
|
1.0
|
|
$
|
—
|
|
$
|
384.8
|
|
Loss and allocated
LAE
|
(204.4)
|
|
(72.7)
|
|
(77.2)
|
|
2.6
|
|
—
|
|
(351.7)
|
|
Insurance and
reinsurance acquisition expenses
|
(25.1)
|
|
(30.7)
|
|
(26.6)
|
|
(0.3)
|
|
9.4
|
|
(73.3)
|
|
Technical (loss)
profit
|
(57.5)
|
|
9.9
|
|
(5.3)
|
|
3.3
|
|
9.4
|
|
(40.2)
|
|
Unallocated
LAE
|
(1.2)
|
|
(1.9)
|
|
(2.2)
|
|
(0.1)
|
|
(2.7)
|
|
(8.1)
|
|
Other underwriting
expenses
|
(16.0)
|
|
(4.9)
|
|
(7.5)
|
|
(1.3)
|
|
(2.3)
|
|
(32.0)
|
|
Underwriting
(loss) income
|
(74.7)
|
|
3.1
|
|
(15.0)
|
|
1.9
|
|
4.4
|
|
(80.3)
|
|
Service fee
revenue
|
—
|
|
26.6
|
|
—
|
|
—
|
|
(10.3)
|
|
16.3
|
|
Managing general
underwriter unallocated LAE
|
—
|
|
(3.6)
|
|
—
|
|
—
|
|
3.6
|
|
—
|
|
Managing general
underwriter other
underwriting expenses
|
—
|
|
(2.3)
|
|
—
|
|
—
|
|
2.3
|
|
—
|
|
General and
administrative expenses, MGU +
Runoff & Other
|
—
|
|
(20.6)
|
|
—
|
|
(0.7)
|
|
—
|
|
(21.3)
|
|
Underwriting
(loss) income, including net
service fee income
|
$
|
(74.7)
|
|
$
|
3.2
|
|
$
|
(15.0)
|
|
$
|
1.2
|
|
$
|
—
|
|
$
|
(85.3)
|
|
|
|
|
|
|
|
|
Underwriting
Ratios (1) (2)
|
|
|
|
|
|
|
Loss ratio
|
119.5
|
%
|
65.8
|
%
|
80.6
|
%
|
NM
|
NM
|
93.5
|
%
|
Acquisition expense
ratio
|
14.6
|
%
|
27.1
|
%
|
27.0
|
%
|
NM
|
NM
|
19.0
|
%
|
Other underwriting
expense ratio
|
9.3
|
%
|
4.3
|
%
|
7.6
|
%
|
NM
|
NM
|
8.3
|
%
|
Combined
ratio
|
143.4
|
%
|
97.2
|
%
|
115.2
|
%
|
NM
|
NM
|
120.8
|
%
|
|
|
|
|
|
|
|
(1) Underwriting ratios are
calculated by dividing the related expense by net earned insurance
and reinsurance premiums.
|
(2) Ratios considered not meaningful
("NM") to Runoff & Other and Corporate Eliminations.
|
Sirius
International Insurance Group, Ltd.
Consolidated
Underwriting Results by Segment
|
|
|
Year Ended
December 31, 2019
|
(Expressed in
millions of U.S. dollars)
|
Global
Property
|
Global
A&H
|
Specialty
&
Casualty
|
Runoff &
Other
|
Corporate
Elimination
|
Total
|
Gross written
premiums
|
$
|
848.4
|
|
$
|
593.4
|
|
$
|
456.7
|
|
$
|
4.2
|
|
$
|
—
|
|
$
|
1,902.7
|
|
Net written
premiums
|
$
|
625.7
|
|
$
|
458.1
|
|
$
|
416.3
|
|
$
|
2.5
|
|
$
|
—
|
|
$
|
1,502.6
|
|
Net earned insurance
and reinsurance premiums
|
$
|
635.9
|
|
$
|
443.3
|
|
$
|
360.2
|
|
$
|
2.2
|
|
$
|
—
|
|
$
|
1,441.6
|
|
Loss and allocated
LAE
|
(582.7)
|
|
(271.3)
|
|
(271.6)
|
|
(1.8)
|
|
—
|
|
(1,127.4)
|
|
Insurance and
reinsurance acquisition expenses
|
(107.3)
|
|
(125.8)
|
|
(98.8)
|
|
(2.9)
|
|
46.1
|
|
(288.7)
|
|
Technical (loss)
profit
|
(54.1)
|
|
46.2
|
|
(10.2)
|
|
(2.5)
|
|
46.1
|
|
25.5
|
|
Unallocated
LAE
|
(11.4)
|
|
(7.4)
|
|
(9.3)
|
|
(1.0)
|
|
(13.8)
|
|
(42.9)
|
|
Other underwriting
expenses
|
(63.9)
|
|
(23.7)
|
|
(31.2)
|
|
(5.9)
|
|
(13.5)
|
|
(138.2)
|
|
Underwriting
(loss) income
|
(129.4)
|
|
15.1
|
|
(50.7)
|
|
(9.4)
|
|
18.8
|
|
(155.6)
|
|
Service fee
revenue
|
—
|
|
124.2
|
|
—
|
|
—
|
|
(49.6)
|
|
74.6
|
|
Managing general
underwriter unallocated LAE
|
—
|
|
(17.3)
|
|
—
|
|
—
|
|
17.3
|
|
—
|
|
Managing general
underwriter other underwriting expenses
|
—
|
|
(13.5)
|
|
—
|
|
—
|
|
13.5
|
|
—
|
|
General and
administrative expenses, MGU + Runoff & Other
|
—
|
|
(66.9)
|
|
—
|
|
(3.7)
|
|
—
|
|
(70.6)
|
|
Underwriting
(loss) income, including net service fee income
|
$
|
(129.4)
|
|
$
|
41.6
|
|
$
|
(50.7)
|
|
$
|
(13.1)
|
|
$
|
—
|
|
$
|
(151.6)
|
|
|
|
|
|
|
|
|
Underwriting
Ratios (1) (2)
|
|
|
|
|
|
|
Loss ratio
|
93.4
|
%
|
62.9
|
%
|
78.0
|
%
|
NM
|
NM
|
81.2
|
%
|
Acquisition expense
ratio
|
16.9
|
%
|
28.4
|
%
|
27.4
|
%
|
NM
|
NM
|
20.0
|
%
|
Other underwriting
expense ratio
|
10.0
|
%
|
5.3
|
%
|
8.7
|
%
|
NM
|
NM
|
9.6
|
%
|
Combined
ratio
|
120.3
|
%
|
96.6
|
%
|
114.1
|
%
|
NM
|
NM
|
110.8
|
%
|
|
|
|
|
|
|
|
(1) Underwriting ratios are
calculated by dividing the related expense by net earned insurance
and reinsurance premiums.
|
(2) Ratios considered not meaningful
("NM") to Runoff & Other and Corporate Eliminations.
|
Sirius
International Insurance Group, Ltd.
Consolidated
Underwriting Results by Segment
|
|
|
Three months ended
December 31, 2018
|
(Expressed in
millions of U.S. dollars)
|
Global
Property
|
Global
A&H
|
Specialty
&
Casualty
|
Runoff &
Other
|
Corporate
Elimination
|
Total
|
Gross written
premiums
|
$
|
86.7
|
|
$
|
125.6
|
|
$
|
72.2
|
|
$
|
18.3
|
|
$
|
—
|
|
$
|
302.8
|
|
Net written
premiums
|
$
|
85.9
|
|
$
|
93.6
|
|
$
|
64.4
|
|
$
|
17.8
|
|
$
|
—
|
|
$
|
261.7
|
|
Net earned insurance
and reinsurance premiums
|
$
|
159.7
|
|
$
|
99.2
|
|
$
|
71.2
|
|
$
|
17.7
|
|
$
|
—
|
|
$
|
347.8
|
|
Loss and allocated
LAE
|
(206.4)
|
|
(51.0)
|
|
(55.5)
|
|
(25.3)
|
|
—
|
|
(338.2)
|
|
Insurance and
reinsurance acquisition expenses
|
(27.6)
|
|
(27.4)
|
|
(20.6)
|
|
(0.5)
|
|
9.7
|
|
(66.4)
|
|
Technical (loss)
profit
|
(74.3)
|
|
20.8
|
|
(4.9)
|
|
(8.1)
|
|
9.7
|
|
(56.8)
|
|
Unallocated
LAE
|
(2.8)
|
|
(1.6)
|
|
(1.4)
|
|
—
|
|
(3.2)
|
|
(9.0)
|
|
Other underwriting
expenses
|
(15.2)
|
|
(6.7)
|
|
(3.9)
|
|
(1.1)
|
|
(2.2)
|
|
(29.1)
|
|
Underwriting
(loss) income
|
(92.3)
|
|
12.5
|
|
(10.2)
|
|
(9.2)
|
|
4.3
|
|
(94.9)
|
|
Service fee
revenue
|
—
|
|
26.2
|
|
—
|
|
—
|
|
(10.7)
|
|
15.5
|
|
Managing general
underwriter unallocated LAE
|
—
|
|
(4.2)
|
|
—
|
|
—
|
|
4.2
|
|
—
|
|
Managing general
underwriter other
underwriting expenses
|
—
|
|
(2.2)
|
|
—
|
|
—
|
|
2.2
|
|
—
|
|
General and
administrative expenses, MGU +
Runoff & Other
|
—
|
|
(16.1)
|
|
—
|
|
(0.2)
|
|
—
|
|
(16.3)
|
|
Underwriting
(loss) income, including net
service fee income
|
$
|
(92.3)
|
|
$
|
16.2
|
|
$
|
(10.2)
|
|
$
|
(9.4)
|
|
$
|
—
|
|
$
|
(95.7)
|
|
|
|
|
|
|
|
|
Underwriting
Ratios (1) (2)
|
|
|
|
|
|
|
Loss ratio
|
131.0
|
%
|
53.0
|
%
|
79.9
|
%
|
NM
|
NM
|
99.8
|
%
|
Acquisition expense
ratio
|
17.3
|
%
|
27.6
|
%
|
28.9
|
%
|
NM
|
NM
|
19.1
|
%
|
Other underwriting
expense ratio
|
9.5
|
%
|
6.8
|
%
|
5.5
|
%
|
NM
|
NM
|
8.4
|
%
|
Combined
ratio
|
157.8
|
%
|
87.4
|
%
|
114.3
|
%
|
NM
|
NM
|
127.3
|
%
|
|
|
|
|
|
|
|
(1) Underwriting ratios are
calculated by dividing the related expense by net earned insurance
and reinsurance premiums.
|
(2) Ratios considered not meaningful
("NM") to Runoff & Other and Corporate Eliminations.
|
Sirius
International Insurance Group, Ltd.
Consolidated
Underwriting Results by Segment
|
|
|
Year ended
December 31, 2018
|
(Expressed in
millions of U.S. dollars)
|
Global
Property
|
Global
A&H
|
Specialty
&
Casualty
|
Runoff &
Other
|
Corporate
Elimination
|
Total
|
Gross written
premiums
|
$
|
962.4
|
|
$
|
500.6
|
|
$
|
325.1
|
|
$
|
32.9
|
|
$
|
—
|
|
$
|
1,821.0
|
|
Net written
premiums
|
$
|
655.0
|
|
$
|
379.8
|
|
$
|
292.7
|
|
$
|
29.6
|
|
$
|
—
|
|
$
|
1,357.1
|
|
Net earned insurance
and reinsurance premiums
|
$
|
636.0
|
|
$
|
357.6
|
|
$
|
239.5
|
|
$
|
29.2
|
|
$
|
—
|
|
$
|
1,262.3
|
|
Loss and allocated
LAE
|
(518.2)
|
|
(189.0)
|
|
(142.9)
|
|
(13.0)
|
|
—
|
|
(863.1)
|
|
Insurance and
reinsurance acquisition expenses
|
(121.1)
|
|
(109.7)
|
|
(65.5)
|
|
(2.8)
|
|
43.7
|
|
(255.4)
|
|
Technical (loss)
profit
|
(3.3)
|
|
58.9
|
|
31.1
|
|
13.4
|
|
43.7
|
|
143.8
|
|
Unallocated
LAE
|
(10.5)
|
|
(5.9)
|
|
(5.9)
|
|
(1.6)
|
|
(13.0)
|
|
(36.9)
|
|
Other underwriting
expenses
|
(68.2)
|
|
(27.4)
|
|
(28.2)
|
|
(6.3)
|
|
(16.1)
|
|
(146.2)
|
|
Underwriting
(loss) income
|
(82.0)
|
|
25.6
|
|
(3.0)
|
|
5.5
|
|
14.6
|
|
(39.3)
|
|
Service fee
revenue
|
—
|
|
115.7
|
|
—
|
|
—
|
|
(44.7)
|
|
71.0
|
|
Managing general
underwriter unallocated LAE
|
—
|
|
(14.0)
|
|
—
|
|
—
|
|
14.0
|
|
—
|
|
Managing general
underwriter other
underwriting expenses
|
—
|
|
(16.1)
|
|
—
|
|
—
|
|
16.1
|
|
—
|
|
General and
administrative expenses, MGU +
Runoff & Other
|
—
|
|
(53.6)
|
|
—
|
|
(3.1)
|
|
—
|
|
(56.7)
|
|
Underwriting
(loss) income, including net
service fee income
|
$
|
(82.0)
|
|
$
|
57.6
|
|
$
|
(3.0)
|
|
$
|
2.4
|
|
$
|
—
|
|
$
|
(25.0)
|
|
|
|
|
|
|
|
|
Underwriting
Ratios (1) (2)
|
|
|
|
|
|
|
Loss ratio
|
83.1
|
%
|
54.5
|
%
|
62.1
|
%
|
NM
|
NM
|
71.3
|
%
|
Acquisition expense
ratio
|
19.0
|
%
|
30.7
|
%
|
27.3
|
%
|
NM
|
NM
|
20.2
|
%
|
Other underwriting
expense ratio
|
10.7
|
%
|
7.7
|
%
|
11.8
|
%
|
NM
|
NM
|
11.6
|
%
|
Combined
ratio
|
112.8
|
%
|
92.9
|
%
|
101.2
|
%
|
NM
|
NM
|
103.1
|
%
|
|
|
|
|
|
|
|
(1) Underwriting ratios are
calculated by dividing the related expense by net earned insurance
and reinsurance premiums.
|
(2) Ratios considered not meaningful
("NM") to Runoff & Other and Corporate Eliminations.
|
Sirius International Insurance Group,
Ltd.
Reconciliation of Non-GAAP Financial
Measures
Adjusted book value, Adjusted book value per share, Adjusted
tangible book value, and Adjusted tangible book value per
share
Adjusted book value, Adjusted book value per share, Adjusted
tangible book value, and Adjusted tangible book value per share are
non-GAAP financial measures. Adjusted book value and Adjusted
book value per share are used to show the Company's total worth on
a per-share basis and are useful to management and investors in
analyzing the intrinsic value of the Company. Adjusted
tangible book value and Adjusted tangible book value per share are
useful to investors because they measure the realizable value of
shareholder returns, excluding the impact of goodwill, intangible
assets, and net deferred liability on intangible assets.
Adjusted shares outstanding is derived by summing Common shares
outstanding, Series B preference shares outstanding, and the earned
portion of share-based compensation awards. Adjusted book value is
derived by summing Total common shareholders' equity, the Series B
preference share amount reflected in mezzanine equity, and the
Earned portion of future proceeds from stock option awards.
Outstanding warrants are excluded as they are anti-dilutive as of
the respective reporting dates. Adjusted tangible book value is
derived by subtracting Goodwill, Intangible assets and Net deferred
tax liability on intangible assets from Adjusted book value.
At December 31, 2019, Adjusted book value, Adjusted book
value per share, Adjusted tangible book value, and Adjusted
tangible book value per share include the earned effects
of share-based compensation awards issued during 2019.
Adjusted book value per share is derived by dividing the
Adjusted book value by the Adjusted shares outstanding. Adjusted
tangible book value per share is derived by dividing Adjusted
tangible book value by the Adjusted shares outstanding.
The reconciliation to Total common shareholders' equity and Book
value per common share, the most directly comparable GAAP measures,
are presented in the table below.
|
December
31,
|
|
December
31,
|
(Expressed in
millions of U.S. dollars, except share and per share
amounts)
|
2019
|
|
2018
|
Common shares
outstanding
|
115,299,341
|
|
115,151,251
|
Series B preference
shares outstanding
|
11,901,670
|
|
11,901,670
|
Earned share-based
compensation awards, excluding stock options
|
629,716
|
|
—
|
Earned portion of
Stock option awards issued
|
381,929
|
|
—
|
Adjusted shares
outstanding
|
128,212,656
|
|
127,052,921
|
|
|
|
|
|
|
Total common
shareholders' equity
|
$
|
1,640.4
|
|
$
|
1,704.5
|
Series B preference
shares
|
223.0
|
|
232.2
|
Earned portion of
future proceeds from stock option awards
|
4.9
|
|
—
|
Adjusted book
value
|
$
|
1,868.3
|
|
$
|
1,936.7
|
Goodwill
|
(400.8)
|
|
(400.6)
|
Intangible
assets
|
(179.8)
|
|
(195.6)
|
Net deferred tax
liability on intangible assets
|
22.8
|
|
26.3
|
Adjusted tangible
book value
|
$
|
1,310.5
|
|
$
|
1,366.8
|
|
|
|
Book value per
common share
|
$
|
14.23
|
|
$
|
14.80
|
Adjusted book
value per share
|
$
|
14.57
|
|
$
|
15.24
|
Adjusted tangible
book value per share
|
$
|
10.22
|
|
$
|
10.76
|
Operating (loss) attributable to common shareholders
The Company uses Operating (loss) attributable to common
shareholders as a measure to evaluate the underlying fundamentals
of its operations and believes it to be a useful measure of its
core performance. Operating (loss) attributable to common
shareholders as used herein differs from net (loss) attributable to
common shareholders, which the Company believes is the most
directly comparable GAAP measure, by the exclusion of net realized
and unrealized gains and losses on investments, net foreign
exchange gains (losses) and the associated income tax expense or
benefit. The Company's management believes that Operating (loss)
attributable to common shareholders is useful to investors because
it is more reflective of the Company's core business, as it removes
the variability arising from fluctuations in the Company's fixed
maturity investment portfolio, equity investments trading,
investments-related derivatives, and net foreign exchange gains
(losses) and the associated income tax expense or benefit of those
fluctuations. The following is a reconciliation of net (loss)
attributable to common shareholders to Operating (loss)
attributable to common shareholders:
|
Three months ended
December 31,
|
Years ended
December 31,
|
(Expressed in
millions of U.S. dollars)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
Net (loss)
attributable to common shareholders
|
$
|
(137.3)
|
|
$
|
(153.6)
|
|
$
|
(38.1)
|
|
$
|
(43.3)
|
|
Adjustment for net
realized and unrealized losses (gains) on investments
|
46.0
|
|
57.9
|
|
(137.3)
|
|
20.9
|
|
Adjustment for net
foreign exchange losses (gains)
|
1.7
|
|
(1.0)
|
|
(7.7)
|
|
(22.7)
|
|
Adjustment for income
tax (benefit) expense(1)
|
(6.2)
|
|
(9.7)
|
|
21.4
|
|
(11.3)
|
|
Operating (loss)
attributable to common shareholders
|
$
|
(95.8)
|
|
$
|
(106.4)
|
|
$
|
(161.7)
|
|
$
|
(56.4)
|
|
|
(1)Adjustment for income tax expense
represents the income tax expense associated with the adjustment
for net realized and unrealized gains on investments and the income
tax expense associated with the adjustment for net foreign exchange
gains. The income tax impact is estimated by applying the statutory
rates of applicable jurisdictions, after consideration of other
relevant factors.
|
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SOURCE Sirius International Insurance Group, Ltd.