Segment reporting

6 Months Ended

Jun. 30, 2022

Segment Reporting [Abstract]

Segment reporting

4. Segment reporting

The determination of the Company’s business segments is based on the manner in which management monitors the performance of its operations. The Company reports two operating segments: Reinsurance and Insurance & Services. The Company’s segments each have managers who are responsible for the overall profitability of their segments and who are directly accountable to the Company’s chief operating decision maker, the Chief Executive Officer ("CEO"). The CEO assesses segment operating performance, allocates capital, and makes resource allocation decisions based on Segment income (loss). The Company does not manage its assets by segment; accordingly, total assets are not allocated to the segments.

Reinsurance

The Company is a leading global (re)insurer, which offers both treaty and facultative reinsurance worldwide through its network of local branches. The Company participates in the broker market for reinsurance treaties written in the United States and Bermuda primarily on a proportional and excess of loss basis. For the Company’s international business, the book consists of treaty, written on both a proportional and excess of loss basis, facultative, and primary business, primarily in Europe, Asia and Latin America.

The Reinsurance segment provides coverage in the following product lines:

Aviation & Space – Aviation covers loss of or damage to an aircraft and the aircraft operations' liability to passengers, cargo and hull as well as to third parties, and Space covers damage to a satellite during launch and in orbit.

Casualty – covers a cross section of all casualty lines, including general liability, umbrella, auto, workers’ compensation, professional liability, and other specialty classes.

Contingency – covers event cancellation and non-appearance. The Company offers this class on a treaty reinsurance basis on a selective basis for a few key clients.

Credit & Bond – covers traditional short-term commercial credit insurance, including pre-agreed domestic and export sales of goods and services with typical coverage periods of 60 to 120 days.

Marine & Energy – Marine covers damage to ships and goods in transit, marine liability lines as well as yacht-owner perils. Energy covers offshore energy industry insurance.

Mortgage – covers credit risks that compensates insureds for losses arising from mortgage loan defaults.

Property – consists of the Company’s underwriting lines of business that offer property catastrophe excess reinsurance, agriculture reinsurance and property risk and pro rata on a worldwide basis. Property catastrophe excess of loss reinsurance treaties cover losses from catastrophic events. Agriculture provides stop-loss reinsurance coverage, including to companies writing U.S. government-sponsored multi-peril crop insurance.

Insurance & Services

The Company provides insurance products to individuals and corporations directly, through agents/brokers or through delegated underwriting agreements with managing general agents (“MGAs”). The Company seeks to work with MGAs that have strong underwriting expertise, deep understanding of the customer/product niches and/or technology-driven approaches, and a sustainable competitive moat.

Insurance & Services offers a comprehensive set of services for startup MGAs and insurance services companies including fronting services, risk capital and equity and debt financing. Furthermore, the Company offers expertise in underwriting, pricing and product development to businesses it partners with. The Company has a stringent screening process to identify and approve partner companies which includes alignment of interests, disciplined management and strong oversight, which are believed to be critical for success. The Insurance & Services segment predominantly provides insurance coverage in addition to receiving fees for services provided within Insurance & Services and to third parties.

The Company makes both controlling and non-controlling equity investments and debt investments in MGAs and other insurance-related business (collectively, “Strategic Investments”).

The Insurance & Services segment provides coverage in the following product lines:

Accident and Health (“A&H”) – consists of accident and health coverage, and MGA units (which include ArmadaCorp Capital, LLC (“Armada”) and International Medical Group, Inc. (“IMG”)). Armada’s products are offered in the United States while IMG offers accident, health and travel products on a worldwide basis.

Environmental – consists of an environmental insurance book in the U.S. comprised of 4 core products that revolve around pollution coverage, which are premises pollution liability, contractor's pollution/pollution liability and professional liability.

Workers’ Compensation – consists of state-mandated insurance coverage that provides medical, disability, survivor, burial, and rehabilitation benefits to employees who are injured or killed due to a work-related injury or illness.

Other – consists of a cross section of property and casualty lines, including but not limited to property, general liability, excess liability, commercial auto, professional liability, directors and officers, cyber and other specialty classes.

Management uses segment income (loss) as the primary basis for assessing segment performance. Segment income (loss) is comprised of two components, underwriting income (loss) and net services income (loss). The Company calculates underwriting income (loss) by subtracting loss and loss adjustment expenses incurred, net, acquisition costs, net, and other underwriting expenses from net premiums earned. Net services income (loss) consists of services revenues (fee for service revenues), services expenses, services non-controlling (income) loss and net investment gains (losses) from Strategic Investments. This definition of segment income (loss) aligns with how business performance is managed and monitored. We continue to evaluate our segments as our business evolves and may further refine our segments and segment income (loss) measures. Certain items are presented in a different manner for segment reporting purposes than in the consolidated statements of income (loss). These items are reconciled to the consolidated presentation in the segment measure reclass column below and include net investment gains (losses) from Strategic Investments where Insurance & Services holds private equity investments. Also included in Insurance & Services segment income (loss) are services noncontrolling loss (income) attributable to minority shareholders on non-wholly-owned subsidiaries. In addition, services revenues and services expenses are reconciled to other revenues and net corporate and other expenses, respectively.

Segment results are shown prior to corporate eliminations. Corporate eliminations are included in the elimination column below as necessary to reconcile to underwriting income (loss), net services income (loss), and segment income (loss) to the consolidated statements of income (loss).

Corporate includes the results of all runoff business, which represent certain classes of business that the Company no longer actively underwrites, including those that have asbestos and environmental and other latent liability exposures and certain reinsurance contracts that have interest crediting features. In addition, revenue and expenses managed at the corporate level, including realized gains and losses (excluding net investment gains (losses) from Strategic Investments, which are allocated to the segment results), net realized and unrealized investment gains (losses) from related party investment funds, other investment income, non-services-related other revenues, non-services-related net corporate and other expenses, intangible asset amortization, interest expense, foreign exchange (gains) losses and income tax (expense) benefit are reported within Corporate. The CEO does not manage segment results or allocate resources to segments when considering these items and they are therefore excluded from our definition of segment income (loss).

The following is a summary of the Company’s operating segment results for the three and six months ended June 30, 2022 and 2021:

	Three months ended June 30, 2022
	Reinsurance			Insurance & Services			Core			Eliminations (2)		Corporate		Segment Measure Reclass		Total
Gross premiums written	$	378.3		$	433.9		$	812.2		$	—	$	0.4	$	—	$	812.6
Net premiums written	321.5			301.4			622.9			—		0.1		—		623.0
Net premiums earned	319.5			244.3			563.8			—		5.0		—		568.8
Loss and loss adjustment expenses incurred, net	204.7			154.8			359.5			(1.1)		1.9		—		360.3
Acquisition costs, net	86.3			63.9			150.2			(26.8)		0.2		—		123.6
Other underwriting expenses	28.7			15.8			44.5			—		1.6		—		46.1
Underwriting income (loss)	(0.2)			9.8			9.6			27.9		1.3		—		38.8
Services revenue	—			56.6			56.6			(36.7)		—		(19.9)		—
Services expenses	—			44.8			44.8			—		—		(44.8)		—
Net services fee income	—			11.8			11.8			(36.7)		—		24.9		—
Services noncontrolling income	—			(0.7)			(0.7)			—		—		0.7		—
Net investment losses from Strategic Investments	—			(0.5)			(0.5)			—		—		0.5		—
Net services income	—			10.6			10.6			(36.7)		—		26.1		—
Segment income (loss)	(0.2)			20.4			20.2			(8.8)		1.3		26.1		38.8
Net realized and unrealized investment losses												(97.9)		(0.5)		(98.4)
Net realized and unrealized investment losses from related party investment funds												(60.5)		—		(60.5)
Net investment income												17.4		—		17.4
Other revenues												25.9		19.9		45.8
Net corporate and other expenses												(27.2)		(44.8)		(72.0)
Intangible asset amortization												(2.0)		—		(2.0)
Interest expense												(9.4)		—		(9.4)
Foreign exchange gains												56.5		—		56.5
Income (loss) before income tax benefit	$	(0.2)		$	20.4		20.2			(8.8)		(95.9)		0.7		(83.8)
Income tax benefit							—			—		27.7		—		27.7
Net income (loss)							20.2			(8.8)		(68.2)		0.7		(56.1)
Net income attributable to noncontrolling interest							—			—		—		(0.7)		(0.7)
Net income (loss) available to SiriusPoint							$	20.2		$	(8.8)	$	(68.2)	$	—	$	(56.8)
Underwriting Ratios: (1)
Loss ratio	64.1		%	63.4		%	63.8		%							63.3		%
Acquisition cost ratio	27.0		%	26.2		%	26.6		%							21.7		%
Other underwriting expenses ratio	9.0		%	6.5		%	7.9		%							8.1		%
Combined ratio	100.1		%	96.1		%	98.3		%							93.1		%

(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.

(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.

	Three months ended June 30, 2021
	Reinsurance			Insurance & Services			Core			Eliminations (2)		Corporate		Segment Measure Reclass		Total
Gross premiums written	$	377.6		$	196.5		$	574.1		$	—	$	(25.4)	$	—	$	548.7
Net premiums written	322.7			145.0			467.7			—		(22.7)		—		445.0
Net premiums earned	336.6			131.4			468.0			—		(15.7)		—		452.3
Loss and loss adjustment expenses incurred, net	194.0			79.0			273.0			(0.7)		(21.4)		—		250.9
Acquisition costs, net	79.8			41.6			121.4			(15.4)		(0.4)		—		105.6
Other underwriting expenses	34.4			7.9			42.3			—		4.2		—		46.5
Underwriting income	28.4			2.9			31.3			16.1		1.9		—		49.3
Services revenue	—			33.9			33.9			(19.9)		—		(14.0)		—
Services expenses	—			30.0			30.0			—		—		(30.0)		—
Net services fee income	—			3.9			3.9			(19.9)		—		16.0		—
Services noncontrolling income	—			(1.6)			(1.6)			—		—		1.6		—
Net investment gains from Strategic Investments	0.4			6.1			6.5			—		—		(6.5)		—
Net services income	0.4			8.4			8.8			(19.9)		—		11.1		—
Segment income	28.8			11.3			40.1			(3.8)		1.9		11.1		49.3
Net realized and unrealized investment gains												17.4		6.5		23.9
Net realized and unrealized investment gains from related party investment funds												45.6		—		45.6
Net investment income												7.9		—		7.9
Other revenues												17.8		14.0		31.8
Net corporate and other expenses												(25.7)		(30.0)		(55.7)
Intangible asset amortization												(1.3)		—		(1.3)
Interest expense												(9.8)		—		(9.8)
Foreign exchange losses												(12.0)		—		(12.0)
Income before income tax expense	$	28.8		$	11.3		40.1			(3.8)		41.8		1.6		79.7
Income tax expense							—			—		(9.6)		—		(9.6)
Net income							40.1			(3.8)		32.2		1.6		70.1
Net income attributable to noncontrolling interest							—			—		—		(1.6)		(1.6)
Net income available to SiriusPoint							$	40.1		$	(3.8)	$	32.2	$	—	$	68.5
Underwriting Ratios: (1)
Loss ratio	57.6		%	60.1		%	58.3		%							55.5		%
Acquisition cost ratio	23.7		%	31.7		%	25.9		%							23.3		%
Other underwriting expenses ratio	10.2		%	6.0		%	9.0		%							10.3		%
Combined ratio	91.5		%	97.8		%	93.2		%							89.1		%

(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.

(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.

	Six months ended June 30, 2022
	Reinsurance			Insurance & Services			Core			Eliminations (2)		Corporate		Segment Measure Reclass		Total
Gross premiums written	$	902.5		$	917.4		$	1,819.9		$	—	$	2.4	$	—	$	1,822.3
Net premiums written	696.4			638.9			1,335.3			—		1.6		—		1,336.9
Net premiums earned	627.1			457.1			1,084.2			—		13.9		—		1,098.1
Loss and loss adjustment expenses incurred, net	399.2			288.8			688.0			(2.3)		14.7		—		700.4
Acquisition costs, net	166.2			117.4			283.6			(52.4)		0.9		—		232.1
Other underwriting expenses	58.8			31.5			90.3			—		3.0		—		93.3
Underwriting income (loss)	2.9			19.4			22.3			54.7		(4.7)		—		72.3
Services revenue	—			113.4			113.4			(67.5)		—		(45.9)		—
Services expenses	—			88.1			88.1			—		—		(88.1)		—
Net services fee income	—			25.3			25.3			(67.5)		—		42.2		—
Services noncontrolling loss	—			0.1			0.1			—		—		(0.1)		—
Net investment losses from Strategic Investments	—			(0.8)			(0.8)			—		—		0.8		—
Net services income	—			24.6			24.6			(67.5)		—		42.9		—
Segment income (loss)	2.9			44.0			46.9			(12.8)		(4.7)		42.9		72.3
Net realized and unrealized investment losses												(179.5)		(0.8)		(180.3)
Net realized and unrealized investment losses from related party investment funds												(191.5)		—		(191.5)
Net investment income												25.2		—		25.2
Other revenues												37.1		45.9		83.0
Net corporate and other expenses												(61.3)		(88.1)		(149.4)
Intangible asset amortization												(3.9)		—		(3.9)
Interest expense												(18.7)		—		(18.7)
Foreign exchange gains												75.9		—		75.9
Income (loss) before income tax benefit	$	2.9		$	44.0		46.9			(12.8)		(321.4)		(0.1)		(287.4)
Income tax benefit							—			—		18.0		—		18.0
Net income (loss)							46.9			(12.8)		(303.4)		(0.1)		(269.4)
Net income attributable to noncontrolling interests							—			—		(0.5)		0.1		(0.4)
Net income (loss) available to SiriusPoint							$	46.9		$	(12.8)	$	(303.9)	$	—	$	(269.8)
Underwriting Ratios: (1)
Loss ratio	63.7		%	63.2		%	63.5		%							63.8		%
Acquisition cost ratio	26.5		%	25.7		%	26.2		%							21.1		%
Other underwriting expenses ratio	9.4		%	6.9		%	8.3		%							8.5		%
Combined ratio	99.6		%	95.8		%	98.0		%							93.4		%

(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.

(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.

	Six months ended June 30, 2021
	Reinsurance			Insurance & Services			Core			Eliminations (2)		Corporate		Segment Measure Reclass		Total
Gross premiums written	$	536.3		$	387.4		$	923.7		$	—	$	(19.2)	$	—	$	904.5
Net premiums written	484.2			284.6			768.8			—		(24.3)		—		744.5
Net premiums earned	536.4			174.1			710.5			—		(13.0)		—		697.5
Loss and loss adjustment expenses incurred, net	302.2			107.6			409.8			(0.9)		(11.1)		—		397.8
Acquisition costs, net	138.7			55.8			194.5			(21.1)		1.2		—		174.6
Other underwriting expenses	50.5			9.2			59.7			—		7.6		—		67.3
Underwriting income (loss)	45.0			1.5			46.5			22.0		(10.7)		—		57.8
Services revenue	—			52.1			52.1			(27.3)		—		(24.8)		—
Services expenses	—			40.6			40.6			—		—		(40.6)		—
Net services fee income	—			11.5			11.5			(27.3)		—		15.8		—
Services noncontrolling income	—			(1.6)			(1.6)			—		—		1.6		—
Net investment gains from Strategic Investments	0.3			41.3			41.6			—		—		(41.6)		—
Net services income	0.3			51.2			51.5			(27.3)		—		(24.2)		—
Segment income (loss)	45.3			52.7			98.0			(5.3)		(10.7)		(24.2)		57.8
Net realized and unrealized investment gains												13.8		41.6		55.4
Net realized and unrealized investment gains from related party investment funds												198.8		—		198.8
Net investment income												9.7		—		9.7
Other revenues												63.9		24.8		88.7
Net corporate and other expenses												(94.0)		(40.6)		(134.6)
Intangible asset amortization												(2.1)		—		(2.1)
Interest expense												(14.7)		—		(14.7)
Foreign exchange gains												0.4		—		0.4
Income before income tax expense	$	45.3		$	52.7		98.0			(5.3)		165.1		1.6		259.4
Income tax expense							—			—		(19.4)		—		(19.4)
Net income							98.0			(5.3)		145.7		1.6		240.0
Net income attributable to noncontrolling interests							—			—		—		(1.6)		(1.6)
Net income available to SiriusPoint							$	98.0		$	(5.3)	$	145.7	$	—	$	238.4
Underwriting Ratios: (1)
Loss ratio	56.3		%	61.8		%	57.7		%							57.0		%
Acquisition cost ratio	25.9		%	32.1		%	27.4		%							25.0		%
Other underwriting expenses ratio	9.4		%	5.3		%	8.4		%							9.6		%
Combined ratio	91.6		%	99.2		%	93.5		%							91.6		%

(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.

(2)Insurance & Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.