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Quarterly financial results
9 Months Ended
Sep. 30, 2023
Accounting Changes and Error Corrections [Abstract]  
Quarterly financial results
19. Quarterly financial results
Revision of Q2 and Q1 2023 interim financial statements
In connection with the preparation of its third quarter 2023 financial statements, the Company identified certain immaterial errors in its previously issued 2023 interim financial statements, primarily relating to a manual calculation in our property catastrophe business, and also an overnight data transfer error. This resulted in the incorrect recognition of Net premiums earned. The Company performed an analysis in accordance with the guidance set forth in SEC Staff Bulletin 99, Materiality, and SEC Staff Accounting Bulletin 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements, and concluded that the errors were not material, both individually and in the aggregate, to any previously issued financial statements, and were not intentional. Although not required to do so, but in an effort to provide transparency and in line with good practice, Management has elected to revise the previously issued 2023 interim financial statements when they are next presented. The impacts on those financial statements of these future revisions are presented below. The financial statements for the three and nine months ended September 30, 2023 reflect the correction of these errors in the manner described above.
Notwithstanding, the consolidated financial statements included in this report on Form 10-Q fairly represent in all material respects the financial condition, results of operations and cash flows of the Company for the periods presented.
The impacts of the future revisions on the Company’s previously issued consolidated financial statements as of and for the periods indicated are as follows:
Three months ended June 30, 2023Three months ended March 31, 2023
As previously reportedRevisionAs revisedAs previously reportedRevisionAs revised
Revenues
Net premiums earned$703.8 $(64.1)$639.7 $595.5 $— $595.5 
Net realized and unrealized investment losses(1.8)— (1.8)11.3 — 11.3 
Net realized and unrealized investment losses from related party investment funds(0.9)— (0.9)0.8 — 0.8 
Net investment income68.5 — 68.5 61.7 — 61.7 
Net realized and unrealized investment losses and net investment income65.8 — 65.8 73.8 — 73.8 
Other revenues(1.7)7.0 5.3 15.8 (7.0)8.8 
Total revenues767.9 (57.1)710.8 685.1 (7.0)678.1 
Expenses
Loss and loss adjustment expenses incurred, net407.0 (31.3)375.7 267.1 — 267.1 
Acquisition costs, net126.2 (14.4)111.8 119.7 — 119.7 
Other underwriting expenses43.3 — 43.3 52.2 — 52.2 
Net corporate and other expenses70.3 — 70.3 60.0 — 60.0 
Intangible asset amortization2.9 — 2.9 2.4 — 2.4 
Interest expense11.7 — 11.7 12.8 — 12.8 
Foreign exchange gains17.4 — 17.4 0.1 — 0.1 
Total expenses678.8 (45.7)633.1 514.3 — 514.3 
Income before income tax expense89.1 (11.4)77.7 170.8 (7.0)163.8 
Income tax expense(16.8)1.0 (15.8)(25.8)0.3 (25.5)
Net income72.3 (10.4)61.9 145.0 (6.7)138.3 
Net income attributable to noncontrolling interests(2.0)— (2.0)(2.4)— (2.4)
Net income available to SiriusPoint70.3 (10.4)59.9 142.6 (6.7)135.9 
Dividends on Series B preference shares(4.0)— (4.0)(4.0)— (4.0)
Net income available to SiriusPoint common shareholders$66.3 $(10.4)$55.9 $138.6 $(6.7)$131.9 
Earnings per share available to SiriusPoint common shareholders
Basic earnings per share available to SiriusPoint common shareholders$0.38 $(0.06)$0.32 $0.80 $(0.04)$0.76 
Diluted earnings per share available to SiriusPoint common shareholders$0.37 $(0.06)$0.31 $0.78 $(0.04)$0.74 
Weighted average number of common shares used in the determination of earnings per share
Basic162,027,831 162,027,831 160,905,860 160,905,860 
Diluted166,708,932 166,708,932 164,130,946 164,130,946 
Six months ended June 30, 2023
As previously reportedRevisionAs revised
Revenues
Net premiums earned$1,299.3 $(64.1)$1,235.2 
Net realized and unrealized investment gains9.5 — 9.5 
Net realized and unrealized investment losses from related party investment funds(0.1)— (0.1)
Net investment income130.2 — 130.2 
Net realized and unrealized investment gains (losses) and net investment income139.6 — 139.6 
Other revenues14.1 — 14.1 
Total revenues1,453.0 (64.1)1,388.9 
Expenses
Loss and loss adjustment expenses incurred, net674.1 (31.3)642.8 
Acquisition costs, net245.9 (14.4)231.5 
Other underwriting expenses95.5 — 95.5 
Net corporate and other expenses130.3 — 130.3 
Intangible asset amortization5.3 — 5.3 
Interest expense24.5 — 24.5 
Foreign exchange gains17.5 — 17.5 
Total expenses1,193.1 (45.7)1,147.4 
Income before income tax (expense) benefit259.9 (18.4)241.5 
Income tax expense(42.6)1.3 (41.3)
Net income217.3 (17.1)200.2 
Net income attributable to noncontrolling interests(4.4)— (4.4)
Net income available to SiriusPoint212.9 (17.1)195.8 
Dividends on Series B preference shares(8.0)— (8.0)
Net income available to SiriusPoint common shareholders$204.9 $(17.1)$187.8 
Earnings per share available to SiriusPoint common shareholders
Basic earnings per share available to SiriusPoint common shareholders$1.18 $(0.10)$1.08 
Diluted earnings per share available to SiriusPoint common shareholders$1.14 $(0.09)$1.05 
Weighted average number of common shares used in the determination of earnings per share
Basic161,473,011 161,473,011 
Diluted165,997,198 165,997,198 
The following tables provide a summary of the corrections to the impacted financial statement line items on the Company’s consolidated balance sheet, consolidated statement of comprehensive income, and consolidated statement of cash flows.
Condensed consolidated balance sheet
June 30, 2023
As previously reportedRevisionAs revised
Insurance and reinsurance balances receivable, net$2,252.1 $(32.5)$2,219.6 
Deferred acquisition costs, net340.3 2.3 342.6 
Unearned premiums ceded481.3 3.5 484.8 
Loss and loss adjustment expenses recoverable, net2,276.7 (0.1)2,276.6 
Deferred tax assets164.3 (0.4)163.9 
Total assets12,622.8 (27.2)12,595.6 
Loss and loss adjustment expense reserves5,338.8 (31.4)5,307.4 
Unearned premium reserves1,819.2 23.0 1,842.2 
Total liabilities10,355.1 (8.4)10,346.7 
Retained earnings467.1 (17.1)450.0 
Accumulated other comprehensive loss, net of tax(74.2)(1.7)(75.9)
Total shareholders’ equity$2,267.7 $(18.8)$2,248.9 
March 31, 2023
As previously reportedRevisionAs revised
Deferred tax assets$175.7 $0.3 $176.0 
Total assets11,807.2 0.3 11,807.5 
Accounts payable, accrued expenses and other liabilities275.7 7.0 282.7 
Total liabilities9,559.2 7.0 9,566.2 
Retained earnings400.8 (6.7)394.1 
Total shareholders’ equity$2,248.0 $(6.7)$2,241.3 
Condensed consolidated statement of comprehensive income
Three months ended June 30, 2023Six months ended June 30, 2023
As previously reportedRevisionAs revisedAs previously reportedRevisionAs revised
Net income$72.3 $(10.4)$61.9 $217.3 $(17.1)$200.2 
Unrealized losses from debt securities held as available for sale investments(54.9)(1.7)(56.6)(32.0)(1.7)(33.7)
Comprehensive income available to SiriusPoint$19.1 $(12.1)$7.0 $183.7 $(18.8)$164.9 
Condensed consolidated statement of cash flows
Six months ended June 30, 2023
As previously reportedRevisionAs revised
Net income$217.3 $(17.1)$200.2 
Net realized and unrealized loss on investments and derivatives(12.6)(1.7)(14.3)
Insurance and reinsurance balances receivable, net(370.4)32.5 (337.9)
Deferred acquisition costs, net(45.4)(2.3)(47.7)
Unearned premiums ceded(132.5)(3.5)(136.0)
Loss and loss adjustment expenses recoverable, net(900.5)0.1 (900.4)
Deferred tax asset/ liability37.2 0.4 37.6 
Loss and loss adjustment expense reserves70.1 (31.4)38.7 
Unearned premium reserves298.1 23.0 321.1 
Net cash provided by operating activities$206.3 $— $206.3 
Three months ended March 31, 2023
As previously reportedRevisionAs revised
Net income$145.0 $(6.7)$138.3 
Deferred tax asset/ liability24.2 (0.3)23.9 
Accounts payable, accrued expenses and other liabilities3.9 7.0 10.9 
Net cash provided by operating activities$94.2 $— $94.2 
Revised operating segment results for the three and six months ended June 30, 2023 are as follows:
Three months ended June 30, 2023
As revised
ReinsuranceInsurance & ServicesCore
Eliminations (2)
CorporateSegment Measure ReclassTotal
Gross premiums written
$357.7 $447.5 $805.2 $— $37.3 $— $842.5 
Net premiums written 311.9 276.4 588.3 — 37.3 — 625.6 
Net premiums earned271.8 324.4 596.2 — 43.5 — 639.7 
Loss and loss adjustment expenses incurred, net 146.7 216.7 363.4 (1.5)13.8 — 375.7 
Acquisition costs, net51.3 80.7 132.0 (35.9)15.7 — 111.8 
Other underwriting expenses 12.0 25.5 37.5 — 5.8 — 43.3 
Underwriting income61.8 1.5 63.3 37.4 8.2 — 108.9 
Services revenues(2.8)62.2 59.4 (36.9)— (22.5)— 
Services expenses— 50.0 50.0 — — (50.0)— 
Net services fee income (loss)(2.8)12.2 9.4 (36.9)— 27.5 — 
Services noncontrolling income— (1.7)(1.7)— — 1.7 — 
Net services income (loss)(2.8)10.5 7.7 (36.9)— 29.2 — 
Segment income59.0 12.0 71.0 0.5 8.2 29.2 108.9 
Net realized and unrealized investment losses(1.8)— (1.8)
Net realized and unrealized investment losses from related party investment funds(0.9)— (0.9)
Net investment income68.5 — 68.5 
Other revenues(17.2)22.5 5.3 
Net corporate and other expenses(20.3)(50.0)(70.3)
Intangible asset amortization(2.9)— (2.9)
Interest expense(11.7)— (11.7)
Foreign exchange losses(17.4)— (17.4)
Income before income tax expense$59.0 $12.0 71.0 0.5 4.5 1.7 77.7 
Income tax expense— — (15.8)— (15.8)
Net income (loss)71.0 0.5 (11.3)1.7 61.9 
Net income attributable to noncontrolling interest— — (0.3)(1.7)(2.0)
Net income (loss) available to SiriusPoint$71.0 $0.5 $(11.6)$— $59.9 
Underwriting Ratios: (1)
Loss ratio54.0 %66.8 %61.0 %58.7 %
Acquisition cost ratio18.9 %24.9 %22.1 %17.5 %
Other underwriting expenses ratio4.4 %7.9 %6.3 %6.8 %
Combined ratio
77.3 %99.6 %89.4 %83.0 %
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned. Prior to the revision, the reported Core and consolidated combined ratios were 87.7% and 81.9%, respectively.
(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, 2023
As revised
ReinsuranceInsurance & ServicesCore
Eliminations (2)
CorporateSegment Measure ReclassTotal
Gross premiums written
$753.9 $1,111.5 $1,865.4 $— $87.6 $— $1,953.0 
Net premiums written 622.9 729.0 1,351.9 — 65.4 — 1,417.3 
Net premiums earned531.3 615.6 1,146.9 — 88.3 — 1,235.2 
Loss and loss adjustment expenses incurred, net 232.3 389.2 621.5 (2.8)24.1 — 642.8 
Acquisition costs, net117.3 152.4 269.7 (68.4)30.2 — 231.5 
Other underwriting expenses 40.2 44.8 85.0 — 10.5 — 95.5 
Underwriting income141.5 29.2 170.7 71.2 23.5 — 265.4 
Services revenues(2.6)125.8 123.2 (71.3)— (51.9)— 
Services expenses— 95.5 95.5 — — (95.5)— 
Net services fee income (loss)(2.6)30.3 27.7 (71.3)— 43.6 — 
Services noncontrolling income— (3.3)(3.3)— — 3.3 — 
Net services income (loss)(2.6)27.0 24.4 (71.3)— 46.9 — 
Segment income138.9 56.2 195.1 (0.1)23.5 46.9 265.4 
Net realized and unrealized investment gains9.5 — 9.5 
Net realized and unrealized investment losses from related party investment funds(0.1)— (0.1)
Net investment income130.2 — 130.2 
Other revenues(37.8)51.9 14.1 
Net corporate and other expenses(34.8)(95.5)(130.3)
Intangible asset amortization(5.3)— (5.3)
Interest expense(24.5)— (24.5)
Foreign exchange losses(17.5)— (17.5)
Income before income tax expense$138.9 $56.2 195.1 (0.1)43.2 3.3 241.5 
Income tax expense— — (41.3)— (41.3)
Net income195.1 (0.1)1.9 3.3 200.2 
Net income attributable to noncontrolling interest— — (1.1)(3.3)(4.4)
Net income available to SiriusPoint$195.1 $(0.1)$0.8 $— $195.8 
Underwriting Ratios: (1)
Loss ratio43.7 %63.2 %54.2 %52.0 %
Acquisition cost ratio22.1 %24.8 %23.5 %18.7 %
Other underwriting expenses ratio7.6 %7.3 %7.4 %7.7 %
Combined ratio73.4 %95.3 %85.1 %78.4 %
(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned. Prior to the revision, the reported Core and consolidated combined ratios were 84.4% and 78.2%, respectively.
(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.