10-Q

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TABLE OF CONTENTS

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q

ý QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2019

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-38731

SIRIUS INTERNATIONAL INSURANCE GROUP, LTD.
(Exact name of registrant as specified in its charter)

Bermuda
(State or other jurisdiction of incorporation or organization)

98-0529995
(I.R.S. Employer Identification No.)

14 Wesley Street, Hamilton HM 11, Bermuda
(Address of principal executive offices)

(441) 278-3140
(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes o    No ý

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer ý Smaller reporting company ý Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o    No ý

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading symbol	Name of each exchange on which registered
Common shares, par value $0.01 per share	SG	Nasdaq Global Select Market

At April 30, 2019, there were 115,262,303 Common Shares, $0.01 par value per share, of the registrant outstanding.

SIRIUS INTERNATIONAL INSURANCE GROUP, LTD.

INDEX TO FORM 10-Q

		Page
Part I	Financial Information
	Cautionary Note Regarding Forward-Looking Statements		3
Item 1.	Unaudited Consolidated Financial Statements
	Consolidated Balance Sheets at March 31, 2019 and December 31, 2018		5
	Consolidated Statements of Income for the three months ended March 31, 2019 and 2018		6
	Consolidated Statements of Comprehensive Income for the three months ended March 31, 2019 and 2018		7
	Consolidated Statements of Shareholders' Equity for the three months ended March 31, 2019 and 2018		8
	Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018		9
	Notes to Consolidated Financial Statements		10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations		46
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		71
Item 4.	Controls and Procedures		72
Part II	Other Information
Item 1.	Legal Proceedings		73
Item 1A.	Risk Factors		74
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		77
Item 3.	Defaults Upon Senior Securities		78
Item 4.	Mine Safety Disclosures		79
Item 5.	Other Information		80
Item 6.	Exhibits		81
	Signatures

2

PART I. FINANCIAL INFORMATION

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements about the future financial condition, results of operations and operating activities of Sirius International Insurance Group, Ltd. (the "Company" and, together with its subsidiaries, "Sirius Group"). Forward-looking statements are typically identified by words 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 the Company and speak only as of the date of this Quarterly Report on Form 10-Q. 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, the following:

•

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 the Company'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;

•

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;

•

CMIG International Holding Pte. Ltd.'s status as a controlling shareholder;

•

the limited liquidity and trading of the Company's securities;

•

Sirius Group's status as a publicly traded company, foreign private issuer and controlled company; and

3

•

risks identified in elsewhere in this Quarterly Report on Form 10-Q, the Company's Annual Report on Form 10-K for the year ended December 31, 2018 and in the Company's 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 the Company prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. Except to the extent required by applicable law or regulation, Sirius Group undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q.

4

Sirius International Insurance Group, Ltd.
Consolidated Balance Sheets
As at March 31, 2019 and December 31, 2018

(Expressed in millions of U.S. dollars, except share information)		March 31, 2019			December 31, 2018
	Unaudited
Assets
Fixed maturity investments, trading, at fair value (Amortized cost 2019: $1,814.8; 2018: $1,952.9)	$	1,846.4		$	1,949.2
Short-term investments, at fair value (Amortized cost 2019: $830.5; 2018: $716.1)		833.6			715.5
Equity securities, trading, at fair value (Cost 2019: $398.4; 2018: $409.4)		394.4			380.0
Other long-term investments, at fair value (Cost 2019: $351.7; 2018: $337.6)		389.7			365.0
Cash		116.0			119.4
Restricted cash		13.0			12.8
Total investments and cash		3,593.1			3,541.9
Accrued investment income		12.7			14.1
Insurance and reinsurance premiums receivable		818.7			630.6
Reinsurance recoverable on unpaid losses		349.3			350.2
Reinsurance recoverable on paid losses		50.5			55.0
Funds held by ceding companies		202.8			186.8
Ceded unearned insurance and reinsurance premiums		200.5			159.8
Deferred acquisition costs		152.6			141.6
Deferred tax asset		171.6			202.5
Accounts receivable on unsettled investment sales		1.7			5.0
Goodwill		400.7			400.6
Intangible assets		191.7			195.6
Other assets		161.1			124.0
Total assets	$	6,307.0		$	6,007.7
Liabilities
Loss and loss adjustment expense reserves	$	1,976.3		$	2,016.7
Unearned insurance and reinsurance premiums		860.5			647.2
Ceded reinsurance payable		231.3			206.9
Funds held under reinsurance treaties		123.4			110.6
Deferred tax liability		230.6			237.4
Debt		686.1			696.8
Accounts payable on unsettled investment purchases		9.9			3.2
Other liabilities		173.1			150.5
Total liabilities		4,291.2			4,069.3
Commitments and contingencies (see Note 18)
Mezzanine equity
Series B preference shares		240.6			232.2
Common shareholders' equity
Common shares (shares issued and outstanding, 2019: 115,262,303; 2018: 115,151,251)		1.2			1.2
Additional paid-in surplus		1,090.2			1,089.1
Retained earnings		911.8			816.6
Accumulated other comprehensive (loss)		(230.2	)		(202.4	)
Total common shareholders' equity		1,773.0			1,704.5
Non-controlling interests		2.2			1.7
Total equity		1,775.2			1,706.2
Total liabilities, mezzanine equity, and equity	$	6,307.0		$	6,007.7

See Notes to Consolidated Financial Statements

5

Sirius International Insurance Group, Ltd.
Consolidated Statements of Income
For the three months ended March 31, 2019 and 2018
Unaudited

		Three months ended March 31,
(Expressed in millions of U.S. dollars, except share and per share information)		2019			2018
Revenues
Net earned insurance and reinsurance premiums	$	311.9		$	284.5
Net investment income		20.1			10.8
Net realized investment gains (losses)		9.0			(3.7	)
Net unrealized investment gains		74.0			16.0
Net foreign exchange gains (losses)		5.1			(3.5	)
Other revenue		19.6			23.4
Total revenues		439.7			327.5
Expenses
Loss and loss adjustment expenses		183.9			141.0
Insurance and reinsurance acquisition expenses		63.3			63.0
Other underwriting expenses		35.3			43.2
General and administrative expenses		24.4			14.3
Intangible asset amortization expenses		3.9			3.9
Interest expense on debt		7.6			7.7
Total expenses		318.4			273.1
Pre-tax income		121.3			54.4
Income tax (expense)		(17.2	)		(11.1	)
Net income		104.1			43.3
Less: income attributable to non-controlling interests		(0.4	)		(0.2	)
Net income attributable to Sirius Group		103.7			43.1
Change in carrying value of Series B preference shares		(8.4	)		-
Accrued dividends on Series A redeemable preference shares		-			(2.6	)
Net income attributable to Sirius Group's common shareholders	$	95.3		$	40.5
Net income per common share and common share equivalent
Basic earnings per common share and common share equivalent	$	0.75		$	0.32
Diluted earnings per common share and common share equivalent	$	0.74		$	0.32
Weighted average number of common shares and common share equivalents outstanding
Basic weighted average number of common shares and common share equivalents outstanding		115,182,331			120,000,000
Diluted weighted average number of common shares and common share equivalents outstanding		127,335,314			120,000,000

See Notes to Consolidated Financial Statements

6

Sirius International Insurance Group, Ltd.
Consolidated Statements of Comprehensive Income
For the three months ended March 31, 2019 and 2018
Unaudited

		Three months ended March 31,
(Expressed in millions of U.S. dollars)		2019			2018
Comprehensive income
Net income	$	104.1		$	43.3
Other comprehensive (loss)
Change in foreign currency translation, net of tax		(27.8	)		(13.4	)
Total other comprehensive (loss)		(27.8	)		(13.4	)
Comprehensive income		76.3			29.9
Net (income) attributable to non-controlling interests		(0.4	)		(0.2	)
Comprehensive income attributable to Sirius Group	$	75.9		$	29.7

See Notes to Consolidated Financial Statements

7

Sirius International Insurance Group, Ltd.
Consolidated Statements of Shareholders' Equity
For the three months ended March 31, 2019 and 2018
Unaudited

		Three months ended March 31,
(Expressed in millions of U.S. dollars)		2019			2018
Common shares
Balance at beginning and end of period	$	1.2		$	1.2
Additional paid-in surplus
Balance at beginning of period		1,089.1			1,197.9
Share-based compensation		1.2			-
Capital contribution from former parent		-			1.4
Other, net		(0.1	)		-
Balance at end of period		1,090.2			1,199.3
Retained earnings
Balance at beginning of period		816.6			858.4
Cumulative effect of an accounting change		-			1.6
Balance at beginning of period, as adjusted		816.6			860.0
Net income		104.1			43.3
Income attributable to non-controlling interests		(0.4	)		(0.2	)
Change in carrying value of Series B preference shares		(8.4	)		-
Accrued dividends on Series A redeemable preference shares		-			(2.6	)
Other, net		(0.1	)		(0.1	)
Balance at end of period		911.8			900.4
Accumulated other comprehensive (loss)
Balance at beginning of period		(202.4	)		(140.5	)
Accumulated net foreign currency translation (losses)
Balance at beginning of period		(202.4	)		(140.5	)
Net change in foreign currency translation		(27.8	)		(13.4	)
Balance at the end of period		(230.2	)		(153.9	)
Balance at the end of period		(230.2	)		(153.9	)
Total common shareholders' equity	$	1,773.0		$	1,947.0
Non-controlling interests		2.2			0.5
Total equity	$	1,775.2		$	1,947.5

See Notes to Consolidated Financial Statements

8

Sirius International Insurance Group, Ltd.
Consolidated Statements of Cash Flows
For the three months ended March 31, 2019 and 2018
Unaudited

		Three months ended March 31,
(Expressed in millions of U.S. dollars)		2019			2018
Cash flows from operations:
Net income	$	104.1		$	43.3
Adjustments to reconcile net income to net cash provided from operations:
Net realized and unrealized investment gains (losses)		(83.0	)		(12.3	)
Amortization of premium on fixed maturity investments		(0.8	)		4.4
Amortization of intangible assets		3.9			3.9
Depreciation and other amortization		2.2			2.5
Share-based compensation		1.2			-
Other operating items:
Net change in loss and loss adjustment expense reserves		(1.1	)		(4.2	)
Net change in reinsurance recoverable on paid and unpaid losses		(8.7	)		(17.8	)
Net change in funds held by ceding companies		(20.1	)		(12.2	)
Net change in unearned insurance and reinsurance premiums		232.4			271.8
Net change in ceded reinsurance payable		37.7			47.6
Net change in ceded unearned insurance and reinsurance premiums		(47.6	)		(71.6	)
Net change in insurance and reinsurance premiums receivable		(208.8	)		(192.2	)
Net change in deferred acquisition costs		(14.2	)		(31.8	)
Net change in funds held under reinsurance treaties		15.4			10.4
Net change in current and deferred income taxes, net		9.1			2.2
Net change in other assets and liabilities, net		2.9			(21.6	)
Net cash provided from operations		24.6			22.4
Cash flows from investing activities:
Net change in short-term investments		(120.1	)		(180.0	)
Sales of fixed maturities and convertible fixed maturity investments		135.1			566.2
Maturities, calls, and paydowns of fixed maturity and convertible fixed maturity investments		59.3			24.0
Sales of common equity securities		45.9			111.7
Distributions and redemptions of other long-term investments		15.3			52.4
Contributions to other long-term investments		(25.0	)		(64.4	)
Purchases of common equity securities		(39.8	)		(179.8	)
Purchases of fixed maturities and convertible fixed maturity investments		(105.1	)		(486.8	)
Net change in unsettled investment purchases and sales		10.0			97.2
Other, net		0.3			(0.9	)
Net cash (used for) investing activities		(24.1	)		(60.4	)
Cash flows from financing activities:
Change in collateral held on Interest Rate Cap		(0.1	)		-
Capital contribution from former parent		-			1.4
Net cash (used for) provided from financing activities		(0.1	)		1.4
Effect of exchange rate changes on cash		(3.6	)		(2.5	)
Net (decrease) in cash during period		(3.2	)		(39.1	)
Cash and restricted cash balance at beginning of period		132.2			230.6
Cash and restricted cash balance at end of period	$	129.0		$	191.5

See Notes to Consolidated Financial Statements

9

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Note 1. General

Sirius International Insurance Group, Ltd. (the "Company") is a Bermuda exempted company whose principal businesses are conducted through its wholly- and majority-owned insurance subsidiaries (collectively with the Company, "Sirius Group"). Sirius Group provides insurance, reinsurance, and insurance services on a worldwide basis.

Note 2. Summary of significant accounting policies

Basis of presentation

The accompanying Unaudited Consolidated Financial Statements at March 31, 2019, have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for interim financial information. The accompanying Unaudited Consolidated Financial Statements present the consolidated results of operations, financial condition, and cash flows of the Company and its subsidiaries and those entities in which the Company has control and a majority economic interest as well as those variable interest entities ("VIEs") that meet the requirements for consolidation. All intercompany transactions have been eliminated in consolidation.

These Unaudited Consolidated Financial Statements do not include all disclosures normally included in annual financial statements prepared in accordance with GAAP and should be read in conjunction with the Audited Consolidated Financial Statements and the related notes for the year ended December 31, 2018. The consolidated financial information as of December 31, 2018 included herein has been derived from the Audited Consolidated Financial Statements as of December 31, 2018.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying Unaudited Consolidated Financial Statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. Tabular dollar amounts are in millions, with the exception of share and per share amounts. All amounts are reported in U.S. dollars, except where noted otherwise.

Recently adopted changes in accounting principles

Leases

Effective January 1, 2019, Sirius Group adopted Accounting Standards Update ("ASU") 2016-02, Leases (Accounting Standards Codification ("ASC") 842) which requires lessees to recognize lease assets and liabilities on the balance sheet for both operating and financing leases, with the exception of leases with an original term of 12 months or less. Under previous guidance, recognition of lease assets and liabilities was not required for operating leases. The new guidance requires that lease assets and liabilities to be recognized and measured initially based on the present value of the lease payments. Sirius Group adopted the new guidance using the simplified transition option that allows companies to apply the new lease standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Sirius Group also made the following elections:

•

Sirius Group elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases upon transition.

•

Sirius Group did not elect the hindsight practical expedient upon transition, for all leases.

•

Sirius Group elected the short-term lease measurement and recognition exemption, resulting in lease payments being recorded as an expense on a straight-line basis over the lease term.

10

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

•

Sirius Group elected to include both lease and non-lease components as a single component for all leases.

•

Sirius Group did not elect the land easement practical expedient as it was not applicable.

As a result of the adoption of the new guidance, Sirius Group recognized a lease liability of $36.8 million, which represents the present value of our remaining lease payments and a right-of-use asset of $34.4 million as of January 1, 2019. The adoption of this guidance did not materially impact our results of operations or cash flows. Due to the adoption of the standard using the retrospective cumulative-effect adjustment method, there are no changes to our previously reported results prior to January 1, 2019. Lease expense is not expected to change materially as a result of the adoption of the new guidance. (See Note 18.)

Premium amortization on callable debt securities

Effective January 1, 2019, Sirius Group adopted ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities (ASC 310-20), which changes the amortization period for certain purchased callable debt securities. Under the new guidance, for investments in callable debt securities held at a premium, the premium will be amortized over the period to the earliest call date. The new guidance does not change the amortization period for callable debt securities held at a discount. The adoption of this guidance did not have significant effect on our financial statements.

Recent accounting pronouncements

Credit losses

In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (ASC 326), which establishes new guidance for the recognition of credit losses for financial assets measured at amortized cost. The new guidance, which applies to financial assets that have the contractual right to receive cash, including reinsurance receivables and recoverables, requires reporting entities to estimate the credit losses expected over the life of a credit exposure using historical information, current information and reasonable and supportable forecasts that affect the collectability of the financial asset. The new guidance is effective for annual and interim periods beginning after December 15, 2019. Sirius Group is evaluating the expected impact of this new guidance.

Note 3. Significant transactions

Easterly Acquisition Corp.

On November 5, 2018, the Company completed the transactions contemplated by the definitive Agreement and Plan of Merger ("Merger Agreement"). Under the terms of the Merger Agreement, Easterly Acquisition Corp. ("Easterly") merged with Sirius Acquisitions Holding Company III and became a wholly-owned subsidiary of the Company (the "Merger"). Upon the closing of the Merger, Easterly's common stock was exchanged for the Company's common shares at an exchange ratio (the "Exchange Ratio") calculated as (i) the amount of cash per public share of Easterly common stock in Easterly's trust account (the "Trust Account") immediately prior to the closing of the Merger divided by (ii) (x) 1.05 multiplied by (y) Sirius Group's adjusted diluted book value per common share as of September 30, 2018 ("Sirius Group September 30 Adjusted DBVPS"). Based on the Sirius Group September 30 Adjusted DBVPS, estimated as of September 30, 2018, and funds in the Trust Account on November 5, 2018, the Exchange Ratio was equal to 0.609. Following the Merger, the Company's common shares are traded on the Nasdaq Global Select Market under the symbol "SG."

Easterly held a special meeting of Easterly stockholders on November 2, 2018 to approve the completion of the transactions contemplated by the Merger Agreement. Easterly Acquisition Sponsor, LLC (the "Sponsor") and Easterly's other stockholders approved each of the proposals presented at the special meeting. After the special meeting, but prior to the consummation of the Merger, certain Easterly public stockholders exercised their redemption rights as provided for by Easterly's charter.

11

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

In total, out of the Trust Account balance of $149.0 million, there were $109.7 million of redemptions by Easterly public stockholders, which decreased the amount of cash in the Trust Account available for general corporate purposes following the Merger. After the redemption of shares held by Easterly's public stockholders, there was $39.3 million in the Trust Account. This resulted in the issuance of 2,280,241 common shares to Easterly public stockholders.

Pursuant to the letter agreement among Easterly, the Sponsor and the Company (the "Sponsor Letter"), the private placement warrants issued to the Sponsor at the closing of the Merger were cancelled. Pursuant to the Merger Agreement, each issued and outstanding public warrant was converted into a warrant exercisable for Company common shares. The number of Company common shares subject to converted warrants was equal to the number of shares of Easterly common stock subject to each Easterly warrant immediately prior to the closing of the Merger multiplied by the Exchange Ratio, and each converted warrant had an exercise price per Company common share equal to the exercise price per share of Easterly common stock subject to such Easterly warrant immediately prior to the closing of the Merger divided by the Exchange Ratio. This resulted in the issuance of 6,088,535 converted warrants.

Sirius Group Private Placement

In connection with the closing of the Merger, the Company completed a private placement of Series B preference shares, common shares, and warrants (the "Sirius Group Private Placement") at a price per share equal to (i) 1.05 multiplied by (ii) the Sirius Group September 30 Adjusted DBVPS, or $17.22447. Investors in the Sirius Group Private Placement included affiliated funds of Gallatin Point Capital, The Carlyle Group, Centerbridge Partners, L.P. and Bain Capital Credit (the "Preference Share Investors"), together with certain employees, directors and "friends & family. The Sirius Group Private Placement raised proceeds of $226.1 million, resulting in the purchase of:

•

11,901,670 Series B preference shares with a cost basis of $195.8 million,

•

1,225,954 of Common shares with a cost basis of $20.8 million,

•

5,418,434 warrants that are exercisable for common shares for a period of five years after the Merger at a strike price equal to 125% of the per share purchase price, or $21.53 with a cost basis of $9.6 million.

•

Issuance costs of $2.0 million

ESPP

In connection with the Merger, Sirius Group implemented the Employee Share Purchase Plan ("ESPP"), which provided all employees of Sirius Group with a one-time opportunity to purchase between 100 and 1,000 Company common shares at a price equal to 85% of market value for the first 100 shares and 100% of market value for the next 900 shares. For this purpose, market value of the Company common shares was equal to 1.05 times the Sirius Group September 30 Adjusted DBVPS. Employees had the option of paying for the shares upfront or, in the case of employees who are not executive officers, through a loan that is repaid over a two-year period through payroll deductions. Through the ESPP, 405 employees purchased 149,236 Company common shares prior to the consummation of the Merger, with a cost basis of $2.6 million.

Gross proceeds of the cash in the Easterly Trust Account assumed by Sirius Group upon the closing of the Merger, the Sirius Group Private Placement, and the ESPP sum to $268.0 million.

Common shares redemption agreement

In connection with the Merger, the Company and CM Bermuda Ltd. ("CM Bermuda"), the sole holder of the Company's common shares prior to the Merger, entered into a redemption agreement, dated November 2, 2018 (the "CM Bermuda Redemption Agreement"), pursuant to which, effective as of the closing of the Merger, the Company redeemed 9,519,280 of the Company's common shares at a price per share equal to $17.22447 for $164.0 million, which was paid on November 16, 2018.

12

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Also in connection with the Merger, on November 16, 2018 the Company completed a post-closing adjustment of $1.6 million that was settled in cash with CM Bermuda based on the reported book value per share of $16.44 as of September 30, 2018, pursuant to the Merger Agreement.

Sirius Group incurred certain contractual costs associated with the Merger of $9.0 million and $7.1 million of various legal, advisory, and other consulting costs for the Merger and the Private Placement that were charged to Additional paid-in surplus.

Series A preference shares redemption agreement

In connection with the Merger, the Company, IMG Acquisition Holdings, LLC ("IMGAH") and Sirius Acquisitions Holding Company II completed the transactions contemplated by its previously announced redemption agreement and the Company redeemed all of the outstanding Series A redeemable preference shares, which were held by IMGAH, for $95.0 million in cash. Effective as of the completion of the redemption, the parties terminated the registration rights agreement and the shareholder's agreement between the Company and IMGAH. In addition, the parties agreed that any remaining contingent consideration in respect of the IMG acquisition, will be paid in cash, not in Series A redeemable preference shares as previously contemplated in the agreement in respect of the IMG acquisition.

WRM America Indemnity Company, Inc.

On August 16, 2018, Sirius Group acquired 100% ownership of WRM America Indemnity Company, Inc. ("WRM America") from WRM America Indemnity Holding Company, LLC for $16.9 million in cash. WRM America is a New York-domiciled insurer with a run-off book of business mainly comprised of general liability, educator's legal liability, automobile liability and physical damage, property and excess catastrophe liability. As part of the purchase of WRM America, Sirius Group acquired $3.1 million of indefinite lived intangible assets related to insurance licenses.

Note 4. Segment information

Sirius Group classifies its business into four reportable segments – Global Property, Global A&H, Specialty & Casualty, and Runoff & Other. The accounting policies of the reportable segments are the same as those used for the preparation of the Company's consolidated financial statements.

The Company's Global Property, Global A&H, Specialty & Casualty, and Runoff & Other reportable segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company's chief operating decision maker, the Chief Executive Officer ("CEO") of the Company. The CEO assesses segment operating performance, allocates capital, and makes resource allocation decisions based on Technical profit (loss), Underwriting profit (loss), and Underwriting profit (loss), including net service fee revenue.

Segment results are shown prior to corporate eliminations. Corporate eliminations are shown to reconcile to consolidated Technical profit (loss), consolidated Underwriting profit (loss) and consolidated Underwriting profit (loss), including net service fee revenue.

Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets, and, accordingly, investment income is not allocated to each segment.

13

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Global Property

Global Property consists of Sirius Group's underwriting lines of business which offer other property insurance and reinsurance, property catastrophe excess reinsurance, and agriculture reinsurance on a worldwide basis:

Other Property—Sirius Group participates in the broker market for property reinsurance treaties written on a proportional and excess of loss basis. For Sirius Group'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. In the United States, the book predominantly centers on significant participations on proportional and excess of loss treaties mostly in the excess and surplus lines segment of the market.

Property Catastrophe Excess—Property catastrophe excess of loss reinsurance treaties cover losses from catastrophic events. Sirius Group writes a worldwide book with the largest concentration of exposure in Europe and the United States. The U.S. book written in Bermuda has a national account focus supporting principally the lower and/or middle layers of large capacity programs. Additionally, Stockholm writes a U.S. book mainly consisting of select small regional and standard lines carriers. The exposures written in the international book are diversified across many countries, regions, perils and layers.

Agriculture—Sirius Group provides stop-loss reinsurance coverage to companies writing U.S. government-sponsored multi-peril crop insurance ("MPCI"). Sirius Group's participation is net of the government's stop-loss reinsurance protection. Sirius Group also provides coverage for crop-hail and certain named perils when bundled with MPCI business. Sirius Group also writes agriculture business outside of the United States.

Global A&H

The Global A&H operating segment consists of Sirius Group's insurance, reinsurance, and managing general underwriting ("MGU") units (which include Armada and IMG) that offer accident and health products on a worldwide basis:

Accident and Health insurance and reinsurance—Sirius Group is an insurer of accident and health insurance business in the United States, either on an admitted or surplus lines basis, as well as international business written through wholly-owned IMG. Armada business is written on an admitted basis. Sirius Group also writes proportional and excess reinsurance treaties covering employer medical stop-loss for per person (specific) and per employer (aggregate) exposures. In addition, Sirius Group writes some medical, health, travel and personal accident coverages written on a treaty, facultative and primary basis.

Specialty & Casualty

Specialty & Casualty consists of Sirius Group's insurance and reinsurance underwriting units which offer specialty & casualty product lines on a worldwide basis. Specialty lines represent unique risks where the more difficult and unusual risks are underwritten. Because specialty lines tend to be the more unusual or higher risks, much of the market is characterized by a high degree of specialization:

Aviation & Space provides aviation insurance that covers loss of or damage to an aircraft and the aircraft operations' liability to passengers, cargo and hull as well as to third parties. Additionally, liability arising out of non-aircraft operations such as hangars, airports and aircraft products can be covered. Space insurance primarily covers loss of or damage to a satellite during launch and in orbit. The book consists of treaty, written on both a proportional and excess of loss basis, facultative, and primary business.

Marine provides marine reinsurance, primarily written on an excess of loss and proportional basis. Coverage offered includes damage to ships and goods in transit, marine liability lines, and offshore energy industry insurance. Sirius Group also writes yacht business, both on reinsurance and a primary basis. The marine portfolio is diversified across many countries and regions.

14

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Trade Credit writes credit and bond reinsurance worldwide. The bulk of the business is traditional short-term commercial credit insurance, covering pre-agreed domestic and export sales of goods and services with typical coverage periods of 60 to 120 days. Losses under these policies are correlated to adverse changes in a respective country's gross national product.

Contingency underwrites contingency insurance for event cancellation and non-appearance, primarily on a primary policy and facultative reinsurance basis. Additionally, coverage for liabilities arising from contractual bonus, prize redemption and over-redemption is also offered. The contingency portfolio is diversified across many countries and regions.

Casualty underwrites a cross section of all casualty lines, including general liability, umbrella, auto, workers compensation, professional liability, and other specialty classes, written on a proportional, excess of loss, and primary basis.

Surety underwrites commercial surety bonds, including non-construction contract bonds, in a broad range of business segments in the United States.

Environmental underwrites a pure environmental insurance book in the United States consisting of four core products that revolve around pollution coverage, which are premises pollution liability, contractor's pollution liability, contractor's pollution and professional liability.

Runoff & Other

Runoff & Other consists of asbestos risks, environmental risks and other long-tailed liability exposures, and underwriting results from Sirius Global Solutions Holding Company ("Sirius Global Solutions") and its subsidiaries. Sirius Global Solutions is a Connecticut-based division of Sirius Group specializing in the acquisition and management of runoff liabilities for insurance and reinsurance companies, both in the United States and internationally.

15

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

The following tables summarize the segment results for the three months ended March 31, 2019 and 2018:

		For the Three Months Ended March 31, 2019
(Millions)		Global Property			Global A&H			Specialty & Casualty			Runoff & Other			Corporate Elimination			Total
Gross written premiums	$	330.7		$	169.3		$	120.9		$	1.4		$	-		$	622.3
Net written premiums	$	241.3		$	134.9		$	108.2		$	0.4		$	-		$	484.8
Net earned insurance and reinsurance premiums	$	139.7		$	96.1		$	75.7		$	0.4		$	-		$	311.9
Loss and allocated LAE(1)		(62.6	)		(63.2	)		(47.6	)		(1.1	)		-			(174.5	)
Insurance and reinsurance acquisition expenses		(25.8	)		(26.6	)		(20.5	)		(0.7	)		10.3			(63.3	)
Technical profit (loss)		51.3			6.3			7.6			(1.4	)		10.3			74.1
Unallocated LAE(2)		(2.1	)		(1.5	)		(1.9	)		(0.5	)		(3.4	)		(9.4	)
Other underwriting expenses		(16.2	)		(6.1	)		(8.2	)		(2.1	)		(2.7	)		(35.3	)
Underwriting (loss) income		33.0			(1.3	)		(2.5	)		(4.0	)		4.2			29.4
Service fee revenue(3)		-			36.3			-			-			(11.0	)		25.3
Managing general underwriter unallocated LAE(4)		-			(4.1	)		-			-			4.1			-
Managing general underwriter other underwriting expenses(5)		-			(2.7	)		-			-			2.7			-
General and administrative expenses, MGU + Runoff & Other(6)		-			(16.2	)		-			(0.8	)		-			(17.0	)
Underwriting (loss) income, including net service fee income		33.0			12.0			(2.5	)		(4.8	)		-			37.7
Net investment income																	20.1
Net realized investment gains (losses)																	9.0
Net unrealized investment gains																	74.0
Net foreign exchange gains (losses)																	5.1
Other revenue(7)																	(5.7	)
General and administrative expenses(8)																	(7.4	)
Intangible asset amortization expenses																	(3.9	)
Interest expense on debt																	(7.6	)
Pre-tax income																$	121.3
Underwriting Ratios
Loss ratio		46.3	%		67.3	%		65.4	%		NM			NM			59.0	%
Acquisition expense ratio		18.5	%		27.7	%		27.1	%		NM			NM			20.3	%
Other underwriting expense ratio		11.6	%		6.3	%		10.8	%		NM			NM			11.3	%
Combined ratio(9)		76.4	%		101.3	%		103.3	%		NM			NM			90.6	%
Goodwill and intangible assets(10)	$	-		$	584.2		$	-		$	8.1		$	-		$	592.3

⁽¹⁾Loss and allocated loss adjustment expenses ("LAE") are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽²⁾Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽³⁾Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁴⁾Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other.

⁽⁵⁾Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process.

⁽⁶⁾General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁷⁾Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁸⁾General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁹⁾Ratios considered not meaningful ("NM") to Runoff & Other and Corporate Elimination.

⁽¹⁰⁾Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets.

16

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

		For the three months ended March 31, 2018
(Millions)		Global Property			Global A&H			Specialty & Casualty			Runoff & Other			Corporate Elimination			Total
Gross written premiums	$	346.6		$	145.6		$	115.5		$	7.5		$	-		$	615.2
Net written premiums	$	247.2		$	115.5		$	100.6		$	6.1		$	-		$	469.4
Net earned insurance and reinsurance premiums	$	136.1		$	88.0		$	54.4		$	6.0		$	-		$	284.5
Loss and allocated LAE(1)		(70.4	)		(45.8	)		(21.6	)		2.4			-			(135.4	)
Insurance and reinsurance acquisition expenses		(29.3	)		(29.2	)		(14.1	)		(0.7	)		10.3			(63.0	)
Technical profit		36.4			13.0			18.7			7.7			10.3			86.1
Unallocated LAE(2)		(1.9	)		(1.6	)		(1.2	)		(0.9	)		-			(5.6	)
Other underwriting expenses		(17.4	)		(8.0	)		(8.0	)		(1.4	)		(8.4	)		(43.2	)
Underwriting income		17.1			3.4			9.5			5.4			1.9			37.3
Service fee revenue(3)		-			32.8			-			-			(10.3	)		22.5
Managing general underwriter unallocated LAE(4)		-			-			-			-			-			-
Managing general underwriter other underwriting expenses(5)		-			(8.4	)		-			-			8.4			-
General and administrative expenses, MGU + Runoff & Other(6)		-			(9.5	)		-			(1.1	)		-			(10.6	)
Underwriting income (loss), including net service fee income		17.1			18.3			9.5			4.3			-			49.2
Net investment income																	10.8
Net realized investment gains (losses)																	(3.7	)
Net unrealized investment gains																	16.0
Net foreign exchange gains (losses)																	(3.5	)
Other revenue(7)																	0.9
General and administrative expenses(8)																	(3.7	)
Intangible asset amortization expenses																	(3.9	)
Interest expense on debt																	(7.7	)
Pre-tax income																$	54.4
Underwriting Ratios
Loss ratio		53.1	%		53.9	%		41.9	%		NM			NM			49.6	%
Acquisition expense ratio		21.5	%		33.2	%		25.9	%		NM			NM			22.1	%
Other underwriting expense ratio		12.8	%		9.1	%		14.7	%		NM			NM			15.2	%
Combined ratio(9)		87.4	%		96.2	%		82.5	%		NM			NM			86.9	%
Goodwill and intangible assets(10)	$	-		$	608.6		$	-		$	5.0		$	-		$	613.6

⁽¹⁾Loss and allocated loss adjustment expenses ("LAE") are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽²⁾Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽³⁾Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁴⁾Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other.

⁽⁵⁾Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process.

⁽⁶⁾General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁷⁾Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁸⁾General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁹⁾Ratios considered not meaningful ("NM") to Runoff & Other and Corporate Elimination.

⁽¹⁰⁾Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets.

17

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

The following tables provide summary information regarding net premiums written by client location and underwriting location by reportable segment for the three months ended March 31, 2019 and 2018:

		For the Three Months Ended March 31, 2019
(Millions)		Global Property		Global A&H		Specialty & Casualty		Runoff & Other		Total
Net written premiums by client location:
United States	$	61.9	$	111.1	$	68.4	$	0.2	$	241.6
Europe		124.8		8.0		24.8		0.1		157.7
Canada, the Caribbean, Bermuda and Latin America		24.5		5.0		4.4		-		33.9
Asia and Other		30.1		10.8		10.6		0.1		51.6
Total net written premium by client location	$	241.3	$	134.9	$	108.2	$	0.4	$	484.8
Net written premiums by underwriting location:
United States	$	8.0	$	40.3	$	12.4	$	0.2	$	60.9
Europe		154.6		63.6		54.6		0.1		272.9
Canada, the Caribbean, Bermuda and Latin America		62.4		30.7		40.2		-		133.3
Asia and Other		16.3		0.3		1.0		0.1		17.7
Total written premiums by underwriting location	$	241.3	$	134.9	$	108.2	$	0.4	$	484.8

		For the three months ended March 31, 2018
(Millions)		Global Property		Global A&H		Specialty & Casualty			Runoff & Other		Total
Net written premiums by client location:
United States	$	87.0	$	87.5	$	37.3		$	6.1	$	217.9
Europe		106.3		11.6		50.3			-		168.2
Canada, the Caribbean, Bermuda and Latin America		23.2		4.8		2.6			-		30.6
Asia and Other		30.7		11.6		10.4			-		52.7
Total net written premium by client location	$	247.2	$	115.5	$	100.6		$	6.1	$	469.4
Net written premiums by underwriting location:
United States	$	5.3	$	21.0	$	(0.1	)	$	6.1	$	32.3
Europe		136.5		68.6		72.0			-		277.1
Canada, the Caribbean, Bermuda and Latin America		89.8		25.7		27.5			-		143.0
Asia and Other		15.6		0.2		1.2			-		17.0
Total written premiums by underwriting location	$	247.2	$	115.5	$	100.6		$	6.1	$	469.4

18

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Note 5. Reserves for unpaid losses and loss adjustment expenses

The following table summarizes the loss and LAE reserve activities of Sirius Group for the three months ended March 31, 2019 and 2018:

		Three Months Ended March 31,
(Millions)		2019			2018
Gross beginning balance	$	2,016.7		$	1,898.5
Less beginning reinsurance recoverable on unpaid losses		(350.2	)		(319.7	)
Net loss and LAE reserve balance		1,666.5			1,578.8
Losses and LAE incurred relating to:
Current year losses		167.3			143.5
Prior years losses		16.6			(2.5	)
Total net incurred losses and LAE		183.9			141.0
Foreign currency translation adjustment to net loss and LAE reserves		(3.4	)		6.7
Loss and LAE paid relating to:
Current year losses		36.2			31.3
Prior years losses		183.8			147.1
Total loss and LAE payments		220.0			178.4
Net ending balance		1,627.0			1,548.1
Plus ending reinsurance recoverable on unpaid losses		349.3			327.8
Gross ending balance	$	1,976.3		$	1,875.9

Loss and LAE development - Three Months Ended March 31, 2019

For the three months ended March 31, 2019, Sirius Group had net unfavorable loss reserve development of $16.6 million. The most significant increases in loss reserve estimates were recorded in Global Property ($11.6 million) and Global A&H ($5.1 million). The unfavorable loss reserve development in Global Property was primarily attributable to higher than expected reporting from prior year catastrophe events ($15.6 million) mainly Hurricanes Irma, Michael, and Florence. Unfavorable loss reserve development in Runoff & Other ($1.2 million) was more than offset by favorable loss reserve development in Specialty & Casualty ($1.3 million).

Loss and LAE development - Three Months Ended March 31, 2018

For the three months ended March 31, 2018, Sirius Group had net favorable loss reserve development of $2.5 million. The major reductions in loss reserve estimates were recorded in Runoff & Other ($8.9 million), Specialty & Casualty ($7.1 million), and Global A&H ($3.7 million). Favorable loss reserve development for Runoff & Other included reduction in World Trade Center claims in response to revised information received by the Company. These reductions were partially offset by increases in Global Property loss reserve development of $17.2 million resulting from higher than expected reporting from recent accident years, including $6.4 million of increases from natural catastrophes, including the 2017 North American natural catastrophes. Also, in Other Property, there was loss deterioration from recent accident years reported in client account statements received in the first quarter, which accounted for the remainder of Global Property unfavorable loss development in the first quarter 2018.

19

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Note 6. Third party reinsurance

In the normal course of business, Sirius Group seeks to protect its businesses from losses due to concentration of risk and losses arising from catastrophic events by reinsuring with third-party reinsurers. Sirius Group remains liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts.

At March 31, 2019, Sirius Group had reinsurance recoverables on paid losses of $50.5 million and reinsurance recoverables of $349.3 million on unpaid losses. At December 31, 2018, Sirius Group had reinsurance recoverables on paid losses of $55.0 million and reinsurance recoverables of $350.2 million on unpaid losses. Because retrocessional reinsurance contracts do not relieve Sirius Group of its obligation to its insureds, the collectability of balances due from Sirius Group's reinsurers is important to its financial strength. Sirius Group monitors the financial strength and ratings of retrocessionaires on an ongoing basis. Uncollectible amounts historically have not been significant.

Note 7. Investment securities

Sirius Group's invested assets consist of investment securities and other long-term investments held for general investment purposes. The portfolio of investment securities includes fixed maturity investments, short-term investments, equity securities, and other long-term investments, which are all classified as trading securities. Realized and unrealized investment gains and losses on trading securities are reported in pre-tax revenues.

Net investment income

Sirius Group's net investment income is comprised primarily of interest income along with associated amortization of premium and accretion of discount on Sirius Group's fixed maturity investments, dividend income from its equity investments, and interest income from its short-term investments.

Net investment income for the three months ended March 31, 2019 and 2018 consisted of the following:

		For the three months ended March 31,
(Millions)		2019			2018
Fixed maturity investments	$	16.8		$	9.9
Short-term investments		0.4			0.8
Equity securities		2.7			1.2
Other long-term investments		3.9			1.2
Total investment income		23.8			13.1
Investment expenses		(3.7	)		(2.3	)
Net investment income	$	20.1		$	10.8

20

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Net realized investment gains (losses) and unrealized investment gains

Net realized investment gains (losses) and unrealized investment gains for the three months ended March 31, 2019 and 2018 consisted of the following:

		For the three months ended March 31,
(Millions)		2019			2018
Gross realized gains	$	14.1		$	8.4
Gross realized (losses)		(5.1	)		(12.1	)
Net realized gains (losses) on investments(1)		9.0			(3.7	)
Net unrealized gains on investments(2)		74.0			16.0
Net realized and unrealized investment gains on investments	$	83.0		$	12.3

⁽¹⁾Includes $10.9 and $(1.1) of realized gains (losses) due to foreign currency during 2019 and 2018, respectively.

⁽²⁾Includes $25.0 and $18.9 of unrealized gains due to foreign currency during 2019 and 2018, respectively.

Net realized investment gains (losses)

Net realized investment gains (losses) for the three months ended March 31, 2019 and 2018 consisted of the following:

		For the three months ended March 31,
(Millions)		2019			2018
Fixed maturity investments	$	6.8		$	(2.8	)
Short-term investments		0.1			-
Equity securities		(0.6	)		(1.5	)
Other long-term investments		3.3			0.6
Derivative instruments(1)		(0.6	)		-
Net realized investment gains (losses)	$	9.0		$	(3.7	)

⁽¹⁾See Note 11.

Net unrealized investment gains

Net unrealized investment gains for the three months ended March 31, 2019 and 2018 consisted of the following:

		For the three months ended March 31,
(Millions)		2019			2018
Fixed maturity investments	$	29.7		$	3.0
Short-term investments		2.7			-
Equity securities		25.1			6.4
Other long-term investments		17.1			6.6
Derivative instruments(1)		(0.6	)		-
Net unrealized investment gains	$	74.0		$	16.0

⁽¹⁾See Note 11.

21

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

The following table summarizes the amount of total gains included in earnings attributable to unrealized investment gains for Level 3 investments for the three months ended March 31, 2019 and 2018:

		For the three months ended March 31,
(Millions)		2019		2018
Other long-term investments	$	8.8	$	0.4
Total unrealized investment gains - Level 3 investments	$	8.8	$	0.4

Investment holdings

Fixed maturity investments

The cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses), and fair value of Sirius Group's fixed maturity investments as of March 31, 2019 and December 31, 2018, were as follows:

		March 31, 2019
(Millions)		Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Net foreign currency gains (losses)			Fair value
Corporate debt securities	$	614.6	$	3.0	$	(2.7	)	$	13.2		$	628.1
Asset-backed securities		476.7		0.3		(3.9	)		3.8			476.9
Residential mortgage-backed securities		415.1		5.2		(3.9	)		9.4			425.8
U.S. government and government agency		151.9		0.3		(0.2	)		6.4			158.4
Commercial mortgage-backed securities		113.6		0.4		(1.6	)		1.2			113.6
Non-U.S. government and government agency		37.8		-		(0.1	)		0.8			38.5
Preferred stocks		2.5		0.1		-			(0.1	)		2.5
U.S. States, municipalities and political subdivision		2.6		-		-			-			2.6
Total fixed maturity investments	$	1,814.8	$	9.3	$	(12.4	)	$	34.7		$	1,846.4

		December 31, 2018
(Millions)		Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Net foreign currency gains (losses)			Fair value
Corporate debt securities	$	694.1	$	1.4	$	(7.3	)	$	7.6		$	695.8
Asset-backed securities		496.3		0.1		(3.8	)		1.9			494.5
Residential mortgage-backed securities		413.0		1.7		(7.1	)		5.9			413.5
U.S. government and government agency		163.9		0.3		(0.5	)		4.2			167.9
Commercial mortgage-backed securities		117.7		0.2		(2.7	)		0.7			115.9
Non-U.S. government and government agency		50.6		-		(0.2	)		(0.1	)		50.3
Preferred stocks		14.5		0.6		(6.8	)		0.2			8.5
U.S. States, municipalities and political subdivision		2.8		-		-			-			2.8
Total fixed maturity investments	$	1,952.9	$	4.3	$	(28.4	)	$	20.4		$	1,949.2

22

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

The weighted average duration of Sirius Group's fixed income portfolio as of March 31, 2019 was approximately 1.6 years, including short-term investments, and approximately 2.2 years excluding short-term investments.

The cost or amortized cost and fair value of Sirius Group's fixed maturity investments as of March 31, 2019 and December 31, 2018 are presented below by contractual maturity. Actual maturities could differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.

		March 31, 2019				December 31, 2018
(Millions)		Cost or amortized cost		Fair value		Cost or amortized cost		Fair value
Due in one year or less	$	241.7	$	250.0	$	249.6	$	254.6
Due after one year through five years		554.3		566.8		635.6		636.4
Due after five years through ten years		10.9		10.8		26.2		25.7
Due after ten years		-		-		0.1		0.1
Mortgage-backed and asset-backed securities		1,005.4		1,016.3		1,026.9		1,023.9
Preferred stocks		2.5		2.5		14.5		8.5
Total	$	1,814.8	$	1,846.4	$	1,952.9	$	1,949.2

The following table summarizes the ratings and fair value of fixed maturity investments held in Sirius Group's investment portfolio as of March 31, 2019 and December 31, 2018:

(Millions)		March 31, 2019		December 31, 2018
AAA	$	575.6	$	602.0
AA		799.8		818.0
A		254.2		290.5
BBB		154.4		167.4
Other		62.4		71.3
Total fixed maturity investments(1)	$	1,846.4	$	1,949.2

⁽¹⁾Credit ratings are assigned based on the following hierarchy: 1) Standard & Poor's ("S&P") and 2) Moody's Investors Service ("Moody's").

At March 31, 2019, the above totals included $37.6 million of sub-prime securities. Of this total, $12.7 million was rated AAA, $11.5 million rated AA, $4.4 million rated A, $4.1 million rated BBB and $4.9 million classified as Other. At December 31, 2018, the above totals included $42.6 million of sub-prime securities. Of this total, $17.1 million was rated AAA, $9.8 million rated AA, $6.0 million rated A, $4.7 million rated BBB and $5.0 million classified as Other.

23

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Equity securities and Other long-term investments

The cost or amortized cost, gross unrealized investment gains and losses, net foreign currency gains and losses, and fair values of Sirius Group's equity securities and other long-term investments as of March 31, 2019 and December 31, 2018, were as follows:

	March 31, 2019
(Millions)	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Net foreign currency gains		Fair value
Equity securities	$	398.4	$	26.2	$	(38.7	)	$	8.5	$	394.4
Other long-term investments	$	351.7	$	48.3	$	(20.5	)	$	10.2	$	389.7

	December 31, 2018
(Millions)	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Net foreign currency gains		Fair value
Equity securities	$	409.4	$	17.8	$	(50.8	)	$	3.6	$	380.0
Other long-term investments	$	337.6	$	32.6	$	(13.5	)	$	8.3	$	365.0

Other long-term investments at fair value consisted of the following as at March 31, 2019 and December 31, 2018:

(Millions)		March 31, 2019		December 31, 2018
Hedge funds and private equity funds	$	301.7	$	301.4
Limited liability companies and private equity securities		88.0		63.6
Total other long-term investments	$	389.7	$	365.0

Hedge Funds and Private Equity Funds

Sirius Group holds investments in hedge funds and private equity funds, which are included in other long-term investments. The fair value of these investments has been estimated using the net asset value of the funds. As of March 31, 2019, Sirius Group held investments in 9 hedge funds and 28 private equity funds. The largest investment in a single fund was $50.8 million as of March 31, 2019 and $54.8 million as of December 31, 2018.

24

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

The following table summarizes investments in hedge funds and private equity interests by investment objective and sector as of March 31, 2019 and December 31, 2018:

		March 31, 2019				December 31, 2018
(Millions)		Fair Value		Unfunded Commitments		Fair Value		Unfunded Commitments
398
Hedge funds:
Long/short multi-sector	$	49.5	$	-	$	41.0	$	-
Distressed mortgage credit		50.8		-		54.8		-
Private Credit		20.3				20.0
Other		2.5		-		2.5		-
Total hedge funds		123.1		-		118.3		-
Private equity funds:
Energy infrastructure & services		87.5		30.7		93.7		54.2
Multi-sector		9.2		0.7		9.0		0.7
Healthcare		31.7		15.6		31.7		15.6
Life settlement		23.9		-		23.7		-
Manufacturing/Industrial		23.6		3.1		23.6		10.4
Private equity secondaries		1.1		1.1		1.1		1.1
Real estate		0.3		-		0.3		-
Other		1.3		2.0		-		-
Total private equity funds		178.6		53.2		183.1		82.0
Total hedge and private equity funds included in other long-term investments	$	301.7	$	53.2	$	301.4	$	82.0

Redemption of investments in certain hedge funds is subject to restrictions including lock-up periods where no redemptions or withdrawals are allowed, restrictions on redemption frequency, and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period.

The following summarizes the March 31, 2019 fair value of hedge funds subject to restrictions on redemption frequency and advance notice period requirements for investments in active hedge funds:

		Notice Period
Redemption Frequency (Millions)		30-59 days notice		60-89 days notice		90-119 days notice		120+ days notice		Total
Monthly	$	-	$	32.7	$	-	$	-	$	32.7
Quarterly		0.8		-		-		-		0.8
Semi-annual		-		0.8		-		-		0.8
Annual		-		16.9		51.6		20.3		88.8
Total	$	0.8	$	50.4	$	51.6	$	20.3	$	123.1

Certain of the hedge fund and private equity fund investments in which Sirius Group is invested are no longer active and are in the process of disposing of their underlying investments. Distributions from such funds are remitted to investors as the fund's underlying investments are liquidated. As of March 31, 2019, no distributions were outstanding from these investments. Investments in private equity funds are generally subject to a "lock-up" period during which investors may not request a redemption. Distributions prior to the expected termination date of the fund may be limited to dividends or proceeds arising from the liquidation of the fund's underlying investments.

25

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

In addition, certain private equity funds provide an option to extend the lock-up period at either the sole discretion of the fund manager or upon agreement between the fund and the investors.

As of March 31, 2019, investments in private equity funds were subject to lock-up periods as follows:

(Millions)	1 - 3 years		3 – 5 years		5 – 10 years		Total
Private Equity Funds – expected lock-up period remaining	$	12.6	$	4.3	$	161.7	$	178.6

Investments held on deposit or as collateral

As of March 31, 2019 and December 31, 2018 investments of $764.9 million and $792.4 million, respectively, were held in trusts required to be maintained in relation to various reinsurance agreements. Sirius Group's reinsurance operations are required to maintain deposits with certain insurance regulatory agencies in order to maintain their insurance licenses. The fair value of such deposits that are included within total investments totaled $779.5 million and $801.2 million as of March 31, 2019 and December 31, 2018, respectively.

As of March 31, 2019, Sirius Group held $0.2 million of collateral in the form of short-term investments associated with Interest Rate Cap agreements. (See Note 11.)

Unsettled investment purchases and sales

As of March 31, 2019 and December 31, 2018, Sirius Group reported $9.9 million and $3.2 million, respectively, in Accounts payable on unsettled investment purchases.

As of March 31, 2019 and December 31, 2018, Sirius Group reported $1.7 million and $5.0 million, respectively, in Accounts receivable on unsettled investment sales.

Note 8. Fair value measurements

Fair value measurements are categorized into a hierarchy that distinguishes between inputs based on market data from independent sources ("observable inputs") and a reporting entity's internal assumptions based upon the best information available when external market data is limited or unavailable ("unobservable inputs"). Quoted prices in active markets for identical assets or liabilities have the highest priority ("Level 1"), followed by observable inputs other than quoted prices, including prices for similar but not identical assets or liabilities ("Level 2"), and unobservable inputs, including the reporting entity's estimates of the assumptions that market participants would use, having the lowest priority ("Level 3").

The availability of observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety factors including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the instrument. 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.

26

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This may lead the Company to change the selection of the valuation technique (for example, from market to cash flow approach) or to use multiple valuation techniques to estimate the fair value of a financial instrument. These circumstances could cause an instrument to be reclassified between levels within the fair value hierarchy. Investments valued using Level 1 inputs include fixed maturity investments, primarily investments in U.S. Treasuries Bills and Notes, equity securities, and short-term investments. Investments valued using Level 2 inputs are primarily comprised of fixed maturity investments, which have been disaggregated into classes, including U.S. government and government agency, corporate debt securities, mortgage-backed and asset-backed securities, non-U.S. government and government agency, U.S. state and municipalities and political sub division and preferred stocks. Investments valued using Level 2 inputs also include certain exchange-traded funds that track U.S. stock indices such as the S&P 500 but are traded on foreign exchanges. Fair value estimates for investments that trade infrequently and have few or no observable market prices are classified as Level 3 measurements. Sirius Group determines when transfers between levels have occurred as of the beginning of the period.

Valuation techniques

Sirius Group uses outside pricing services to assist in determining fair values for its investments. For investments in active markets, Sirius Group uses the quoted market prices provided by outside pricing services to determine fair value. The outside pricing services Sirius Group uses have indicated that they will only provide prices where observable inputs are available. In circumstances where quoted market prices are unavailable or are not considered reasonable, Sirius Group estimates the fair value using industry standard pricing models and observable inputs such as benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, prepayment speeds, reference data including research publications, and other relevant inputs. Given that many fixed maturity investments do not trade on a daily basis, the outside pricing services evaluate a wide range of fixed maturity investments by regularly drawing parallels from recent trades and quotes of comparable securities with similar features. The characteristics used to identify comparable fixed maturity investments vary by asset type and take into account market convention.

The valuation process above is generally applicable to all of Sirius Group's fixed maturity investments. The techniques and inputs specific to asset classes within Sirius Group's fixed maturity investments for Level 2 securities that use observable inputs are as follows:

U.S. government and government agency

U.S. government and government agency securities consist primarily of debt securities issued by the U.S. Treasury and mortgage pass-through agencies such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. Fixed maturity investments included in U.S. government and government agency securities are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources and integrate other observations from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The fair value of each security is individually computed using analytical models that incorporate option-adjusted spreads and other daily interest rate data.

Non-U.S. government and government agency

Non-U.S. government and government agency securities consist of debt securities issued by non-U.S. governments and their agencies along with supranational organizations (also known as sovereign debt securities). Securities held in these sectors are primarily priced by pricing services that employ proprietary discounted cash flow models to value the securities. Key quantitative inputs for these models are daily observed benchmark curves for treasury, swap, and high issuance credits. The pricing services then apply a credit spread for each security, which is developed by in-depth and real-time market analysis. For securities in which trade volume is low, the pricing services utilize data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets.

27

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Corporate debt securities

Corporate debt securities consist primarily of investment-grade debt of a wide variety of U.S. and non-U.S. corporate issuers and industries. The corporate fixed maturity investments are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources regarding the issuer of the security and obtain credit data, as well as other observations, from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features that may influence risk.

Mortgage-backed and asset-backed securities

The fair value of mortgage and asset-backed securities is primarily priced by pricing services using a pricing model that utilizes information from market sources and leveraging similar securities. Key inputs include benchmark yields, reported trades, underlying tranche cash flow data and collateral performance, plus new issue data, as well as broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including issuer, vintage, loan type, collateral attributes, prepayment speeds, default rates, recovery rates, cash flow stress testing, credit quality ratings, and market research publications.

U.S. states, municipalities and political subdivisions

The U.S. states, municipalities and political subdivisions portfolio contains debt securities issued by U.S. domiciled state and municipal entities. These securities are generally priced by independent pricing services using the techniques described for U.S. government and government agency securities described above.

Preferred stocks

The fair value of preferred stocks is generally priced by independent pricing services using an evaluated pricing model that calculates the appropriate spread over a comparable security for each issue. Key inputs include exchange prices (underlying and common stock of the same issuer), benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including sector, coupon, credit quality ratings, duration, credit enhancements, early redemption features, and market research publications.

Level 3 investments

Level 3 valuations are generated from techniques that use assumptions not observable in the market. These unobservable assumptions reflect Sirius Group's assumptions about what market participants would use in valuing the investment. Generally, certain securities may start out as Level 3 when they are originally issued but, as observable inputs become available in the market, they may be reclassified to Level 2.

Sirius Group employs a number of procedures to assess the reasonableness of the fair value measurements for its other long-term investments, including obtaining and reviewing the audited annual financial statements of hedge funds and private equity funds and periodically discussing each fund's pricing with the fund manager. However, since the fund managers do not provide sufficient information to evaluate the pricing inputs and methods for each underlying investment, the inputs are considered to be unobservable.

The fair values of Sirius Group's investments in private equity securities and private debt instruments have been classified as Level 3 measurements. They are carried at fair value and are initially valued based on transaction price. Their valuation is subsequently estimated based on available evidence such as a market transaction in similar instruments and other financial information for the issuer.

28

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Investments measured using net asset value

The fair value of Sirius Group's investments in hedge funds and private equity funds has been determined using net asset value ("NAV"). The hedge fund's administrator provides quarterly updates of fair value in the form of Sirius Group's proportional interest in the underlying fund's NAV, which is deemed to approximate fair value, generally with a three month delay in valuation. The fair value of investment in hedge funds is measured using the NAV practical expedient and therefore has been not categorized within the fair value hierarchy. The private equity funds provide quarterly or semi-annual partnership capital statements with a three or six month delay which are used as a basis for valuation. These private equity investments vary in investment strategies and are not actively traded in any open markets. Due to a lag in reporting, some of the fund managers, fund administrators, or both, are unable to provide final fund valuations as of the Company's reporting date. In these circumstances, Sirius Group estimates the return of the current period and uses all credible information available. This includes utilizing preliminary estimates reported by its fund managers and using other information that is available to Sirius Group with respect to the underlying investments, as necessary.

Fair value measurements by level

The following tables summarize Sirius Group's financial assets and liabilities measured at fair value as of March 31, 2019 and December 31, 2018 by level:

		March 31, 2019
(Millions)		Fair Value		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs
Assets measured at fair value
Fixed maturity investments:
U.S. Government and government agency	$	158.4	$	157.0	$	1.4	$	-
Corporate debt securities		628.1		-		628.1		-
Residential mortgage-backed securities		425.8		-		425.8		-
Asset-backed securities		476.9		-		476.9		-
Commercial mortgage-backed securities		113.6		-		113.6		-
Non-U.S. government and government agency		38.5		33.9		4.6		-
Preferred stocks		2.5		-		2.5		-
U.S. States, municipalities, and political subdivision		2.6		-		2.6		-
Total fixed maturity investments		1,846.4		190.9		1,655.5		-
Short-term investments		833.6		792.5		41.1		-
Equity securities		394.4		393.5		0.9		-
Other long-term investments(1)		88.0		-		-		88.0
Total investments	$	3,162.4	$	1,376.9	$	1,697.5	$	88.0
Derivative instruments		0.8		0.5		-		0.3
Total assets measured at fair value	$	3,163.2	$	1,377.4	$	1,697.5	$	88.3
Liabilities measured at fair value
Contingent consideration liabilities	$	28.8	$	-	$	-	$	28.8
Derivative instruments		5.3		0.2		-		5.1
Total liabilities measured at fair value	$	34.1	$	0.2	$	-	$	33.9

⁽¹⁾Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient.

29

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

		December 31, 2018
(Millions)		Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs
Assets measured at fair value
Fixed maturity investments:
U.S. Government and government agency	$	167.9	$	164.7	$	3.2	$	-
Corporate debt securities		695.8		-		695.8		-
Asset-backed securities		494.5		-		494.5		-
Residential mortgage-backed securities		413.5		-		413.5		-
Commercial mortgage-backed securities		115.9		-		115.9		-
Non-U.S. government and government agency		50.3		42.9		7.4		-
Preferred stocks		8.5		-		3.1		5.4
U.S. States, municipalities, and political subdivision		2.8		-		2.8		-
Total fixed maturity investments		1,949.2		207.6		1,736.2		5.4
Short-term investments		715.5		679.3		36.2		-
Equity securities		380.0		380.0		-		-
Other long-term investments(1)		63.6		-		-		63.6
Total investments	$	3,108.3	$	1,266.9	$	1,772.4	$	69.0
Derivative instruments		4.1		-		-		4.1
Total assets measured at fair value	$	3,112.4	$	1,266.9	$	1,772.4	$	73.1
Liabilities measured at fair value
Contingent consideration liabilities	$	28.8	$	-	$	-	$	28.8
Derivative instruments		5.1		0.5		-		4.6
Total liabilities measured at fair value	$	33.9	$	0.5	$	-	$	33.4

⁽¹⁾Excludes fair value of $301.4 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient.

Rollforward of Level 3 fair value measurements

The following tables present changes in Level 3 for financial instruments measured at fair value for the three months ended March 31, 2019 and 2018:

		For the Three Months Ended March 31, 2019
(Millions)		Fixed Maturities			Other long-term investments(1)			Derivative instruments assets & (liabilities)			Contingent consideration (liabilities)
Balance at January 1, 2018	$	5.4		$	63.6		$	(0.5	)	$	(28.8	)
Total realized and unrealized gains		-			9.3			(5.1	)		-
Foreign currency losses through Other Comprehensive Income		-			(0.7	)		-			-
Purchases		-			15.8			-			-
Sales/Settlements		(5.4	)		-			0.8			-
Balance at March 31, 2019	$	-		$	88.0		$	(4.8	)	$	(28.8	)

⁽¹⁾Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient.

30

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

		For the Three Months Ended March 31, 2018
(Millions)		Fixed Maturities		Other long-term investments(1)			Derivative instruments assets & (liabilities)			Contingent consideration (liabilities)
Balance at January 1, 2018	$	8.0	$	64.2		$	(6.1	)	$	(42.8	)
Total realized and unrealized gains		-		0.8			-			-
Foreign currency losses through Other Comprehensive Income		-		(0.3	)		-			-
Purchases		0.6		0.4			-			-
Sales/Settlements		-		(0.2	)		-			-
Balance at March 31, 2018	$	8.6	$	64.9		$	(6.1	)	$	(42.8	)

⁽¹⁾ Excludes fair value of $221.9 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient.

Fair value measurements - transfers between levels

There were no transfers between Level 3 and Level 2 measurements during the three months ended March 31, 2019 and 2018.

Significant unobservable inputs

The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments as of March 31, 2019 and December 31, 2018, and includes only those instruments for which information about the inputs is reasonably available to Sirius Group, such as data from independent third-party valuation service providers and from internal valuation models.

(Millions, except share prices)	March 31, 2019
Description	Valuation Technique(s)		Fair Value		Unobservable Input
Private equity securities(1)	Share price of recent transaction	$	32.5		Purchase share price	$	40.63
Preferred stock(1)	Share price of recent transaction	$	17.5		Purchase price	$	7.74
Private equity securities(1)	Multiple of GAAP book value	$	16.8		Book value multiple		1.0	X
Private debt instrument(1)	Purchase price of recent transaction	$	7.8		Purchase price	$	9.0
Private debt instrument(1)	Purchase price of recent transaction	$	6.0		Purchase price	$	6.0
Private equity securities(1)	Share price of recent transaction	$	5.1		Purchase price	$	7.74
Private equity securities(1)	Purchase price of recent transaction	$	1.0		Purchase price	$	10.0
Private equity securities(1)	Purchase price of recent transaction	$	0.8		Purchase price	$	0.8
Private equity securities(1)	Purchase price of recent transaction	$	0.3		Purchase price	$	0.3
Private debt instrument(1)	Purchase price of recent transaction	$	0.2		Purchase price	$	0.2
Currency forwards(2)	Third party appraisal	$	0.2		Broker quote	$	0.2
Interest rate cap(2)	Third party appraisal	$	0.1		Broker quote	$	0.1
Weather derivatives(2)	Third party appraisal	$	(1.3	)	Broker quote	$	(1.3	)
Currency swaps(2)	Third party appraisal	$	(3.8	)	Broker quote	$	(3.8	)
Contingent consideration	External valuation model	$	(28.8	)	Discounted future payments	$	(28.8	)

⁽¹⁾As of March 31, 2019, each asset type consists of one security.

⁽²⁾See Note 11 for discussion of derivative instruments.

31

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

(Millions)	December 31, 2018
Description	Valuation technique(s)		Fair value		Unobservable input
Private equity securities(1)	Share price of recent transaction	$	32.5		Purchase share price	$	40.63
Private equity securities(1)	Multiple of GAAP book value	$	14.7		Book value multiple		0.9	X
Private debt instrument(1)	Purchase price of recent transaction	$	9.0		Purchase price	$	9.0
Private debt instrument(1)	Purchase price of recent transaction	$	6.0		Purchase price	$	6.0
Preferred stock(1)	Share price of recent transaction	$	4.6		Purchase price	$	1.88
Weather derivatives(2)	Third party appraisal	$	3.9		Broker quote	$	3.9
Private equity securities(1)	Purchase price of recent transaction	$	0.9		Purchase price	$	1.88
Preferred stock(1)	Share price of recent transaction	$	0.8		Purchase price	$	0.8
Private equity securities(1)	Share price of recent transaction	$	0.3		Purchase price	$	10.0
Private debt instrument(1)	Purchase price of recent transaction	$	0.2		Purchase price	$	0.2
Interest rate cap(2)	Third party appraisal	$	0.2		Broker quote	$	0.2
Currency swaps(2)	Third party appraisal	$	(4.6	)	Broker quote	$	(4.6	)
Contingent consideration	External valuation model	$	(28.8	)	Discounted future payments	$	(28.8	)

⁽¹⁾As of December 31, 2018, each asset type consists of one security.

⁽²⁾See Note 11 for discussion of derivative instruments.

Financial instruments disclosed, but not carried at fair value

Sirius Group uses various financial instruments in the normal course of its business. The carrying values of Cash, Accrued investment income, certain other assets, Accounts payable on unsettled investment purchases, certain other liabilities, and other financial instruments not included in the table below approximated their fair values at March 31, 2019 and December 31, 2018, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 3. The following table includes financial instruments for which the carrying value differs from the estimated fair values at March 31, 2019 and December 31, 2018:

		March 31, 2019				December 31, 2018
(Millions)		Fair Value(1)		Carrying Value		Fair Value(1)		Carrying Value
Liabilities, Mezzanine equity, and Non-controlling interest:
2017 SEK Subordinated Notes	$	297.0	$	292.7	$	309.5	$	303.6
2016 SIG Senior Notes	$	361.7	$	393.4	$	347.6	$	393.2
Series B preference shares	$	200.2	$	240.6	$	191.7	$	232.2

⁽¹⁾Fair value estimated by internal pricing and considered a Level 3 measurement.

Note 9. Debt and standby letters of credit facilities

Sirius Group's debt outstanding as of March 31, 2019 and December 31, 2018 consisted of the following:

(Millions)		March 31, 2019		Effective Rate(1)			December 31, 2018		Effective Rate(1)
2017 SEK Subordinated Notes, at face value	$	296.6		3.7	%	$	307.6		3.8	%
Unamortized issuance costs		(3.9	)				(4.0	)
2017 SEK Subordinated Notes, carrying value		292.7					303.6
2016 SIG Senior Notes, at face value		400.0		4.7	%		400.0		4.7	%
Unamortized discount		(2.5	)				(2.6	)
Unamortized issuance costs		(4.1	)				(4.2	)
2016 SIG Senior Notes, carrying value		393.4					393.2
Total debt	$	686.1				$	696.8

⁽¹⁾Effective rate considers the effect of the debt issuance costs.

32

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

2017 SEK Subordinated Notes

On September 22, 2017, Sirius Group issued floating rate callable subordinated notes denominated in Swedish kronor ("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"). The 2017 SEK Subordinated Notes were issued in an offering that was exempt from the registration requirements of the Securities Act of 1933 (the "Securities Act"). The 2017 SEK Subordinated Notes bear interest on their principal amount at a floating rate equal to the applicable Stockholm Interbank Offered Rate ("STIBOR") for the relevant interest period plus an applicable margin, payable quarterly in arrears on March 22, June 22, September 22, and December 22 in each year commencing on December 22, 2017, until maturity in September 2047.

Beginning on September 22, 2022, the 2017 SEK Subordinated Notes may be redeemed, in whole or in part, at Sirius Group's option. In addition, within 90 days following the occurrence of a Specified Event (as defined below), the 2017 SEK Subordinated Notes may be redeemed, in whole but not in part, at Sirius Group's option. "Specified Event" means (a) an "Additional Amounts Event" in connection with a change in laws, rules or regulations as a result of which Sirius Group is obligated to pay additional amounts on the notes in respect of any withholding or deduction for taxes, (b) a "Tax Event" in connection with a change in laws, rules or regulations as a result of which interest on the notes is no longer fully deductible by Sirius Group for income tax purposes in the applicable jurisdiction (to the extent that such interest was so deductible as of the time of such Tax Event), (c) a "Rating Methodology Event" in connection with a change in, or clarification to, the rating methodology of Standard & Poor's or Fitch that results in a materially unfavorable capital treatment of the notes, or (d) a "Regulatory Event" in connection with a change in, or clarification to, applicable supervisory regulations that results in the notes no longer qualifying as Tier 2 Capital.

Sirius Group incurred $4.6 million in expenses related to the issuance of the 2017 SEK Subordinated Notes (including SEK 27.5 million, or $3.5 million, in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2017 SEK Subordinated Notes. For the three months ended March 31, 2019 and 2018, Sirius Group recognized $11.0 million and $5.8 million, respectively, of foreign currency exchange gains on the remeasurement of the 2017 SEK Subordinated Notes into U.S. dollars ("USD") from SEK.

Taking into effect the amortization of all underwriting and issuance expenses, and applicable STIBOR, the 2017 SEK Subordinated Notes yield an annualized effective rate of approximately 3.7% and 3.5% for the three months ended March 31, 2019 and 2018, respectively. Sirius Group recorded $2.8 million and $2.9 million of interest expense, inclusive of amortization of issuance costs on the 2017 SEK Subordinated Notes for the three months ended March 31, 2019 and 2018, respectively.

2016 SIG Senior Notes

On November 1, 2016, Sirius Group issued $400.0 million face value of senior unsecured notes ("2016 SIG Senior Notes") at an issue price of 99.209% for net proceeds of $392.4 million after taking into effect both deferrable and non-deferrable issuance costs. The 2016 SIG Senior Notes were issued in an offering that was exempt from the registration requirements of the Securities Act. The 2016 SIG Senior Notes bear an annual interest rate of 4.6%, payable semi-annually in arrears on May 1, and November 1, in each year commencing on May 1, 2017, until maturity in November 2026.

Sirius Group incurred $5.1 million in expenses related to the issuance of the 2016 SIG Senior Notes (including $3.4 million in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2016 SIG Senior Notes.

Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the 2016 SIG Senior Notes yield an effective rate of approximately 4.7% per annum. Sirius Group recorded $4.8 million, inclusive of amortization of issuance costs on the 2016 SIG Senior Notes, for both of the three month periods ended March 31, 2019 and 2018, respectively.

33

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Standby letter of credit facilities

On November 9, 2018, Sirius International renewed two standby letter of credit facility agreements totaling $160 million to provide capital support for Lloyd's Syndicate 1945. The first letter of credit is a renewal of a $125 million facility with Nordea Bank Finland Abp, London Branch, which is issued on an unsecured basis. The second letter of credit is a $35 million facility with DNB Bank ASA, Sweden Branch, $25 million of which is issued on an unsecured basis. Each facility is renewable annually. The above referenced facilities are subject to various affirmative, negative and financial covenants that the Company considers to be customary for such borrowings, including certain minimum net worth, maximum debt to capitalization standards, and change in control provisions.

Sirius International has other secured letter of credit and trust arrangements with various financial institutions to support its insurance operations. As of March 31, 2019 and December 31, 2018, these secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust of SEK 2.7 billion and SEK 2.9 billion, respectively, or $296.0 million and $321.3 million, respectively (based on the March 31, 2019 and December 31, 2018 SEK to USD exchange rates). As of March 31, 2019 and December 31, 2018, Sirius America Insurance Company's trust arrangements were collateralized by pledged assets and assets in trust of $56.7 million and $56.2 million, respectively. As of March 31, 2019 and December 31, 2018, Sirius Bermuda's trust arrangements were collateralized by pledged assets and assets in trust of $347.2 million and $319.7 million, respectively.

Revolving credit facility

In February 2018, Sirius Group, through its indirectly wholly-owned subsidiary Sirius International Group, Ltd. entered into a three-year, $300 million senior unsecured revolving credit facility (the "Facility"). The Facility provides access to loans for working capital and general corporate purposes, and letters of credit to support obligations under insurance and reinsurance agreements and retrocessional agreements. The Facility is subject to various affirmative, negative and financial covenants that Sirius Group considers to be customary for such borrowings, including certain minimum net worth, maximum debt to capitalization, financial strength rating standards, and change in control provisions. As of March 31, 2019, there were no outstanding borrowings under the Facility.

Debt and standby letter of credit facility covenants

As of March 31, 2019, Sirius Group was in compliance with all of the covenants under the 2017 SEK Subordinated Notes, the 2016 SIG Senior Notes, the Nordea Bank Finland Abp, London Branch facility, and the DNB Bank ASA, Sweden Branch facility. In addition, as of March 31, 2019, Sirius Group was in compliance with all of the covenants under the Facility.

Interest

Total interest expense incurred by Sirius Group for its indebtedness for the three months ended March 31, 2019 and 2018 was $7.6 million and $7.7 million, respectively. Total interest paid by Sirius Group for its indebtedness for the three months ended March 31, 2019 and 2018 was $2.7 million and $2.9 million, respectively.

Note 10. Income taxes

The Company and its Bermuda-domiciled subsidiaries are not subject to Bermuda income tax under current Bermuda law. In the event there is a change in the current law such that taxes are imposed, the Company and its Bermuda-domiciled subsidiaries would be exempt from such tax until March 31, 2035, pursuant to the Bermuda Exempted Undertakings Tax Protection Act of 1966. The Company has subsidiaries and branches that operate in various other jurisdictions around the world that are subject to tax in the jurisdictions in which they operate. The jurisdictions in which the Company's subsidiaries and branches are subject to tax are Australia, Belgium, Canada, Denmark, Germany, Gibraltar, Hong Kong (China), Luxembourg, Malaysia, the Netherlands, Shanghai (China), Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

34

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Sirius Group reported an income tax expense of $17.2 million and $11.1 million during the three months ended March 31, 2019 and 2018, respectively, on pre-tax income of $121.3 and $54.4 million, respectively. The effective tax rate for the three months of 2019 was 14.2%, which was lower than the Swedish statutory rate of 21.4% (the rate at which the majority of Sirius Group's worldwide operations are taxed) primarily because of income recognized in jurisdictions with lower rates than Sweden. The effective tax rate for the three months ended March 31, 2018 was 20.3%, which was lower than the Swedish statutory rate of 22% primarily because of income recognized in jurisdictions with lower rates than Sweden and non-recurring adjustments to Sirius Group's deferred tax assets which resulted from various internal restructurings. In arriving at the effective tax rate for the three months ended March 31, 2019 and 2018, Sirius Group forecasted all income and expense items including the change in unrealized investment gains (losses) and realized investment gains (losses) for the years ending December 31, 2019 and 2018.

The Tax Cuts and Jobs Act (the "TCJA") was enacted into law in the U.S. in December 2017. The Company previously applied Staff Accounting Bulletin 118 ("SAB 118"), which provided guidance on accounting for the tax effects of the TCJA. SAB 118 addresses situations where accounting for certain income tax effects of the TCJA under ASC 740, Income Taxes ("ASC 740"), may be incomplete upon issuance of an entity's financial statements and provides a one-year measurement period from the enactment date to complete the accounting under ASC 740. The Company has completed its accounting for all material tax effects of the TCJA and recognized adjustments as of December 31, 2018.

The TCJA includes a new Base Erosion and Anti-Abuse Minimum Tax ("BEAT") provision, which is essentially a minimum tax that is potentially applicable to certain otherwise deductible payments made by U.S. entities to non-U.S. affiliates, including cross-border interest payments and reinsurance premiums. The statutory BEAT rate is 10% in 2019-2025, and then rises to 12.5% in 2026 and thereafter. The TCJA also includes provisions for Global Intangible Low-Taxed Income ("GILTI") under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries. Consistent with accounting guidance, Sirius Group will treat BEAT as an in period tax charge when incurred in future periods for which no deferred taxes need to be provided and has made an accounting policy election to treat GILTI taxes in a similar manner. No provision for income taxes related to BEAT or GILTI was recorded as of March 31, 2019 and December 31, 2018.

Sirius Group has capital and liquidity in many of its subsidiaries, some of which may reflect undistributed earnings. If such capital or liquidity were to be paid or distributed to the Company or Sirius Group's 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. However, the applicable tax laws in relevant countries are still evolving, including in response to guidance from the Organisation for Economic Cooperation and Development. 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 attempt to apply income or withholding tax to past earnings or payments.

Deferred tax asset, net of valuation allowance

Sirius Group's net deferred tax liability, net of the valuation allowance as of March 31, 2019 was $59.0 million. Of the $59.0 million, $33.1 million relates to net deferred tax assets in U.S. subsidiaries, $131.5 million relates to net deferred tax assets in Luxembourg subsidiaries, $11.5 million relates to net deferred tax assets in United Kingdom subsidiaries, $230.6 million relates to net deferred tax liabilities in Sweden subsidiaries, and $4.5 million relates to other net deferred tax liabilities.

Sirius Group records a valuation allowance against deferred tax assets if it becomes more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in income tax expense in the period of change. In determining whether or not a valuation allowance, or change therein, is warranted, Sirius Group considers factors such as prior earnings history, expected future earnings, carryback and carryforward periods and strategies that if executed would result in the realization of a deferred tax asset. It is possible that certain planning strategies or projected earnings in certain subsidiaries may not be feasible to utilize the entire deferred tax asset, which could result in material changes to Sirius Group's deferred tax assets and tax expense.

35

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Uncertain tax positions

Recognition of the benefit of a given tax position is based upon whether a company determines that it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. In evaluating the more likely than not recognition threshold, Sirius Group must presume that the tax position will be subject to examination by a taxing authority with full knowledge of all relevant information. 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 March 31, 2019, the total reserve for unrecognized tax benefits is $63.3 million. If Sirius Group determines in the future that its reserves for unrecognized tax benefits on permanent differences and interest and penalties are not needed, the reversal of $63.2 million of such reserves as of March 31, 2019 would be recorded as an income tax benefit and would impact the effective tax rate. If Sirius Group determines in the future that its reserves for unrecognized tax benefits on temporary differences are not needed, the reversal of $0.1 million of such reserves as of March 31, 2019 would not impact the effective tax rate due to deferred tax accounting but would accelerate the payment of cash to the taxing authority. Most of Sirius Group's reserves for unrecognized tax benefits on permanent differences relate to interest deductions denied by the Swedish Tax Authority ("STA"), as described further below.

The Swedish Tax Authority ("STA") has denied deductions claimed by two of the Company's Swedish subsidiaries in certain tax years for interest paid on intra-group debt instruments. Sirius Group has challenged the STA's denial in court based on the technical merits. In October 2018, one of the Swedish subsidiaries received an adverse decision from Sweden's Administrative Court, which Sirius Group has appealed. Sirius Group has taken into account this and other relevant developments in applicable Swedish tax law and has established a reserve for this uncertain tax position. As of March 31, 2019, the total amount of such reserve was $63.0 million.

In connection with this matter, Sirius Group has also taken into account the Stock Purchase Agreement ("SPA") by which Sirius Group was sold to CMIG International Holding Pte. Ltd ("CMIG International") in 2016 and has recorded an indemnification asset. Pursuant to the SPA, the seller agreed to indemnify the buyer and Sirius Group for, among other things, (1) any additional tax liability in excess of Sirius Group's accounting for uncertain tax positions for tax periods prior to the sale of Sirius Group to CMIG International, and (2) an impairment in Sirius Group's net deferred tax assets resulting from a final determination by a tax authority. While Sirius Group intends to continue challenging the STA's denial based on the technical merits (including appealing the adverse court decision received in October 2018), the ultimate resolution of these tax disputes is uncertain and no assurance can be given that there will be no material changes to Sirius Group's operating results or balance sheet in connection with these uncertain tax positions or the related indemnification.

With few exceptions, Sirius Group is no longer subject to U.S. federal, state or non-U.S. income tax examinations by tax authorities for years before 2014.

Note 11. Derivatives

Interest Rate Cap

Sirius Group entered into an interest rate swap ("Interest Rate Cap") with two financial institutions where it paid an upfront premium and in return receives a series of quarterly payments based on the 3-month London Interbank Offered Rate ("LIBOR") at the time of payment. The Interest Rate Cap does not qualify for hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Other revenue. The fair value of the interest rate cap has been estimated using a single broker quote and, accordingly, has been classified as a

36

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Level 3 measurement as of March 31, 2019 and December 31, 2018. Collateral held is recorded within short-term investments with an equal amount recognized as a liability to return collateral. Sirius Group's liability to return that collateral is based on the amounts provided by the counterparties and investment earnings thereon. The following table summarizes the Interest Rate Cap collateral balances held by Sirius Group and ratings by counterparty:

		March 31, 2019
(Millions)		Collateral Balances Held	S & P Rating(1)
Barclays Bank Plc	$	0.1	A
Nordea Bank Abp		0.1	AA-
Total	$	0.2

⁽¹⁾Standard & Poor's ratings as detailed above are: "AA-" (Very Strong, which is the fourth highest of twenty-three creditworthiness ratings) and "A" (Strong, which is the sixth highest of twenty-three credit worthiness ratings).

Foreign currency swaps

Sirius Group executes foreign currency swaps to manage foreign currency exposure. The foreign currency swaps have not been designated or accounted for under hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Net foreign exchange gains (losses). The fair value of the foreign currency swaps has been estimated using a single broker quote and, accordingly, has been classified as a Level 3 measurement as of March 31, 2019 and December 31, 2018. Sirius Group does not provide or hold any collateral associated with the swaps.

Foreign currency forward

Sirius Group executes foreign currency forwards to manage currency exposure against a foreign currency investment. The foreign currency forwards are not designated or accounted for under hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Net foreign exchange gains (losses). The fair value of the foreign currency forwards are estimated using a single broker quote and accordingly, classified as a Level 3 measurement. Sirius Group did not provide or hold any collateral associated with the forwards.

Weather derivatives

Sirius Group holds assets and assumes liabilities related to weather and weather contingent risk management products. Weather and weather contingent derivative contracts are entered into with the objective of generating profits in normal climatic conditions. Accordingly, Sirius Group's weather and weather contingent derivatives are not designed to meet the criteria for hedge accounting under GAAP. Sirius Group receives payment of premium at the contract inception in exchange for bearing the risk of variations in a quantifiable weather index. Changes in fair value are recognized as unrealized gains or losses and are presented within Other revenue. The fair value of the weather derivatives was estimated using a broker quote. Because of the significance of the unobservable inputs used to estimate the fair value of Sirius Group's weather risk contracts, the fair value measurements of the contracts are deemed to be Level 3 measurements in the fair value hierarchy as of March 31, 2019 and December 31, 2018. Sirius Group does not provide or hold any collateral associated with the weather derivatives.

Equity futures contracts

Sirius Group executes trades in equity futures contracts to hedge against long positions in Common equities. The equity futures contracts are not designated or accounted for under hedge accounting. Changes in fair value are presented within Net realized investment gains (losses). The fair value of the equity put options is widely available and have quoted prices in active markets and accordingly, were classified as a Level 1 measurement.

Equity put options

Sirius Group executes trades in equity put options to hedge against long positions in Common equities. The equity put options are not designated or accounted for under hedge accounting. Changes in fair value are presented within Net unrealized investment (losses) gains. The fair value of the equity put options is widely available and have quoted prices in active markets and accordingly, were classified as a Level 1 measurement.

37

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

The following tables summarize information on the classification and amount of the fair value of derivatives not designated as hedging instruments within the Company's Consolidated Balance Sheets as at March 31, 2019 and December 31, 2018:

(Millions)		March 31, 2019							December 31, 2018
Derivatives not designated as hedging instruments		Notional Value			Asset derivative at fair value(1)		Liability derivative at fair value(2)		Notional Value		Asset derivative at fair value(1)		Liability derivative at fair value(2)
Interest rate cap	$	250.0		$	0.1	$	-	$	250.0	$	0.2	$	-
Foreign currency swaps	$	90.0		$	-	$	3.8	$	45.0	$	-	$	4.6
Foreign currency forwards	$	15.0		$	0.2	$	-	$	-	$	-	$	-
Weather derivatives	$	121.6		$	-	$	1.3	$	150.5	$	3.9	$	-
Equity futures contracts	$	(17.0	)	$	-	$	0.2	$	-	$	-	$	-
Equity put options	$	10.9		$	0.5	$	-	$	6.2	$	-	$	0.5

⁽¹⁾Asset derivatives are classified within Other assets within the Company's Consolidated Balance Sheets at March 31, 2019 and December 31, 2018.

⁽²⁾Liability derivatives are classified within Other liabilities within the Company's Consolidated Balance Sheets at March 31, 2019 and December 31, 2018.

The following table summarizes information on the classification and net impact on earnings, recognized in the Company's Consolidated Statements of (Loss) Income relating to derivatives during the three months ended March 31, 2019 and 2018:

(Millions)			For the three months ended March 31,
Derivatives not designated as hedging instruments	Classification of gains (losses) recognized in earnings		2019			2018
Interest rate cap	Other revenues	$	(0.1	)	$	0.3
Foreign currency swaps	Net foreign exchange gains (losses)	$	0.8		$	1.3
Foreign currency forwards	Net foreign exchange gains (losses)	$	0.2		$	-
Weather derivatives	Other revenues	$	(6.0	)	$	1.0
Equity futures contracts	Net realized investment gains (losses)	$	(0.6	)	$	-
Equity futures contracts	Net unrealized investment gains	$	(0.2	)	$	-
Equity put options	Net unrealized investment gains	$	(0.4	)	$	-

Note 12. Share-based compensation

Sirius Group's employee compensation plans include grants for various types of share-based and non share-based compensation awards to key employees of Sirius Group. As at March 31, 2019, Sirius Group's share-based compensation awards consist of performance shares units, restricted share units, and options.

For the three months ended March 31, 2019, Sirius Group granted employees 401,311 performance share units, 1,411,714 restricted share units, and 1,374,944 of officer stock options.

As at March 31, 2019 there were $34.3 million of unrecognized share-based compensation costs, which are expected to be recognized over the next two to 3 years. There were no unrecognized share-based compensation costs as at March 31, 2018.

38

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Note 13. Common shareholder's equity, mezzanine equity, and non-controlling interests

Common shareholder's equity

The authorized share capital of the Company consists of 500,000,000 Common shares, $0.01 par value per share, and 100,000,000 Preference shares, $0.01 par value per share.

The following table presents changes in the Company's issued and outstanding Common shares as at March 31, 2019 and 2018, respectively:

	Three Months Ended March 31,
(Millions)	2019	2018
Common shares:
Shares issued and outstanding, beginning of period	115,151,251	120,000,000
Issuance of shares to directors and employees	111,052	-
Shares issued and outstanding, end of period	115,262,303	120,000,000

Dividends

The Company did not pay dividends to common shareholders during the three months ended March 31, 2019 and 2018.

Mezzanine equity

Series B Preference Shares

On November 5, 2018, in connection with the closing of the Merger, Sirius Group issued 11,901,670 of the 15,000,000 designated Series B preference shares, with a par value of $0.01 per share, as part of the Sirius Group Private Placement. (See Note 3.)

The Series B preference shares rank senior to common shares with respect to dividend rights, rights of liquidation, winding-up, or dissolution of the Company and junior to all of the Company's existing and future policyholder obligations and debt obligations. Without the consent of the holders of the Series B preference shares, the Company may not issue any class or series of shares that rank senior or pari passu with the Series B preference shares as to the payment of dividends or as to distribution of assets upon any voluntary or involuntary liquidation, winding-up or dissolution of the Company, if the aggregate gross proceeds from the issuance of all such senior or pari passu shares equals or exceeds $100 million.

The Company adjusts the carrying value of the Series B preference shares to equal the redemption value at the end of each reporting period. At March 31, 2019 and December 31, 2018, the balance of the Series B preference shares was $240.6 million and $232.2 million, respectively.

Series A Redeemable Preference Shares

In connection with the acquisition of IMG, the Company issued mandatorily convertible stock in the form of Series A redeemable preference shares as a portion of the consideration paid. The Company issued 100,000 of the 150,000 authorized Series A redeemable preference shares to the seller of IMG. Each Series A redeemable preference share has a liquidation preference per share of $1,000.

39

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

On November 5, 2018, in connection with the closing of the Merger, the Company redeemed the 100,000 outstanding shares of Series A redeemable preference shares for $95.0 million. Sirius Group recorded a $13.8 million gain on the redemption of the Series A redeemable preference shares.

Non-controlling interests

Non-controlling interests consist of the ownership interests of non-controlling shareholders in consolidated entities and are presented separately on the balance sheet. At March 31, 2019 and December 31, 2018 Sirius Group's balance sheet included $2.2 million and $1.7 million, respectively, in non-controlling interests.

The following tables show the change in non-controlling interest for the three months ended March 31, 2019 and 2018:

(Millions)		Total
Non-controlling interests as of December 31, 2018	$	1.7
Net income attributable to non-controlling interests		0.4
Other, net		0.1
Non-controlling interests as of March 31, 2019	$	2.2

(Millions)		Total
Non-controlling interests as of December 31, 2017	$	0.2
Net income attributable to non-controlling interests		0.2
Other, net		0.1
Non-controlling interests as of March 31, 2018	$	0.5

Alstead Re

As of March 31, 2019 and December 31, 2018, Sirius Group recorded non-controlling interest of $2.1 million and $1.7 million, respectively, in Alstead Re Insurance Company ("Alstead Re"). (See Note 16.)

Note 14. Earnings per share

Basic earnings per share is computed by dividing net income available to Sirius Group common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) available to Sirius Group common shareholders on a diluted basis by the weighted-average number of common shares outstanding adjusted to give effect to potentially dilutive securities.

The Series B preference shares and the Series A redeemable preference shares both qualify as participating securities, which requires the application of the two-class method to compute both basic and diluted earnings per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common shareholders. The Series B preference shares and the Series A redeemable preference shares have no obligation to absorb losses of the Company in periods of net loss.

40

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended March 31, 2019 and 2018:

		For the three months ended March 31,
(Millions, except share and per share information)		2019			2018
Basic earnings per share
Numerator:
Net income	$	104.1		$	43.3
Less: Income attributable to non-controlling interests		(0.4	)		(0.2	)
Less: Change in carrying value of Series B preference shares		(8.4	)		-
Less: Accrued dividends on Series A redeemable preference shares		-			(2.6	)
Net income available for dividends out of undistributed earnings	$	95.3		$	40.5
Less: Earnings attributable to Series B preference shares		(8.9	)		-
Less: Earnings attributable to Series A redeemable preference shares		-			(1.7	)
Net income available to Sirius Group common shareholders	$	86.4		$	38.8
Denominator:
Weighted average shares outstanding for basic earnings per share		115,182,331			120,000,000
Basic earnings per share	$	0.75		$	0.32
Diluted earnings per share
Numerator:
Net income available to Sirius Group common shareholders	$	86.4		$	38.8
Add: Change in carrying value of Series B preference shares		8.4			-
Net income available to Sirius Group common shareholders on a diluted basis	$	94.8		$	38.8
Denominator:
Weighted average shares outstanding for basic earnings per share		115,182,331			120,000,000
Add: Series B preference shares		11,901,670			-
Add: Unvested performance share units and restricted share units		251,313			-
Weighted average shares outstanding for diluted earnings per share(1)		127,335,314			120,000,000
Diluted earnings per share	$	0.74		$	0.32

(1)As at March 31, 2019, there were a total of 19,510,830 of potentially dilutive securities excluded from the calculation of Diluted earnings per share. As at March 31, 2018, there were no potentially dilutive securities excluded from the calculation of Diluted earnings per share.

Note 15. Investments in unconsolidated entities

Sirius Group's investments in unconsolidated entities are included within Other long-term investments and consist of investments in common equity securities or similar instruments, which give Sirius Group the ability to exert significant influence over the investee's operating and financial policies ("equity method eligible unconsolidated entities"). Such investments may be accounted for under either the equity method or, alternatively, Sirius Group may elect to account for them under the fair value option.

41

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

The following table presents the components of Other long-term investments as of March 31, 2019 and December 31, 2018:

(Millions)	March 31, 2019		December 31, 2018
Equity method eligible unconsolidated entities, at fair value	$	167.5	$	169.4
Other unconsolidated investments, at fair value(1)	222.2		195.6
Total Other long-term investments(2)	$	389.7	$	365.0

⁽¹⁾Includes Other long-term investments that are not equity method eligible.

⁽²⁾There were no investments accounted for using the equity method as of March 31, 2019 and December 31, 2018.

Equity method eligible unconsolidated entities, at fair value

Sirius Group has elected the fair value option to account for its equity method eligible investments accounted for as part of Other long-term investments for consistency of presentation with the rest of its investment portfolio. The following table presents Sirius Group's investments in equity method eligible unconsolidated entities as of March 31, 2019 and December 31, 2018 with ownership interest greater than 20%:

	Ownership interest at
Investee	March 31, 2019		December 31, 2018		Instrument Held
BE Reinsurance Limited	25.0	%	25.0	%	Common shares
BioVentures Investors (Offshore) IV LP	73.0	%	73.0	%	Units
Camden Partners Strategic Fund V (Cayman), LP	39.4	%	36.4	%	Units
NEC Cypress Buyer LLC	23.5	%	13.3	%	Units
New Energy Capital Infrastructure Credit Fund LP(1)	18.3	%	22.9	%	Units
New Energy Capital Infrastructure Offshore Credit Fund LP(1)	12.2	%	54.9	%	Units
Scion G7, LP	28.3	%	28.8	%	Units
Tuckerman Capital V LP	48.3	%	47.6	%	Units
Tuckerman Capital V Co-Investment I LP	49.5	%	47.7	%	Units

⁽¹⁾The ownership percentage of New Energy Capital Infrastructure Credit Fund LP and New Energy Capital Infrastructure Offshore Credit Fund LP was greater than 20% at December 31, 2018 but was less than 20% at March 31, 2019 and is included in the table for comparative purposes.

Note 16. Variable interest entities

Sirius Group consolidates the results of operations and financial position of every voting interest entity ("VOE") in which it has a controlling financial interest and VIEs in which it is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VOE or VIE, depends on the facts and circumstances surrounding each entity.

42

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Sirius Group has determined that Alstead Re is a VIE for which Sirius Group is the primary beneficiary and is required to consolidate it. The following table presents Alstead Re's assets and liabilities, as classified in the Consolidated Balance Sheets as at March 31, 2019 and December 31, 2018:

(Millions)	March 31, 2019		December 31, 2018
Assets:
Fixed maturity investments, trading at fair value	$	3.9	$	4.0
Short-term investments, at fair value	0.4		0.3
Cash	0.2		0.2
Total investments	4.5		4.5
Insurance and reinsurance premiums receivable	1.5		0.1
Funds held by ceding companies	4.7		3.7
Deferred acquisition costs	0.5		5.2
Other assets	0.1		0.9
Total assets	$	11.3	$	14.4
Liabilities
Loss and loss adjustment expense reserves	$	3.0	$	4.6
Unearned insurance and reinsurance premiums	1.7		3.7
Other liabilities	0.1		-
Total liabilities	$	4.8	$	8.3

Sirius Group is a passive investor in certain third-party-managed hedge and private equity funds, some of which are VIEs. Sirius Group is not involved in the design or establishment of these VIEs, nor does it actively participate in the management of the VIEs. The exposure to loss from these investments is limited to the carrying value of the investments at the balance sheet date.

Sirius Group calculates maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of VIE assets or liabilities where Sirius Group has also provided credit protection to the VIE with the VIE as the referenced obligation, and (iii) other commitments and guarantees to the VIE. Sirius Group does not have any VIEs that it sponsors nor any VIEs where it has recourse to it or has provided a guarantee to the VIE interest holders.

The following table presents total assets of unconsolidated VIEs in which Sirius Group holds a variable interest, as well as the maximum exposure to loss associated with these VIEs:

			Maximum Exposure to Loss
(Millions)	Total VIE Assets		On-Balance Sheet		Off-Balance Sheet		Total
March 31, 2019
Other long-term investments(1)	$	220.6	$	118.5	$	25.3	$	143.8
Total at March 31, 2019	$	220.6	$	118.5	$	25.3	$	143.8
December 31, 2018
Other long-term investments(1)	$	209.1	$	103.1	$	32.0	$	135.1
Total at December 31, 2018	$	209.1	$	103.1	$	32.0	$	135.1

⁽¹⁾Comprised primarily of hedge funds and private equity funds.

43

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

Note 17. Transactions with related parties

(Re)insurance contracts

In the normal course of business, Sirius Group enters into insurance and reinsurance contracts with certain of its insurance and MGU affiliates, or their subsidiaries. During the three months ended March 31, 2019 and 2018, these contracts resulted in gross written premiums of $24.1 million and $19.3 million, respectively. As at March 31, 2019 and December 31, 2018, Sirius Group had total receivables due from affiliates of $19.4 million and 14.3 million, respectively. As at March 31, 2019, Sirius Group had total payables due to affiliates of $0.7 million. As at December 31, 2018 Sirius Group did not have any payables due to affiliates.

Other

Meyer "Sandy" Frucher is the Company's Interim Chairman of the board of directors and is also Vice Chairman of Nasdaq, Inc. The Company is traded on the Nasdaq Global Select Market and has business transactions that are related to its listing on the exchange under the normal course of business. (See Note 3.)

Note 18. Commitments and contingencies

Legal Proceedings

Sirius Group, and the insurance and reinsurance industry in general, are routinely subject to claims related litigation and arbitration in the normal course of business, as well as litigation and arbitration that do not arise from, or are directly related to, claims activity. Sirius Group estimates of the costs of settling matters routinely encountered in claims activity are reflected in the reserves for unpaid loss and LAE. (See Note 5.)

Sirius Group considers the requirements of ASC 450, Contingencies ("ASC 450"), when evaluating its exposure to non-claims related litigation and arbitration. ASC 450 requires that accruals be established for litigation and arbitration if it is probable that a loss has been incurred and it can be reasonably estimated. ASC 450 also requires that litigation and arbitration be disclosed if it is probable that a loss has been incurred or it there is a reasonable possibility that a loss may have been incurred.

Leases

Sirius Group leases office space and equipment under various noncancellable operating lease agreements. The average life of the office leases is 7 years and the equipment leases is 3 years.

During the three months ended March 31, 2019, Sirius Group recognized operating lease expense of $2.6 million, including property taxes and routine maintenance expense as well as rental expenses related to short term leases. As at March 31, 2019, Sirius Group had $32.0 million operating lease right-of-use assets included in Other assets. As at March 31, 2019, Sirius Group had $33.9 million operating lease liability included in Other liabilities.

The following table presents the lease balances within the Consolidated Balance Sheets as at March 31, 2019:

(millions)	Balance Sheet Classification		March 31, 2019
Operating lease right-of-use assets	Other assets	$	32.0
Current lease liabilities	Other liabilities	$	9.8
Non-current lease liabilities	Other liabilities	$	24.1

44

Sirius International Insurance Group, Ltd.
Notes to Consolidated Financial Statements
Unaudited

The following table presents weighted average remaining lease term and weighted average discount rate as at March 31, 2019:

Weighted average lease term (years) as at March 31, 2019:
Leased offices	7.0 years
Leased equipment	3.0 years
Weighted average discount rate:
Leased offices	3.8%
Leased equipment	3.4%

The following table presents future annual minimum rental payments required under non-cancellable leases and the present value discount to arrive at total lease liability as at March 31, 2019:

(Millions)		Future Payments
2019	$	7.7
2020		8.9
2021		7.4
2022		6.6
2023		4.2
2024 and after		2.0
Total future annual minimum rental payments as at March 31, 2019		36.8
Less: present value discount		(2.9	)
Total lease liability as at March 31, 2019	$	33.9

As of March 31, 2019, the Company's future operating lease obligations that have not yet commenced are immaterial.

45

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management's discussion and analysis ("MD&A") of the Company's unaudited consolidated results of operations for the three months ended March 31, 2019 and 2018 and the Company's consolidated financial condition, liquidity and capital resources as of March 31, 2019 and December 31, 2018. This discussion and analysis should be read in conjunction with our historical consolidated financial statements and the related notes appearing in our annual Report on Form 10-K for the year ended December 31, 2018 (our "2018 Annual Report"), filed with the Securities and Exchange Commission ("SEC") on March 14, 2019, and the Company's Unaudited Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP").

The following MD&A includes forward-looking statements, which are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed or implied by our forward-looking statements. See "Cautionary Note Regarding Forward-Looking Statements".

INDEX TO MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

	Page
Overview	46
Executive Summary	47
Consolidated Results of Operations – Three Months Ended March 31, 2019 and 2018	49
Summary of Investment Results	51
Foreign Currency Translation	53
Results of Reportable Segments
Global Property	55
Global A&H	57
Specialty & Casualty	58
Runoff & Other	60
Reinsurance Protection	61
Non-GAAP Financial Measures	62
Liquidity and Capital Resources	63
Off Balance Sheet Arrangements	68
Contractual Obligations and Commitments	68
Cash Flows	68
Summary of Critical Accounting Estimates	69

Overview

Sirius Group is a Bermuda exempted company whose principal businesses are conducted through its insurance and reinsurance subsidiaries and other affiliates. Sirius Group's subsidiaries, including Sirius Bermuda Insurance Company Ltd. ("Sirius Bermuda"), Sirius International Insurance Corporation ("Sirius International"), Sirius America Insurance Company ("Sirius America") and Lloyd's Syndicate 1945 ("Syndicate 1945"), provide insurance, reinsurance and insurance services on a worldwide basis. Sirius Group writes treaty and facultative reinsurance, as well as primary insurance. In recent years, Sirius Group expanded its accident and health primary business capabilities in the U.S. via the acquisitions of International Medical Group Acquisition, Inc. ("IMG") and ArmadaCorp Capital, LLC ("Armada") in 2017. In addition to growing in accident and health insurance, Sirius Group further expanded its primary insurance platform launching its primary Surety and Environmental insurance platforms in the U.S. in late 2017. In mid-2018, Sirius Group began writing primary Casualty insurance through Pie Insurance Holdings, Inc. ("Pie Insurance"), a start-up specializing in a data driven approach to workers compensation insurance. Sirius Group also has a minority investment in Pie Insurance and carrier relationship. In addition to these primary insurance platforms, Sirius Group re-entered the U.S. Casualty reinsurance market in early 2017.

46

Reportable Segments

Sirius Group provides insurance and reinsurance products for property lines and agriculture ("Global Property"), accident and health ("Global A&H") and specialty lines including Aviation & Space, Marine, Trade Credit, Contingency, Casualty, Surety, and Environmental ("Specialty & Casualty"), which together with Runoff & Other, constitute its four reportable segments.

•

Global Property—The Global Property segment consists of Sirius Group's underwriting lines of business which offer other property insurance and reinsurance, property catastrophe excess reinsurance and agriculture reinsurance on a worldwide basis.

•

Global A&H—The Global A&H segment consists of Sirius Group's Global A&H insurance and reinsurance underwriting unit along with two managing general underwriters ("MGUs") (IMG and Armada). As part of Global A&H, Sirius Group provides supplemental healthcare and medical travel insurance products as well as related administration services through its MGU subsidiaries.

•

Specialty & Casualty—The Specialty & Casualty segment offers insurance and reinsurance specialty & casualty product lines on a worldwide basis. Specialty lines represent unique risks where the more difficult and unusual risks are underwritten. Because specialty lines tend to be the more unusual or high risks, much of the market is characterized by a higher degree of specialization. Specialty & Casualty consists of Aviation & Space, Marine, Trade Credit, Contingency, Casualty, Surety, and Environmental specialty lines.

•

Runoff & Other—The Runoff & Other segment consists of asbestos risks, environmental risks and other long-tailed liability exposures, in addition to results from Sirius Global Solutions Holding Company ("Sirius Global Solutions"), which specializes in the acquisition and management of runoff liabilities for insurance and reinsurance companies, both in the U.S. and internationally.

Executive Summary

Three Months Ended March 31, 2019 and 2018

Sirius Group ended the first quarter of 2019 with net income attributable to common shareholders of $95 million and basic earnings per common share of $0.75. This compares to net income attributable to common shareholders of $41 million and basic earnings per common share of $0.32 for the three months ended March 31, 2018. The increase was primarily due to higher net realized and unrealized investment gains. The three months ended March 31, 2019 results included $17 million of net unfavorable prior year loss reserve development compared to $3 million of net favorable prior year loss reserve development for the three months ended March 31, 2018. During the three months ended March 31, 2019, Sirius Group recorded catastrophe losses, net of reinsurance and reinstatement premiums, of $2 million compared to $3 million for the three months ended March 31, 2018.

Sirius Group's combined ratio was 91% for the three months ended March 31, 2019 compared to 87% for the three months ended March 31, 2018. The increase in the combined ratio was driven primarily by net unfavorable prior year loss reserve development. The combined ratio for the three months ended March 31, 2019 was impacted by five points of net unfavorable prior year loss reserve development compared to one point of net favorable prior year loss reserve development for the three months ended March 31, 2018. Sirius Group's combined ratio included one point of catastrophe losses for each of the three months ended March 31, 2019 and 2018.

Book Value Per Common Share

Sirius Group ended the first three months of 2019 with book value per common share of $15.38 compared to book value per common share of $14.80 as of December 31, 2018, an increase of 3.9% due to comprehensive income of $76 million recognized for the three months ended March 31, 2019. Total common shareholders' equity at the end of the first quarter of 2019 was $1,773 million compared to $1,704 million as of December 31, 2018.

47

Return on Equity

The return on net income attributable to common shareholders on beginning common shareholders' equity was 5.6% for the three months ended March 31, 2019 compared to 2.1% for the three months ended March 31, 2018 due to the net income recognized.

Adjusted Book Value Per Share

Sirius Group ended the first three months of 2019 with Adjusted book value per share of $15.82 which assumes that the Series B preference shares will convert into common shares on a one-for-one basis, in addition to the effects of share-based compensation programs, compared to $15.24 as of December 31, 2018, an increase of 3.8%, due to the comprehensive income recognized. As of March 31, 2019, Adjusted book value and Adjusted book value per share include the earned effects of share-based compensation awards issued during 2019.

See "Non-GAAP Financial Measures" for an explanation and calculation of Adjusted book value and Adjusted book value per share.

Operating income attributable to common shareholders

For the three months ended March 31, 2019, Operating income attributable to common shareholders was $13 million compared to $31 million for three months ended March 31, 2018, primarily due to lower net underwriting gains, lower net service fee income, and a loss on the change in fair value of weather derivatives.

See "Non-GAAP Financial Measures" for an explanation and calculation of Operating income attributable to common shareholders.

48

Consolidated Results of Operations – Three Months Ended March 31, 2019 and 2018

(Expressed in millions of U.S. dollars, except share and per share information)

		Three Months Ended March 31,
		2019			2018
Revenues
Gross written premiums	$	622.3		$	615.2
Net written premiums	$	484.8		$	469.4
Net earned insurance and reinsurance premiums	$	311.9		$	284.5
Net investment income		20.1			10.8
Net realized investment gains (losses)		9.0			(3.7	)
Net unrealized investment gains		74.0			16.0
Net foreign exchange gains (losses)		5.1			(3.5	)
Other revenue		19.6			23.4
Total revenues		439.7			327.5
Expenses
Loss and loss adjustment expenses ("LAE")		183.9			141.0
Insurance and reinsurance acquisition expenses		63.3			63.0
Other underwriting expenses		35.3			43.2
General and administrative expenses		24.4			14.3
Intangible asset amortization expenses		3.9			3.9
Interest expense on debt		7.6			7.7
Total expenses		318.4			273.1
Pre-tax income		121.3			54.4
Income tax expense		(17.2	)		(11.1	)
Net income		104.1			43.3
Income attributable to non-controlling interests		(0.4	)		(0.2	)
Net income attributable to Sirius Group		103.7			43.1
Change in carrying value of Series B preference shares		(8.4	)		—
Accrued dividends on Series A redeemable preference shares		—			(2.6	)
Net income attributable to Sirius Group's common shareholders	$	95.3		$	40.5
Comprehensive income
Net income	$	104.1		$	43.3
Other comprehensive (loss), net of tax
Change in foreign currency translation, net of tax		(27.8	)		(13.4	)
Total other comprehensive (loss)		(27.8	)		(13.4	)
Comprehensive income		76.3			29.9
Income attributable to non-controlling interests		(0.4	)		(0.2	)
Comprehensive income attributable to Sirius Group	$	75.9		$	29.7
Ratios:
Loss ratio(1)		59.0	%		49.6	%
Acquisition expense ratio(2)		20.3	%		22.1	%
Other underwriting expense ratio(3)		11.3	%		15.2	%
Combined ratio(4)		90.6	%		86.9	%
Selected financial data:
Basic earnings per common share and common shares equivalent	$	0.75		$	0.32
Diluted earnings per common share and common shares equivalent	$	0.74		$	0.32
Basic weighted average number of common shares and common share equivalents outstanding		115,182,331			120,000,000
Diluted weighted average number of common shares and common share equivalents outstanding		127,335,314			120,000,000
Return on equity(5)		5.6	%		2.1	%
Operating income attributable to common shareholders(6)	$	12.9		$	30.9

⁽¹⁾ The loss ratio is calculated by dividing loss and LAE expenses by net earned insurance and reinsurance premiums.

49

⁽²⁾ The acquisition expense ratio is calculated by dividing insurance and reinsurance acquisition expenses by net earned insurance and reinsurance premiums.

⁽³⁾ The other underwriting expense ratio is calculated by dividing other underwriting expenses by net earned insurance and reinsurance premiums.

⁽⁴⁾ The combined ratio is calculated by combining the loss ratio, the acquisition expense ratio, and the other underwriting expense ratio.

⁽⁵⁾ Return on equity is calculated by dividing net income attributable to Sirius Group's common shareholders for the period by the beginning common shareholders' equity.

⁽⁶⁾ Operating income attributable to common shareholders is a non-GAAP financial measure. See "Non-GAAP Financial Measures" for an explanation and calculation of Operating income attributable to common shareholders.

	As of March 31, 2019		As of December 31, 2018
Selected balance sheet data:
Common shares outstanding		115,262,303		115,151,251
Series B preference shares outstanding		11,901,670		11,901,670
Earned share-based compensation awards, excluding stock options		95,541		-
Earned portion of Stock option awards issued		38,193		-
Adjusted shares outstanding(1)		127,297,707		127,052,921
Total common shareholders' equity	$	1,773.0	$	1,704.5
Series B preference shares		240.6		232.2
Earned portion of future proceeds from stock option awards		0.5		-
Adjusted book value(1)	$	2,014.1	$	1,936.7
Book value per common share	$	15.38	$	14.80
Adjusted book value per share(1)	$	15.82	$	15.24

⁽¹⁾Adjusted shares outstanding, Adjusted book value, and Adjusted book value per share are non-GAAP financial measures. See "Non-GAAP Financial Measures" for an explanation and calculation of Adjusted share outstanding, Adjusted book value, and Adjusted book value per share.

Three Months Ended March 31, 2019 and 2018

Gross written premiums – Gross written premiums for the three months ended March 31, 2019 was $622 million, an increase of $7 million or 1% compared to gross written premiums of $615 million for the three months ended March 31, 2018, with Global A&H up 16%, Specialty & Casualty up 4%, and Global Property down 5%. See "Results of reportable segments" below.

Net written premiums – Net written premiums for the three months ended March 31, 2019 was $485 million, an increase of $16 million or 3% compared to net written premiums of $469 million for the three months ended March 31, 2018, with Global A&H up 16%, Specialty & Casualty up 7%, and Global Property down 2%. See "Results of reportable segments" below.

Net earned insurance and reinsurance premiums – Net earned insurance and reinsurance premiums for the three months ended March 31, 2019 was $312 million, an increase of $27 million or 9% compared to net earned insurance and reinsurance premiums of $285 million for the three months ended March 31, 2018, with Specialty & Casualty up 41%, Global A&H up 9%, and Global Property up 3%. See "Results of reportable segments" below.

Net investment income, Net realized investment gains (losses), Net unrealized investment gains and Net foreign exchange gains (losses) – Net investment income increased 82% to $20 million for the three months ended March 31, 2019 from $11 million for the three months ended March 31, 2018 due to a higher interest rate environment. Sirius Group reported net realized investment gains of $9 million for the three months ended March 31, 2019, which included $11 million of net realized foreign currency gains, compared to net realized investment (losses) of $(4) million for the three months ended March 31, 2018, which included $(1) million of net realized foreign currency (losses). Net unrealized investment gains were $74 million for the three months ended March 31, 2019, which included $25 million of net unrealized foreign currency gains, compared to net unrealized investment gains of $16 million for the three months ended March 31, 2018, which included $19 million of net unrealized foreign currency gains. See "Summary of

50

investment results" below. Additionally, Sirius Group recorded $5 million of non-investment related foreign exchange gains for the three months ended March 31, 2019 compared to $(4) million of non-investment related foreign exchange (losses) for the three months ended March 31, 2018. Included in the amount for the three months ended March 31, 2019 is $11 million of favorable currency movement compared to $6 million of favorable currency movement for the three months ended March 31, 2018 on the 2017 SEK Subordinated Notes. See "Foreign currency translation" below.

Other revenue – Other revenue decreased to $20 million for the three months ended March 31, 2019 from $23 million for the three months ended March 31, 2018. The decrease in other revenue was primarily attributable to a $6 million loss on the change in the fair value of weather derivatives, which was partially offset by an increase in service fee revenue in Global A&H.

Loss and loss adjustment expenses – Loss and loss adjustment expenses increased 30% to $184 million for the three months ended March 31, 2019 from $141 million for the three months ended March 31, 2018, primarily due to higher net unfavorable prior year loss reserve development and increased net earned insurance and reinsurance premiums for the three months ended March 31, 2019. See "Results of reportable segments" below.

Insurance and reinsurance acquisition expenses – Insurance and reinsurance acquisition expenses was $63 million for the three months ended March 31, 2019 and 2018 as higher acquisition expenses for Specialty & Casualty were offset by lower acquisition expenses for Global Property and Global A&H, primarily due to business mix. See "Results of reportable segments" below.

Other underwriting expenses – Other underwriting expenses decreased 19% to $35 million for the three months ended March 31, 2019 from $43 million for the three months ended March 31, 2018 primarily due to lower variable incentive compensation expense. In addition, higher operating expenses were included in other underwriting expenses for the MGUs, representing costs associated with the support of the Global A&H underwriting team. See "Results of reportable segments" below.

General and administrative expenses – General and administrative expenses increased 71% to $24 million for the three months ended March 31, 2019 from $14 million for the three months ended March 31, 2018 primarily due to an increase in expenses related to IMG and Armada.

Summary of Investment Results

Pre-Tax return on investments

Total return on investments includes investment income, net realized gains and losses and the change in unrealized gains and losses generated by the investment portfolio including equity method investments for which we have made fair value election and net income or loss in investments in unconsolidated affiliates. Total return is calculated on a pre-tax basis and includes the impact of investment related foreign exchange gains or losses whether reflected in pre-tax income or other comprehensive income, unless otherwise noted. Returns are calculated on average investments for the period displayed and presented gross of separately managed account fees as well as internal expenses in order to produce a better comparison to benchmark returns which exclude an expense load.

Sirius Group maintains an equity portfolio that consists of equity securities, and other long-term investments, including hedge funds, private equity funds and direct investments in privately held common equity securities investments. From time to time, Sirius may also invest in exchange-traded funds ("ETFs") and mutual funds. For return purposes, investments in fixed-income ETFs and mutual funds are included in the fixed income results and excluded from equity portfolio results. Returns exclude the impact of third-party currency forwards and/or swaps.

51

A summary of Sirius Group's total pre-tax net investment results and performance metrics for the three months ended March 31, 2019 and 2018 follows:

		For the Three Months Ended March 31,
(Millions)		2019			2018
Pre-tax investment results
Net investment income	$	20.1		$	10.8
Net realized and unrealized investment gains(1)		83.0			12.3
Change in foreign currency translation on investments recognized through other comprehensive income(2)		(41.7	)		(16.9	)
Net pre-tax investment gains	$	61.4		$	6.2

⁽¹⁾ Includes foreign exchange gains for the three months ended March 31, 2019 and 2018 of $35.9 million and $17.8 million, respectively.

⁽²⁾ Excludes non-investment related foreign exchange gains (losses) for the three months ended March 31, 2019 and 2018 of $5.1 million and $(3.5) million, respectively.

	For the Three Months Ended March 31,
	2019		2018
Performance metrics
Total fixed income investment returns:
In U.S. dollars	1.1	%	-0.1	%
In local currencies	1.2	%	0.0	%
Bloomberg Barclays US Agg 1-3 Year Total Return Value Unhedged USD	1.2	%	-0.2	%
OMX Stockholm OMRX Total Bond Index	0.9	%	0.4	%
Total equity securities and other long-term investments returns:
In U.S. dollars	6.0	%	2.1	%
In local currencies	5.9	%	1.7	%
S&P 500 Index (total return)	13.6	%	-0.8	%
Total consolidated portfolio
In U.S. dollars	1.9	%	0.2	%
In local currencies	2.0	%	0.2	%

Three months ended March 31, 2019 and 2018

Sirius Group's pre-tax total gross return on invested assets was 1.9% for the three months ended March 31, 2019 compared to 0.2% for the three months ended March 31, 2018. The result for the three months ended March 31, 2019 included foreign currency losses on investments, which decreased the total pre-tax return by 0.1%. The quarterly currency loss was generated mainly from Swedish kronor ("SEK") holdings as the SEK weakened against the U.S. dollar.

Net investment income was $20 million for the three months ended March 31, 2019 compared to $11 million for the three months ended March 31, 2018. The increase was driven by a higher interest rate environment for the three months ended March 31, 2019.

Net realized and unrealized investment gains (losses) on investments, excluding foreign currency, were $47 million for the three months ended March 31, 2019 compared to $(6) million for the three months ended March 31, 2018. The increase was driven by unrealized investment gains consistent with overall market performance.

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Fixed income results (including short-term investments)

As of March 31, 2019, the fixed income portfolio duration was approximately 1.6 years compared to 1.7 years as of December 31, 2018. The average credit quality of the fixed income portfolio, including short-term investments, was AA as of March 31, 2019 and December 31, 2018. As of March 31, 2019 and December 31, 2018, Sirius Group held $369 million and $361 million, respectively, of non-U.S. denominated fixed income securities.

The fixed income portfolio gained 1.1% on a U.S. dollar basis and 1.2% in local currencies for the three months ended March 31, 2019. Our U.S. portfolio returned 1.3% versus the Barclays 1-3 Year Aggregate ("BarcAg1-3") of 1.2%. Our non-U.S. portfolio returned 0.4% in original currencies, which compares to the OMX Stockholm OMRX Total Return Bond Index ("OMRX") of 0.9%.

Fixed income markets globally struggled for the three months ended March 31, 2018. The fixed income portfolio returned (0.1)% for the three months ended March 31, 2018 on a U.S. dollar basis and 0.0% in local currencies. Our U.S. portfolio returned 0.0% versus the BarcAg1-3 of (0.2%). Our non-U.S. portfolio returned 0.2% in original currencies which compared to the OMRX of 0.4%.

Equity securities and other long-term investments results

As of March 31, 2019, the equity and other long-term investments portfolio included $454 million of U.S. dollar and $170 million of non-U.S. dollar denominated securities.

For the three-months ended March 31, 2019, the equity portfolio gained 6.0% on a U.S. dollar basis and 5.9% on a local currency basis. The S&P 500 gained 13.6% for the same period. Performance lagged the S&P 500 in the first quarter of 2019 given the performance of our private equity investments that are in the early stages of the investment period.

As of March 31, 2018, the equity and other long-term investments portfolio included $439 million of U.S. dollar and $149 million of non-U.S. dollar denominated securities.

For the three-months ended March 31, 2018, the equity portfolio returned 2.1% on a U.S. dollar basis and 1.7% in local currencies. The S&P 500 lost 0.8% for the same period.

Foreign Currency Translation

Impact of foreign currency translation

The U.S. dollar is the functional currency for Sirius Group's businesses except for Sirius International, Syndicate 1945, several subsidiaries of IMG, and the Canadian reinsurance operations of Sirius America. Sirius Group also invests in securities denominated in foreign currencies. Assets and liabilities recorded in these foreign currencies are translated into U.S. dollars at exchange rates in effect at the balance sheet date, and revenues and expenses are converted using the average exchange rates for the period. Net foreign exchange gains and losses arising from the translation of functional currencies into U.S. dollars are reported in common shareholders' equity and in Other comprehensive (loss). As of March 31, 2019 and December 31, 2018, Sirius Group had net unrealized foreign currency translation (losses) of $(230) million and $(202) million, respectively, recorded in Accumulated other comprehensive (loss) on its Consolidated Balance Sheets.

Assets and liabilities relating to foreign operations are remeasured into the functional currency using current exchange rates; revenues and expenses are remeasured into the functional currency using the weighted average exchange rate for the period. The resulting exchange gains and losses are reported as a component of net income in the period in which they arise within Net realized investment gains (losses), Net unrealized investment gains, and Net foreign exchange gains (losses).

53

The following rates of exchange for the U.S. dollar have been used for translation of assets and liabilities whose functional currency is not the U.S. dollar as of March 31, 2019 and December 31, 2018:

Currency	Closing Rate March 31, 2019	Closing Rate December 31, 2018
Swedish kronor	9.2710	8.9397
British pound	0.7692	0.7850
Euro	0.8906	0.8734
Canadian dollar	1.3359	1.3614

Sirius International holds a large portfolio of investments that are denominated in U.S. dollars, but its functional currency is the SEK. When Sirius International prepares its stand-alone GAAP financial statements, it remeasures its U.S. dollar-denominated investments to SEK and recognizes the related foreign currency remeasurement gains or losses through pre-tax income. When Sirius Group consolidates Sirius International, it translates Sirius International's stand-alone GAAP financial statements to U.S. dollars and recognizes the related foreign currency translation gains or losses through other comprehensive income (loss). Since Sirius Group reports its financial statements in U.S. dollars, there is no net effect to book value per common share or to investment returns from foreign currency translation on its U.S. dollar-denominated investments at Sirius International. However, net realized and unrealized investment gains (losses), other revenues, net income (loss), earnings per share, and other comprehensive income (loss) can be significantly affected during periods of high volatility in the foreign exchange rate between the U.S. dollar and other currencies, especially the SEK.

A summary of the impact of foreign currency translation on Sirius Group's consolidated financial results for the three months ended March 31, 2019 and 2018 was as follows:

		Three Months Ended March 31,
(Millions)		2019			2018
Net realized investment gains (losses) - foreign currency(1)	$	10.9		$	(1.1	)
Net unrealized investment gains - foreign currency(2)		25.0			18.9
Net realized and unrealized investment gains - foreign currency		35.9			17.8
Net foreign exchange gains (losses) - foreign currency translation gains (losses)(3)		4.1			(2.1	)
Net foreign exchange gains (losses) - currency swaps(3)		1.0			(1.3	)
Net foreign exchange (losses) - other(3)		-			(0.1	)
Income tax (benefit)		(0.2	)		(0.5	)
Total foreign currency remeasurement gains recognized through net income, after tax		40.8			13.8
Change in foreign currency translation on investments recognized through other comprehensive (loss), after tax		(41.7	)		(20.4	)
Change in foreign currency translation on non-investment net liabilities recognized through other comprehensive (loss), after tax		13.9			7.0
Total foreign currency translation (losses) recognized through other comprehensive (loss), after tax		(27.8	)		(13.4	)
Total foreign currency gains recognized in comprehensive income, after tax	$	13.0		$	0.4

⁽¹⁾ Component of Net realized investment gains (losses) on the Consolidated Statements of Income

⁽²⁾ Component of Net unrealized investment gains on the Consolidated Statements of Income

⁽³⁾ Component of Net foreign exchange gains (losses) on the Consolidated Statements of Income

As of March 31, 2019, the following currencies represented the largest exposure to foreign currency risk as a percentage of Sirius Group's common shareholders' equity: the SEK 5% (short) and the Australian dollar 1% (long). As of December 31, 2018, the following currencies represented the largest exposure to foreign currency risk as a percentage of Sirius Group's common shareholders' equity: the SEK 13% (short) and the Israeli shekel 4% (long).

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Investment portfolio composition by currency

As of March 31, 2019 and December 31, 2018, Sirius Group's investment portfolio included approximately $495 million and $468 million of non-U.S. dollar denominated investments, most of which is denominated in SEK, EUR, CAD, NIS, and GBP. The investment values in this portfolio are impacted by changes in the exchange rate between the U.S. dollar and those currencies.

Set forth below is the carrying value of our investment holdings in U.S. dollars and foreign currencies as of March 31, 2019 and December 31, 2018:

	Carrying Value at March 31, 2019			Carrying Value at December 31, 2018
Currency (Millions)	Local Currency		USD	Local Currency		USD
U.S. dollar	2,969.0	$	2,969.0	2,941.6	$	2,941.6
Swedish kronor	1,408.3		151.9	1,348.1		150.8
Euro	101.6		114.1	105.2		120.5
Canadian dollar	86.7		65.1	84.0		61.7
Israeli shekel	230.5		63.5	232.7		62.1
British pound	6.4		8.3	8.2		10.4
Other	-		92.2	-		62.6
Total investments		$	3,464.1		$	3,409.7

Results of Reportable Segments

Global Property

Global Property consists of Sirius Group's underwriting lines of business which offer other property insurance and reinsurance, property catastrophe excess reinsurance, and agriculture reinsurance on a worldwide basis.

		Three months ended March 31,
Global Property (Millions)		2019			2018
Gross written premiums	$	330.7		$	346.6
Net written premiums		241.3			247.2
Net earned insurance and reinsurance premiums		139.7			136.1
Loss and allocated LAE		(62.6	)		(70.4	)
Insurance and reinsurance acquisition expenses		(25.8	)		(29.3	)
Technical profit	$	51.3		$	36.4
Unallocated LAE		(2.1	)		(1.9	)
Other underwriting expenses		(16.2	)		(17.4	)
Underwriting income	$	33.0		$	17.1
Ratios:
Loss ratio(1)		46.3	%		53.1	%
Acquisition expense ratio(2)		18.5	%		21.5	%
Other underwriting expense ratio(3)		11.6	%		12.8	%
Combined ratio(4)		76.4	%		87.4	%

⁽¹⁾ The loss ratio is calculated by dividing the sum of loss and allocated LAE and Unallocated LAE expenses by net earned insurance and reinsurance premiums.

⁽²⁾ The acquisition expense ratio is calculated by dividing insurance and reinsurance acquisition expenses by net earned insurance and reinsurance premiums.

⁽³⁾ The other underwriting expense ratio is calculated by dividing other underwriting expenses by net earned insurance and reinsurance premiums.

⁽⁴⁾ The combined ratio is calculated by combining the loss ratio, the acquisition expense ratio, and the other underwriting expense ratio.

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Three months ended March 31, 2019 and 2018

Gross written premiums decreased 5% to $331 million for the three months ended March 31, 2019 from $347 million for the three months ended March 31, 2018, due primarily to a decrease in Other Property ($20 million) from reductions in treaty participations and the non-renewal of certain accounts due to underwriting performance. These decreases were partially offset by an increase in premiums from a fronting arrangement ($17 million), which records offsetting gross and ceded loss and commission results, less a margin to Sirius Group. Net written premiums decreased 2% to $241 million for the three months ended March 31, 2019 from $247 million for the three months ended March 31, 2018, due to a decrease in Other Property ($28 million) for the reasons mentioned above. The Other Property fronting arrangement did not significantly impact Global Property's net written or earned insurance and reinsurance premiums for either the 2019 or 2018 periods.

Global Property produced a net combined ratio of 76% for the three months ended March 31, 2019 compared to 87% for the three months ended March 31, 2018. The decrease in the combined ratio was driven primarily by a decrease in net unfavorable prior year loss reserve development and lower net commissions, primarily due to business mix.

Global Property recorded underwriting income of $33 million and $17 million for the three month periods ended March 31, 2019 and 2018, respectively. The three months ended March 31, 2019 included $2 million (1 point) of catastrophe losses compared to $3 million (2 points) for the three months ended March 31, 2018. Net unfavorable prior year loss reserve development was $12 million (9 points) for the three months ended March 31, 2019 compared to $17 million (13 points) of net unfavorable prior year loss reserve development for the three months ended March 31, 2018. For the three months ended March 31, 2019, unfavorable prior year loss reserve development in Other Property ($26 million) was partially offset by favorable loss reserve development in Property Catastrophe Excess ($11 million) and Agriculture ($4 million). The unfavorable prior year loss reserve development in Global Property was driven by higher than expected loss reporting from recent accident years, including $16 million from prior year catastrophe events, mainly Hurricanes Irma, Michael, and Florence. A portion of this unfavorable loss reserve development is due to projected increased costs for claims adjusting associated with insureds' assignment of benefits to third parties, primarily associated with Hurricanes lrma and Michael exposures. For the three months ended March 31, 2018, unfavorable prior year loss reserve development was recorded in Other Property ($12 million) and Property Catastrophe Excess ($6 million).

Global Property gross written premiums

		Three months ended March 31,
Global Property (Millions)		2019		2018
Property catastrophe excess	$	165.3	$	166.6
Other property		152.8		172.7
Agriculture		12.6		7.3
Total	$	330.7	$	346.6

Three months ended March 31, 2019 and 2018

Gross written premiums decreased 5% to $331 million for the three months ended March 31, 2019 from $347 million for the three months ended March 31, 2018, from reductions in treaty participations and the non-renewal of certain accounts due to underwriting performance.

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Global Property net earned insurance and reinsurance premiums

		Three months ended March 31,
Global Property (Millions)		2019		2018
Other property	$	90.4	$	93.3
Property catastrophe excess		44.1		42.4
Agriculture		5.2		0.4
Total	$	139.7	$	136.1

Three months ended March 31, 2019 and 2018

Net earned insurance and reinsurance premiums increased 3% to $140 million for the three months ended March 31, 2019 from $136 million for the three months ended March 31, 2018. The Other Property fronting arrangement did not significantly impact Global Property's net earned insurance and reinsurance premiums for either the 2019 or 2018 periods.

Global A&H

Global A&H consists of Sirius Group's Global A&H insurance and reinsurance underwriting unit along with two MGUs (IMG and Armada).

		Three months ended March 31,
Global A&H (Millions)		2019			2018
Gross written premiums	$	169.3		$	145.6
Net written premiums		134.9			115.5
Net earned insurance and reinsurance premiums		96.1			88.0
Loss and allocated LAE		(63.2	)		(45.8	)
Insurance and reinsurance acquisition expenses		(26.6	)		(29.2	)
Technical profit	$	6.3		$	13.0
Unallocated LAE		(1.5	)		(1.6	)
Other underwriting expenses		(6.1	)		(8.0	)
Underwriting (loss) income	$	(1.3	)	$	3.4
Service fee revenue		36.3			32.8
MGU unallocated LAE		(4.1	)		-
MGU other underwriting expenses		(2.7	)		(8.4	)
MGU general and administrative expenses		(16.2	)		(9.5	)
Underwriting income, including net service fee income	$	12.0		$	18.3
Ratios:
Loss ratio(1)		67.3	%		53.9	%
Acquisition expense ratio(2)		27.7	%		33.2	%
Other underwriting expense ratio(3)		6.3	%		9.1	%
Combined ratio(4)		101.3	%		96.2	%

⁽¹⁾The loss ratio is calculated by dividing the sum of loss and allocated LAE and Unallocated LAE expenses by net earned insurance and reinsurance premiums.

⁽²⁾The acquisition expense ratio is calculated by dividing insurance and reinsurance acquisition expenses by net earned insurance and reinsurance premiums.

⁽³⁾The other underwriting expense ratio is calculated by dividing other underwriting expenses by net earned insurance and reinsurance premiums.

⁽⁴⁾The combined ratio is calculated by combining the loss ratio, the acquisition expense ratio, and the other underwriting expense ratio.

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Three months ended March 31, 2019 and 2018

Gross written premiums increased 16% to $169 million for the three months ended March 31, 2019 from $146 million for the three months ended March 31, 2018, due to higher primary insurance writings, for risks primarily originating from the U.S. Net written premiums increased 16% to $135 million for the three months ended March 31, 2019 from $116 million for the three months ended March 31, 2018 due to the same reason.

Global A&H produced a net combined ratio of 101% for the three months ended March 31, 2019 compared to 96% for the three months ended March 31, 2018. The increase in the net combined ratio was due to net unfavorable prior year loss reserve development of $5 million (5 points) for the three months ended March 31, 2019 compared to $4 million (5 points) of net favorable prior year loss reserve development for the three months ended March 31, 2018. The net unfavorable loss reserve development recorded for the three months ended March 31, 2019 was due to higher than expected claims activity. The decrease in the acquisition expense ratio from the prior period was due to business mix as increased primary insurance writings, for risks originating from the U.S., are recorded at lower net commission ratios.

Underwriting income, including net service fee income, for Global A&H was $12 million for the three months ended March 31, 2019, compared to $18 million for the three months ended March 31, 2018. The decrease was driven primarily by the higher net unfavorable prior year loss reserve development recorded for the three months ended March 31, 2019.

Specialty & Casualty

Specialty & Casualty consists of Sirius Group's insurance and reinsurance underwriting units which, offer specialty & casualty product lines on a worldwide basis.

		Three months ended March 31,
Specialty & Casualty (Millions)		2019			2018
Gross written premiums	$	120.9		$	115.5
Net written premiums		108.2			100.6
Net earned insurance and reinsurance premiums		75.7			54.4
Loss and allocated LAE		(47.6	)		(21.6	)
Insurance and reinsurance acquisition expenses		(20.5	)		(14.1	)
Technical profit	$	7.6		$	18.7
Unallocated LAE		(1.9	)		(1.2	)
Other underwriting expenses		(8.2	)		(8.0	)
Underwriting (loss) income	$	(2.5	)	$	9.5
Ratios:
Loss ratio(1)		65.4	%		41.9	%
Acquisition expense ratio(2)		27.1	%		25.9	%
Other underwriting expense ratio(3)		10.8	%		14.7	%
Combined ratio(4)		103.3	%		82.5	%

⁽¹⁾The loss ratio is calculated by dividing the sum of loss and allocated LAE and Unallocated LAE expenses by net earned insurance and reinsurance premiums.

⁽²⁾The acquisition expense ratio is calculated by dividing insurance and reinsurance acquisition expenses by net earned insurance and reinsurance premiums.

⁽³⁾The other underwriting expense ratio is calculated by dividing other underwriting expenses by net earned insurance and reinsurance premiums.

⁽⁴⁾The combined ratio is calculated by combining the loss ratio, the acquisition expense ratio, and the other underwriting expense ratio.

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Three months ended March 31, 2019 and 2018

Gross written premiums increased 4% to $121 million for the three months ended March 31, 2019 from $116 million for the three months ended March 31, 2018, due primarily to increases in Casualty ($35 million) and Environmental ($4 million), offset by decreases in Trade Credit ($21 million), Contingency ($5 million), Aviation & Space ($4 million), and Marine ($4 million). Net written premiums increased 7% to $108 million for the three months ended March 31, 2019 from $101 million for the three months ended March 31, 2018, due mainly to the same lines of business as the gross written premiums increase.

Specialty & Casualty produced a net combined ratio of 103% for the three months ended March 31, 2019 compared to 83% for the three months ended March 31, 2018. The higher net combined ratio was due to a higher Loss ratio driven by lower favorable prior year loss reserve development and higher current year losses in Aviation & Space, which included $3 million from the Ethiopian Airlines plane crash.

Specialty & Casualty recorded an underwriting (loss) of $(3) million for the three months ended March 31, 2019 compared to underwriting income of $10 million for the three months ended March 31, 2018. For the three months ended March 31, 2019, Specialty & Casualty had $1 million (1 point) of net favorable prior year loss reserve development. For the three months ended March 31, 2018, Specialty & Casualty had $7 million (13 points) of net favorable prior year loss reserve development, primarily in Aviation & Space ($10 million).

Specialty & Casualty gross written premiums

		Three months ended March 31,
Specialty & Casualty (Millions)		2019		2018
Casualty	$	61.8	$	27.1
Trade Credit		19.7		41.0
Aviation & Space		17.3		21.1
Marine		14.4		17.6
Environmental		4.4		0.4
Contingency		1.7		6.9
Surety		1.6		1.4
Total	$	120.9	$	115.5

Three months ended March 31, 2019 and 2018

Gross written premiums increased 4% to $121 million for the three months ended March 31, 2019 from $116 million for the three months ended March 31, 2018. Increases in gross written premiums were primarily driven by Casualty ($35 million) and Environmental ($4 million), partially offset by decreases in Trade Credit ($21 million), Contingency ($5 million), Aviation & Space ($4 million), and Marine ($4 million). The decrease in Trade Credit was due to the binding of a multi-year treaty in 2018, which did not repeat in 2019.

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Specialty & Casualty net earned insurance and reinsurance premiums

		Three months ended March 31,
Specialty & Casualty (Millions)		2019		2018
Casualty	$	38.4	$	10.7
Aviation & Space		14.6		14.8
Trade Credit		10.8		11.1
Marine		8.5		13.4
Contingency		1.6		4.5
Surety		1.2		(0.1	)
Environmental		0.6		-
Total	$	75.7	$	54.4

Three months ended March 31, 2019 and 2018:

Net earned insurance and reinsurance premiums increased 41% to $76 million for the three months ended March 31, 2019 from $54 million for the three months ended March 31, 2018. Casualty ($27 million) was the main driver for the increase from the prior period.

Runoff & Other

Runoff & Other consists of business related to asbestos and environmental risks and other long-term liability exposures, in addition to results from Sirius Global Solutions, which specializes in the acquisition and management of runoff liabilities for insurance and reinsurance companies both in the U.S. and internationally.

		Three months ended March 31,
Runoff & Other (Millions)		2019			2018
Gross written premiums	$	1.4		$	7.5
Net written premiums		0.4			6.1
Net earned insurance and reinsurance premiums		0.4			6.0
Loss and allocated LAE		(1.1	)		2.4
Insurance and reinsurance acquisition expenses		(0.7	)		(0.7	)
Technical (loss) profit	$	(1.4	)	$	7.7
Unallocated LAE		(0.5	)		(0.9	)
Other underwriting expenses		(2.1	)		(1.4	)
Underwriting (loss) income	$	(4.0	)	$	5.4
General and administrative expenses		(0.8	)		(1.1	)
Underwriting (loss) income, net of service fee income	$	(4.8	)	$	4.3

Three months ended March 31, 2019 and 2018

Runoff & Other recorded $1 million of gross written premiums for the three months ended March 31, 2019 compared to $8 million of gross written premiums for the three months ended March 31, 2018. Gross written premiums for the three months ended March 31, 2018 related primarily to premiums from an assumed loss portfolio transfer that occurred in the first quarter of 2018.

Runoff & Other recorded underwriting (loss) income of $(5) million and $4 million for three months ended March 31, 2019 and 2018, respectively. Runoff & Other recorded $1 million of net unfavorable prior year loss reserve development for the three months ended March 31, 2019 compared to $9 million of net favorable prior year loss reserve development for the three months ended March 31, 2018. The net favorable loss reserve development for the three months ended March 31, 2018 was due primarily to reductions in World Trade center claims in response to revised information received by the Company.

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Reinsurance Protection

The following tables display Sirius Group's underwriting ratios prior to cessions to reinsurers ("Gross"), cessions to reinsurers ("Ceded") and after cessions to reinsurers ("Net") basis.

Three months ended March 31, 2019 and 2018

	Three months ended March 31, 2019
	Global Property	Global A&H	Specialty & Casualty	Total
Gross ratios:
Loss ratio	43.1%	70.5%	61.5%	56.7%
Acquisition expense ratio	22.4%	26.0%	25.2%	21.7%
Other underwriting expense ratio	8.5%	4.7%	10.0%	8.8%
Gross Combined ratio	74.0%	101.2%	96.7%	87.2%
Ceded ratios:
Loss ratio	35.1%	80.1%	13.6%	49.3%
Acquisition expense ratio	32.1%	21.0%	1.4%	26.4%
Ceded Combined ratio	67.2%	101.1%	15.0%	75.7%
Net ratios:
Loss ratio	46.3%	67.3%	65.4%	59.0%
Acquisition expense ratio	18.5%	27.7%	27.1%	20.3%
Other underwriting expense ratio	11.6%	6.3%	10.8%	11.3%
Net Combined ratio	76.4%	101.3%	103.3%	90.6%

Sirius Group's net combined ratio was 4 points higher than the gross combined ratio due to the costs of retrocessional protections with limited ceded loss recoveries for the three months ended March 31, 2019. An Other Property fronting arrangement, which records offsetting gross and ceded loss and commission results, less a margin to Sirius Group, also impacted the gross and ceded loss and commissions for the three months ended March 31, 2019.

	Three months ended March 31, 2018
	Global Property	Global A&H	Specialty & Casualty	Total
Gross ratios:
Loss ratio	50.7%	55.1%	41.8%	49.4%
Acquisition expense ratio	21.0%	30.8%	24.1%	21.4%
Other underwriting expense ratio	9.6%	7.2%	12.9%	9.6%
Gross Combined ratio	81.3%	93.1%	78.8%	80.4%
Ceded ratios:
Loss ratio	43.3%	59.3%	46.8%	49.4%
Acquisition expense ratio	19.3%	22.1%	3.4%	17.9%
Ceded Combined ratio	62.6%	81.4%	50.2%	67.3%
Net ratios:
Loss ratio	53.1%	53.9%	41.9%	49.6%
Acquisition expense ratio	21.5%	33.2%	25.9%	22.1%
Other underwriting expense ratio	12.8%	9.1%	14.7%	15.2%
Net Combined ratio	87.4%	96.2%	82.5%	86.9%

Sirius Group's net combined ratio was 7 points higher than the gross combined ratio for the three months ended March 31, 2018 due to the costs of retrocessional protections with limited ceded loss recoveries and for the three months ended March 31, 2018. An Other Property fronting arrangement, which records offsetting gross and ceded loss and commission results, less a margin to Sirius Group, also impacted the gross and ceded loss and commissions for the three months ended March 31, 2018.

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Non-GAAP Financial Measures

In presenting Sirius Group's results, management has included and discussed the following non-GAAP financial measures: Adjusted book value, Adjusted book value per share and Operating income attributable to common shareholders. The Company believes that these non-GAAP 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 GAAP.

Adjusted book value per share

Adjusted book value and Adjusted book value per share are non-GAAP financial measures used to show the Company's total worth on a per-share basis and is useful to management and investors in analyzing the intrinsic value of the Company.

Adjusted shares outstanding is derived by summing Common shares outstanding, Series B preference shares outstanding (which were issued to the cornerstone investors), 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.

As of March 31, 2019, Adjusted book value and Adjusted 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. 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.

(Expressed in Millions, except share information)		As of March 31, 2019		As of December 31, 2018
Common shares outstanding		115,262,303		115,151,251
Series B preference shares outstanding		11,901,670		11,901,670
Earned share-based compensation awards, excluding stock options		95,541		—
Earned portion of Stock option awards issued		38,193		—
Adjusted shares outstanding		127,297,707		127,052,921
Total common shareholders' equity	$	1,773.0	$	1,704.5
Series B preference shares		240.6		232.2
Earned portion of future proceeds from stock option awards		0.5		—
Adjusted book value	$	2,014.1	$	1,936.7
Book value per common share	$	15.38	$	14.80
Adjusted book value per share	$	15.82	$	15.24

Operating income attributable to common shareholders

The Company uses Operating income 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 income attributable to common shareholders as used herein differs from net income 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 income 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

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fluctuations. The following is a reconciliation of net income attributable to common shareholders to Operating income attributable to common shareholders:

		Three months ended March 31,
(Expressed in Millions)		2019			2018
Net income attributable to common shareholders	$	95.3		$	40.5
Adjustment for net realized and unrealized (gains) on investments		(83.0	)		(12.3	)
Adjustment for net foreign exchange (gains) losses		(5.1	)		3.5
Adjustment for income tax expense (benefit)(1)		5.7			(0.8	)
Operating income attributable to common shareholders	$	12.9		$	30.9

⁽¹⁾Adjustment for income tax expense (benefit) represents the income tax (expense) benefit associated with the adjustment for net realized and unrealized (gains) on investments and the income tax expense (benefit) 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.

Liquidity and Capital Resources

Liquidity is a measure of a company's ability to generate cash flows sufficient to meet the short-term and long-term cash requirements of its business operations. Sirius Group's insurance and reinsurance operations are subject to regulation and supervision in each of the jurisdictions where they are domiciled and licensed to conduct business. Generally, regulatory authorities have broad supervisory and administrative powers over such matters as licenses, standards of solvency, premium rates, policy forms, investments, security deposits, methods of accounting, form and content of financial statements, reserves for unpaid loss and LAE, reinsurance, minimum capital and surplus requirements, dividends and other distributions to shareholders, periodic examinations and annual and other report filings. In general, such regulation is for the protection of policyholders rather than shareholders. Sirius Group manages its liquidity needs primarily through the maintenance of a short duration and high quality fixed income portfolio.

Dividend Capacity

Sirius Group's top tier regulated insurance and reinsurance operating subsidiary is Sirius Bermuda. Sirius Bermuda's ability to pay dividends is limited under Bermuda law and regulations. Under the Insurance Act 1978, Sirius Bermuda is restricted with respect to the payment of dividends. Sirius Bermuda is prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year's statutory balance sheet) unless it files, at least seven days before payment of such dividends, with the Bermuda Monetary Authority ("BMA") an affidavit stating that it will continue to meet the required margins following the declaration of those dividends. As of December 31, 2018, Sirius Bermuda could pay approximately $539 million to its parent company, Sirius International Group, Ltd., during 2019. Sirius Bermuda indirectly owns Sirius International, Sirius America and Sirius Group's other insurance and reinsurance operating companies, each of which are limited in their ability to pay dividends by the insurance laws of their relevant jurisdictions. On May 3, 2019, in connection with recent announcements by the China Minsheng Investment Group Corp., Ltd. ("CMIG"), the indirect parent of CM Bermuda Ltd., the Company's majority shareholder, regarding defaults and cross-defaults on certain bonds and other debt obligations issued by CMIG (the "CMIG Defaults"), Sirius Bermuda and Sirius Group entered into a voluntary undertaking with the BMA to provide further comfort to the BMA regarding the potential risks to Sirius Group in connection with the CMIG Defaults, as the group supervisor of Sirius Group and primary regulator of Sirius Bermuda, the designated insurer for group supervisory purposes. Pursuant to the voluntary undertaking, each of Sirius Group and Sirius Bermuda have agreed, until May 3, 2020, (a) to provide ten days prior written notice to the BMA prior to declaring any dividend or capital distribution, which notice shall include an affidavit confirming that the declaration and payment of such dividend would not be in breach of (i) the provisions of section 54 of the Companies Act 1981 in the case of Sirius Bermuda, (ii) the Minimum Liquidity Ratio as defined in the Insurance Act 1978 in the case of Sirius Bermuda; and (iii) the Target Capital Level of 120% of the Enhanced Capital Requirement as defined by the Bermuda Solvency Capital Requirement promulgated by the BMA for Sirius Group and Sirius Bermuda, and a summary

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description of the use proceeds from such declaration or dividend or capital distribution within Sirius Group or Sirius Bermuda; (b) not to enter into any guarantees, keepwells, loans or other financial arrangements between Sirius Group and CMIG, or provide any credit support with respect to any obligations of CMIG; and (c) not to enter into any related party transaction with CMIG. See Part II, Item 1A of this Quarterly Report on Form 10-Q for additional information regarding the CMIG Defaults.

Sirius International has the ability to pay dividends to Sirius Bermuda subject to the availability of unrestricted equity, calculated in accordance with the Swedish Act on Annual Accounts in Insurance Companies and the Swedish Financial Supervisory Authority (the "SFSA"). Unrestricted equity is calculated on a consolidated group account basis and on a parent account basis. Differences between the two include but are not limited to accounting for goodwill, subsidiaries (with parent accounts stated at original foreign exchange rates), taxes and pensions. Sirius International's ability to pay dividends is limited to the "lower of" unrestricted equity as calculated within the group and parent accounts. As of December 31, 2018, Sirius International had $373 million (based on the December 31, 2018 SEK to USD exchange rate) of unrestricted equity on a parent account basis (the lower of the two approaches) available to pay dividends in 2019. The amount of dividends available to be paid by Sirius International in any given year is also subject to cash flow and earnings generated by Sirius International's business, the maintenance of adequate solvency capital ratios for Sirius International and the consolidated Sirius International UK Holdings Ltd. group, as well as dividends received from its subsidiaries, including Sirius America. Earnings generated by Sirius International's business that are allocated to the Safety Reserve are not available to pay dividends (see "Safety Reserve" below). For the three months ended March 31, 2019, Sirius International did not declare a dividend and paid an insignificant amount of dividends declared in 2017.

Under the normal course of business, Sirius America has the ability to pay dividends to its immediate parent during any twelve-month period without the prior approval of regulatory authorities in an amount set by a formula based on the lesser of net investment income, as defined by statute, or 10% of statutory surplus, in both cases as most recently reported to regulatory authorities, subject to the availability of earned surplus and subject to dividends paid in prior periods. Based on this formula, Sirius America has ordinary dividend capacity as of March 31, 2019, without prior regulatory approval. As of December 31, 2018, Sirius America had $522 million of statutory surplus and $108 million of earned surplus. For the three months ended March 31, 2019, Sirius America did not pay any dividends to its immediate parent.

For the three months ended March 31, 2019, Sirius Group did not pay any dividends. As of March 31, 2019, Sirius Group had $34 million of net unrestricted cash, short-term investments, and fixed maturity investments outside of its regulated and unregulated insurance and reinsurance operating subsidiaries.

Capital Maintenance

There is a capital maintenance agreement between Sirius International and Sirius America, which obligates Sirius International to make contributions to Sirius America's surplus in order for Sirius America to maintain surplus equal to at least 125% of the company action level risk-based capital as defined in the National Association of Insurance Commissioners' Property/Casualty Risk-Based Capital Report. The agreement provides for a maximum contribution to Sirius America of $200 million. For the three months ended March 31, 2019, Sirius International did not make any contributions to the surplus of Sirius America.

Safety Reserve

Subject to certain limitations under Swedish law, Sirius International is permitted to transfer pre-tax income amounts into an untaxed reserve referred to as a "Safety Reserve." As of March 31, 2019, Sirius International's Safety Reserve amounted to SEK 10.7 billion, or $1.2 billion (based on the March 31, 2019 SEK to USD exchange rate). Under 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 is only required to be paid by Sirius International if it fails to maintain prescribed levels of premium writings and loss reserves in future years. As a result of the indefinite deferral of these taxes, Swedish regulatory authorities apply no taxes to the Safety Reserve when calculating solvency capital under Swedish insurance regulations.

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Pursuant to tax legislation enacted in Sweden in June 2018, the tax rate applicable to Swedish corporations decreased to 21.4% effective as of January 1, 2019, and then will further reduce to 20.6% starting in 2021. The enacted legislation also included a new provision treating an amount equal to 6% of the Safety Reserve balance as of January 1, 2021, as taxable income subject to tax at the applicable 20.6% rate. Based on this new provision, Sirius International's positive effect of the decreased tax rate on the deferred tax liability is offset by an additional deferred tax liability in the amount of $15 million as of December 31, 2018.

Under local statutory requirements, an amount equal to the deferred tax liability on Sirius International's Safety Reserve ($252 million as of March 31, 2019) is included in solvency capital. Access to the Safety Reserve is restricted to coverage of insurance and reinsurance losses and to coverage of a breach of the Solvency Capital Requirement. Access for any other purpose requires the approval of Swedish regulatory authorities. Similar to the approach taken by Swedish regulatory authorities, most major rating agencies generally include the $1.2 billion balance of the Safety Reserve, without any provision for deferred taxes, in Sirius International's regulatory capital when assessing Sirius International and Sirius Group's financial strength. Subject to certain limitations under Swedish law, Sirius International is permitted to transfer certain portions of its pre-tax income to its Swedish parent companies to minimize taxes (referred to as a group contribution). For the three months ended March 31, 2019, Sirius International did not transfer any of its 2018 pre-tax income via group contributions to its Swedish parent companies.

Insurance Float

Insurance float is an important aspect of Sirius Group's insurance and reinsurance operations. Insurance float represents funds that an insurance or reinsurance company holds for a limited time. In an insurance or reinsurance operation, float arises because premiums are collected before losses are paid. This interval can extend over many years. During that time, the insurer or reinsurer invests the funds. When the premiums that an insurer or reinsurer collects do not cover the losses and expenses it eventually must pay, the result is an underwriting loss, which can be considered as the cost of insurance float.

Insurance float can increase in a number of ways, including through acquisitions of insurance and reinsurance operations, organic growth in existing insurance and reinsurance operations and recognition of losses that do not immediately cause a corresponding reduction in investment assets. Conversely, insurance float can decrease in a number of other ways, including sales of insurance and reinsurance operations, shrinking or runoff of existing insurance and reinsurance operations, the acquisition of operations that do not have substantial investment assets (e.g., an agency) and the recognition of gains that do not cause a corresponding increase in investment assets. It is Sirius Group's intention to generate low-cost float over time through a combination of acquisitions and organic growth in its existing insurance and reinsurance operations.

Certain operational leverage metrics can be measured with ratios that are calculated using insurance float. There are many activities that do not change the amount of insurance float at an insurance or reinsurance company but can have a significant impact on Sirius Group's operational leverage metrics. For example, investment gains and losses, foreign currency translation gains and losses, debt issuances and repurchases/repayments, common and preferred share issuances and repurchases and dividends paid to shareholders are all activities that do not change insurance float but can meaningfully impact operational leverage metrics that are calculated using insurance float.

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The following table illustrates Sirius Group's consolidated insurance float position as of March 31, 2019 and December 31, 2018:

(Millions)	March 31, 2019			December 31, 2018
Loss and LAE reserves	$	1,976.3		$	2,016.7
Unearned insurance and reinsurance premiums	860.5			647.2
Ceded reinsurance payable	231.3			206.9
Funds held under reinsurance treaties	123.4			110.6
Deferred tax liability on safety reserve	251.8			261.1
Float liabilities	3,443.3			3,242.5
Cash	116.0			119.4
Reinsurance recoverable on paid and unpaid losses	399.8			405.2
Insurance and reinsurance premiums receivable	818.7			630.6
Funds held by ceding companies	202.8			186.8
Deferred acquisition costs	152.6			141.6
Ceded unearned insurance and reinsurance premiums	200.5			159.8
Float assets	1,890.4			1,643.4
Insurance float	$	1,552.9		$	1,599.1
Insurance float as a multiple of total capital(1)	0.6		x	0.6		x
Insurance float as a multiple of Sirius Group's common shareholders' equity	0.9		x	0.9		x

⁽¹⁾See calculation of total capital below in the "Financing" table

Financing

Management believes that Sirius Group has the flexibility and capacity to obtain funds externally as needed through debt or equity financing on both a short-term and long-term basis. However, Sirius Group can provide no assurance that, if needed, it would be able to obtain additional debt or equity financing on satisfactory terms, if at all.

The following table summarizes Sirius Group's capital structure as of March 31, 2019 and December 31, 2018:

(Millions)	March 31, 2019		December 31, 2018
2017 SEK Subordinated Notes	$	292.7	$	303.6
2016 SIG Senior Notes	393.4		393.2
Total debt	686.1		696.8
Series B preference shares	240.6		232.2
Common shareholders' equity	1,773.0		1,704.5
Total capital	$	2,699.7	$	2,633.5
Total debt to total capital	25%		26%
Total debt and Series B preference shares to total capital	34%		35%

2017 SEK Subordinated Notes

On September 22, 2017, Sirius Group issued floating rate callable subordinated notes denominated in Swedish kronor ("SEK") in the amount of SEK 2,750 million (or $346 million on date of issuance) at a 100% issue price ("2017 SEK Subordinated Notes"). The 2017 SEK Subordinated Notes were issued in an offering that was exempt from the

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registration requirements of the Securities Act of 1933 (the "Securities Act"). The 2017 SEK Subordinated Notes bear interest on their principal amount at a floating rate equal to the applicable Stockholm Interbank Offered Rate ("STIBOR") for the relevant interest period plus an applicable margin, payable quarterly in arrears on March 22, June 22, September 22, and December 22 in each year commencing on December 22, 2017, until maturity in September 2047.

Sirius Group incurred $5 million in expenses related to the issuance of the 2017 SEK Subordinated Notes (including SEK 27.5 million, or $4 million, in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2017 SEK Subordinated Notes.

Taking into effect the amortization of all underwriting and issuance expenses, and applicable STIBOR, the 2017 SEK Subordinated Notes yield an effective rate of approximately 3.7% per annum. Sirius Group recorded $3 million of interest expense, inclusive of amortization of issuance costs, on the 2017 SEK Subordinated Notes for each of the three months ended March 31, 2019 and 2018, respectively.

2016 SIG Senior Notes

On November 1, 2016, Sirius Group issued $400 million face value of senior unsecured notes ("2016 SIG Senior Notes") at an issue price of 99.209% for net proceeds of $392.4 million after taking into effect both deferrable and non-deferrable issuance costs. The 2016 SIG Senior Notes were issued in an offering that was exempt from the registration requirements of the Securities Act. The 2016 SIG Senior Notes bear an annual interest rate of 4.6%, payable semi-annually in arrears on May 1, and November 1, in each year commencing on May 1, 2017, until maturity in November 2026.

Sirius Group incurred $5 million in expenses related to the issuance of the 2016 SIG Senior Notes (including $3 million in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2016 SIG Senior Notes.

Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the 2016 SIG Senior Notes yield an effective rate of approximately 4.7% per annum. Sirius Group recorded $5 million of interest expense, inclusive of amortization of issuance costs on the 2016 SIG Senior Notes, for each of the three months ended March 31, 2019 and 2018, respectively.

Standby letter of credit facilities

On November 9, 2018, Sirius International renewed two standby letter of credit facility agreements totaling $160 million to provide capital support for Lloyd's Syndicate 1945. The first letter of credit is a renewal of a $125 million facility with Nordea Bank Finland Abp, London Branch, which is issued on an unsecured basis. The second letter of credit is a $35 million facility with DNB Bank ASA, Sweden Branch, $25 million of which is issued on an unsecured basis. Each facility is renewable annually. The above referenced facilities are subject to various affirmative, negative and financial covenants that the Company considers to be customary for such borrowings, including certain minimum net worth and maximum debt to capitalization standards and change in control provisions.

Sirius International has other secured letter of credit and trust arrangements with various financial institutions to support its insurance operations. As of March 31, 2019 and December 31, 2018, these secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust of SEK 2.7 billion and SEK 2.9 billion, respectively, or of $296 million and $321 million, respectively (based on the March 31, 2019 and December 31, 2018 SEK to USD exchange rates). As of March 31, 2019 and December 31, 2018, Sirius America's trust arrangements were collateralized by pledged assets and assets in trust of $57 million and $56 million, respectively. As of March 31, 2019 and December 31, 2018, Sirius Bermuda's trust arrangements were collateralized by pledged assets and assets in trust of $347 million and $320 million, respectively.

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Revolving credit facility

In February 2018, Sirius Group, through its indirectly wholly-owned subsidiary Sirius International Group, Ltd., entered into a three-year, $300 million senior unsecured revolving credit facility (the "Facility"). The Facility provides access to loans for working capital and general corporate purposes, and letters of credit to support obligations under insurance and reinsurance agreements and retrocessional agreements. The Facility is subject to various affirmative, negative and financial covenants that Sirius Group considers to be customary for such borrowings, including certain minimum net worth, maximum debt to capitalization and financial strength rating standards and change in control provisions. As of March 31, 2019, there were no outstanding borrowings under the Facility.

Debt and standby letter of credit facility covenants

As of March 31, 2019, Sirius Group was in compliance with all of the covenants under the 2017 SEK Subordinated Notes, the 2016 SIG Senior Notes, the Nordea Bank Finland Abp, London Branch facility, and the DNB Bank ASA, Sweden Branch facility. In addition, as of March 31, 2019, Sirius Group was in compliance with all of the covenants under the Facility.

Off Balance Sheet Arrangements

Sirius Group is not party to any off-balance sheet transaction, agreement or other contractual arrangement as defined by Item 303(a)(4) of Regulation S-K to which an entity unconsolidated with Sirius Group is a party that management believes is reasonably likely to have a current or future effect on its financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that Sirius Group believes is material to investors.

Contractual Obligations and Commitments

In the normal course of business, we are party to a variety of contractual obligations, summarized as of December 31, 2018 in our 2018 Annual Report. We consider these contractual obligations when assessing our liquidity requirements. During the three months ended March 31, 2019, other than as disclosed in "Note 5. Reserves for unpaid losses and adjustment expenses" in the Notes to Consolidated Financial Statements included within "Part I, Item 1. Financial Statements." with respect to a decrease in our reserve for loss and LAE reserves, and "Note 9. Debt and standby letters of credit facilities" in the Notes to Consolidated Financial Statements included within "Part I, Item 1. Financial Statements." with respect to our long term debt obligations, there were no other material changes in our contractual obligations as disclosed in the table of contractual obligations, and related footnotes, included in our Annual Report.

Cash Flows

Sirius Group primarily derives cash from the net inflow of premiums less claim payments related to underwriting activities and from net investment income. The insurance and reinsurance business inherently provides liquidity, as premiums are received in advance of the time claims are paid. However, the amount of cash required to fund claim payments can fluctuate significantly from period to period, due to the low frequency and high severity nature of certain types of business we write. Sirius Group's remaining cash flows are generally reinvested in our investment portfolio.

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The following table summarizes our consolidated cash flows from operating, investing and financing activities for the three months ended March 31, 2019 and 2018.

		Three months ended March 31,
(Millions)		2019			2018
Net cash provided from (used for)(1)
Operations	$	24.6		$	22.4
Investing activities		(24.1	)		(60.4	)
Financing activities		(0.1	)		1.4
Effect of exchange rate changes on cash		(3.6	)		(2.5	)
(Decrease) in cash during year	$	(3.2	)	$	(39.1	)

⁽¹⁾Refer to Consolidated Statements of Cash Flows included in Sirius Group's Unaudited Consolidated Financial Statements included in "Part I, Item 1. Financial Statements."

Cash flows from operations for the three months ended March 31, 2019 and 2018

Net cash provided from operations was $25 million and $22 million for the three months ended March 31, 2019 and 2018, respectively. Cash flows from operations increased $3 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018.

Long-term compensation items affecting cash flows from operations

During the three months ended March 31, 2019 and 2018, Sirius Group made long-term incentive payments totaling $2 million and $6 million, respectively.

Cash flows from investing and financing activities for the three months ended March 31, 2019 and 2018

Cash flows (used for) investing activities were $(24) million and $(60) million for the three months ended March 31, 2019 and 2018, respectively. The current period reflected lower net purchases of common equity securities, partially offset by lower net sales of fixed maturities investments.

Cash flows provided from financing activities were insignificant for the three months ended March 31, 2019 and $1 million for the three months ended March 31, 2018.

Financing and other capital activities

During the three months ended March 31, 2019 and 2018, Sirius Group paid $3 million of interest on the 2017 SEK Subordinated Notes.

During the three months ended March 31, 2019, Sirius Group recorded an insignificant amount in cash flow from financing activities. During the three months ended March 31, 2018, as stipulated in the stock purchase agreement between CMIG International Pte. Ltd. ("CMIG International") and White Mountains Insurance Group ("White Mountains" or "former parent"), White Mountains paid Sirius Group $1 million for certain long-term incentive payments that Sirius Group paid to its employees.

Summary of Critical Accounting Estimates

Our Consolidated Financial Statements include certain amounts that are inherently uncertain and judgmental in nature. As a result, we are required to make assumptions and best estimates in order to determine the reported values. We consider an accounting estimate to be critical if: (1) it requires that significant assumptions be made in order to deal with uncertainties and (2) changes in the estimate could have a material impact on our results of operations, financial condition or liquidity.

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As disclosed in our 2018 Annual Report, we believe that the material items requiring such subjective and complex estimates are our:

Loss and LAE Reserves
Fair Value Measurements
Goodwill and Intangible Assets
Premiums
Earnout Obligations
Income Taxes

There have been no material changes to the Company's critical accounting estimates for the three months ended March 31, 2019. For additional information regarding our critical accounting estimates, refer to our 2018 Annual Report.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Sirius Group's consolidated balance sheet includes a substantial amount of assets and liabilities whose fair values are subject to market risk. The term "market risk" refers to the risk of loss arising from adverse changes in interest rates, credit spreads, equity markets prices and other relevant market rates and prices. Due to Sirius Group's sizable investment portfolio, market risk can have a significant effect on Sirius Group's consolidated financial position.

There have been no material changes in the information about market risk set forth in our 2018 Annual Report.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules, regulations and related forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As required by Rules 13a-15(e) and 15d-15(e) under the Exchange Act, Sirius Group's management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of March 31, 2019. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that Sirius Group's disclosure controls and procedures are effective in allowing information required to be disclosed in reports filed under the Exchange Act to be recorded, processed, summarized and reported within time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to Sirius Group's management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there have been no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Sirius Group, and the insurance and reinsurance industry in general, are routinely subject to claims-related litigation and arbitration in the normal course of business, as well as litigation and arbitration that do not arise from, or are not directly related to, claims activity. Sirius Group estimates of the costs of settling matters routinely encountered in claims activity are reflected in the reserves for unpaid loss and LAE.

We are not a party to any material legal proceedings arising outside the ordinary course of business.

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ITEM 1A. RISK FACTORS

We face a variety of risks that are inherent in our business and our industry, including operational, industry and regulatory risks. Such risks could cause our actual results to differ materially from our forward-looking statements, expectations and historical trends. As of the date of this report, there have been no material changes to the risk factors disclosed in Item 1A. "Risk Factors" in our 2018 Annual Report, except as set forth below.

Sirius Group has become aware of recent announcements by the China Minsheng Investment Group Corp., Ltd. ("CMIG") regarding defaults and cross-defaults on certain bonds and other debt obligations issued by certain subsidiaries of CMIG (the "CMIG Defaults"). The CMIG Defaults may have financial, legal, regulatory, contractual and other implications that could have a material adverse effect on Sirius Group's business, prospects, financial condition, results from operations, liquidity and share price.

CMIG International Holding Pte. Ltd. ("CMIG International"), which is approximately 82% owned by CMIG, indirectly holds approximately 87% of the voting and dispositive control over the Sirius Group common shares as of March 31, 2019, through CMIG International's wholly-owned Bermuda holding company, CM Bermuda Ltd. ("CM Bermuda"). On April 10, 2019, a subsidiary of CMIG announced that RMB4 billion of the subsidiary's debt had become immediately due and payable at the request of the lenders as a result of several asset freeze orders imposed on CMIG. On April 18, 2019, another subsidiary of CMIG announced that cross-default provisions on US$300 million and US$500 million of the subsidiary's bonds, which are guaranteed by CMIG, had been triggered by these actions. Public announcements relating to such CMIG Defaults noted that CMIG extended the payment date relating to certain private placement notes, there was uncertainty regarding CMIG's ability to repay certain commercial paper, and the existence of certain asset freeze orders relating to the equity interests of CMIG in certain Chinese subsidiaries not within the chain of control of Sirius Group.

Risks and uncertainties associated with the CMIG Defaults include the actions that CMIG may take to resolve its liquidity issues (such as a sale of Sirius Group) and potential opposition to such actions from CMIG's creditors and other parties in interest, as well as the actions that CMIG's creditors may take (such as additional freezes on CMIG's assets, including directly or indirectly the Sirius Group common shares held by CM Bermuda, or involuntary bankruptcy or liquidation proceedings of CMIG).

Furthermore, certain of the risks and uncertainties identified in Sirius Group's 2018 Annual Report have been heightened as a result of the CMIG Defaults, including those related to:

•

Sirius Group's reliance on financial strength and creditworthiness ratings.  Following the April 2016 acquisition of Sirius Group by CMIG International, A.M. Best temporarily issued a negative outlook in its rating of Sirius Group. The negative outlook reflected A.M. Best's concern over the credit profile of CMIG, represented by CMIG's high financial leverage. Fitch similarly lowered Sirius Group's rating by one notch due to its concern over CMIG's short operating history, rapid business growth and high and increasing leverage. The CMIG Defaults may prompt rating agencies to take additional actions to downgrade and/or place a negative watch/outlook on Sirius Group's ratings, which may have a material adverse effect on Sirius Group's business, prospects, financial condition and results from operations. On April 23, 2019, as a result of the deepening debt and liquidity difficulties at CMIG evidenced by the CMIG Defaults, Fitch placed Sirius Group's ratings on negative watch. A.M. Best and Standard & Poor's have left Sirius Group's ratings unchanged. A downgrade, withdrawal or negative watch/outlook in Sirius Group's credit ratings, including as a result of the CMIG Defaults, could result in higher borrowing costs, termination of certain reinsurance contracts, posting of collateral, more limited means to access capital and volatility in our stock price.

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•

Compliance with the regulatory framework under which Sirius Group operates.  Sirius Group is subject to certain legal and regulatory restrictions concerning its ownership and control. One such restriction is that no person or entity may acquire direct or indirect control of Sirius Group (which in some jurisdictions could occur with a person or entity, directly or indirectly, acquiring 10% or more of the voting securities of Sirius Group), without first obtaining the consent of the various regulatory authorities that have jurisdiction over Sirius Group. The CMIG Defaults could result in a situation in which CMIG, its affiliates or their respective creditors elect or are required to sell or otherwise transfer, directly or indirectly, their holdings of Sirius Group. Any direct or indirect change of control of Sirius Group (or CMIG entities that directly or indirectly hold Sirius Group shares) without the prior approval of applicable insurance regulatory authorities could result in the transaction being enjoined, the assessment of fines or penalties, the takeover of the applicable insurers by such insurance regulatory authorities, the revocation of applicable insurance licenses, and criminal penalties for willful violations of applicable insurance laws. In addition, a change in control could result in the termination of or the posting of collateral under certain reinsurance contracts. Certain U.S. states also prohibit the control of insurers by state-owned or state-controlled entities (such as state-owned banks), which may include certain of CMIG's creditors. A violation of such prohibitions could result in the revocation of insurance licenses held by Sirius Group's U.S.-domiciled insurers, which are necessary for Sirius Group to operate its business. In addition, a change of control of CMIG or Sirius Group that results in non-U.S. persons (including CMIG's creditors) acquiring direct or indirect control of Sirius Group's U.S. businesses may be subject to review by the Committee on Foreign Investment in the United States (CFIUS), potentially resulting in enforcement actions by CFIUS to enjoin or unwind the transaction.

•

Future sales of Sirius Group common shares by CM Bermuda.  Pursuant to the Registration Rights Agreement, dated as of November 5, 2018, between the Company, CM Bermuda and Easterly Acquisition Sponsor, LLC, all of the common shares owned by CM Bermuda are eligible to be registered under the Securities Act of 1933, as amended, subject to certain limitations set forth in the Registration Rights Agreement, and may be offered and sold to the public from time to time after the effectiveness of the related registration statement. CM Bermuda could at any time elect to require Sirius Group to file a registration statement to register any or all of its common shares, including in order to gain liquidity following the CMIG Defaults. Upon effectiveness of such registration statement, CM Bermuda may sell large amounts of Sirius Group common shares in the open market or in privately negotiated transactions, which could have the effect of substantially increasing the volatility in Sirius Group common share price or putting significant downward pressure on the price of Sirius Group common shares. Sales of substantial amounts of Sirius Group common shares in the public market, or the perception that such sales will occur, could materially adversely affect the market price.

•

The volatility in the trading price of Sirius Group's common shares and potential securities litigation related thereto.  The pendency of the CMIG Defaults, and actions taken by CMIG or its creditors in relation thereto, may result in significant volatility in the trading price of Sirius Group's common shares. Securities class action litigation is often brought against a public company following periods of volatility in the market price of its securities. Due to volatility in Sirius Group's share price, including any such volatility that may occur as a result of the announcement of the CMIG Defaults and the actions taken in connection therewith, Sirius Group may be the target of securities litigation in the future. Securities litigation could result in substantial uninsured costs and divert management's attention and Sirius Group's resources, and result in unexpected outcomes that may materially impact Sirius Group's business or operations.

•

Sirius Group's ability to utilize its tax attributes in the U.S. and possibly other countries.  The CMIG Defaults could result in a situation in which CM Bermuda elects or is required to sell or otherwise transfer its holdings of Sirius Group. If any sale or transfer, including by CM Bermuda, results in an "ownership change", as defined in Section 382 of the Internal Revenue Code of 1986, as amended, it is possible that a significant portion of Sirius Group's tax loss and/or credit carryforwards in the United States would expire before they can be used. Sirius Group also has a significant amount of tax loss carryforwards and other tax attributes in other countries, including Luxembourg, the UK, and Sweden. While Sirius Group does not currently expect such tax attributes to be restricted upon a transfer by CM Bermuda of its holdings of Sirius Group, the actual consequences will depend on the facts and law in effect at the time, no assurance can be made that Sirius Group's non-U.S. tax attributes will not be restricted if CM Bermuda transfers its holdings of Sirius Group in the future.

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In addition, as a result of these heightened risks and uncertainties, Sirius Group may be unable to enter into new relationships or preserve its existing relationships with third parties that are critical to maintaining its business. Clients and other business partners may seek to engage with other insurance and reinsurance companies that are not experiencing the same degree of uncertainty as Sirius Group. These circumstances could have a material adverse impact on Sirius Group's ability to maintain its existing business, to generate new business or to identify future partners to develop and expand its business. Sirius Group's ability to hire and retain qualified personnel may be similarly affected.

Although the CMIG Defaults do not trigger any defaults under Sirius Group's credit facilities, a change of control of Sirius Group as a result of the CMIG Defaults could trigger defaults under Sirius Group's credit facilities. In the event of acceleration of Sirius Group's debt obligations under and the termination of its credit facilities, Sirius Group may face challenges in refinancing its indebtedness on acceptable terms or at all, and may be unable to raise additional capital to support its business, particularly if Sirius Group's credit ratings are placed on a negative watch/outlook or are downgraded.

In addition, due to the CMIG Defaults, CMIG International's status as a controlling shareholder could limit Sirius Group's ability to raise new equity and debt capital or execute on strategic objectives, including bolt-on acquisitions and strategic mergers & acquisitions.

Any of the foregoing events could have a material adverse effect on Sirius Group's business, prospects, financial condition, results from operations, liquidity and share price.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

77

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

78

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

3.1	Memorandum of Association of Sirius International Insurance Group, Ltd, as amended. (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed by Sirius International Insurance Group, Ltd. on March 14, 2019).
3.2	Bye-Laws of Sirius International Insurance Group, Ltd. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Sirius International Insurance Group, Ltd. on November 6, 2018).
3.3	Certificate of Designation of Series B Preference Shares of Sirius International Insurance Group, Ltd. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by Sirius International Insurance Group, Ltd. on November 6, 2018).
10.13.7	Sirius International Insurance Group, Ltd. 2018 Omnibus Incentive Plan – Form of Restricted Share Award Agreement.
31.1	Certification of Kernan "Kip" V. Oberting, Chief Executive Officer of Sirius International Insurance Group, Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
31.2	Certification of Ralph Salamone, Chief Financial Officer of Sirius International Insurance Group, Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
32.1	Certification of Kernan "Kip" V. Oberting, Chief Executive Officer of Sirius International Insurance Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Ralph Salamone, Chief Financial Officer of Sirius International Insurance Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SIRIUS INTERNATIONAL INSURANCE GROUP, LTD. (Registrant)
Date: May 10, 2019	By:	/s/ KERNAN “KIP" V. OBERTING Kernan "Kip" V. Oberting President and Chief Executive Officer (Principal Executive Officer)
Date: May 10, 2019	By:	/s/ RALPH A. SALAMONE Ralph A. Salamone Chief Financial Officer (Principal Financial Officer & Principal Accounting Officer)

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EX-10.13.7

Exhibit 10.13.7

SIRIUS INTERNATIONAL INSURANCE GROUP, LTD.
2018 OMNIBUS INCENTIVE PLAN

RESTRICTED SHARE AWARD AGREEMENT

(For Grants Made to Independent Directors)

Sirius International Insurance Group, Ltd., a Bermuda exempted company (the “Company”), hereby grants to the [·] (the “Holder”), as of [·] (the “Grant Date”), pursuant to the provisions of the Sirius International Insurance Group, Ltd. 2018 Omnibus Incentive Plan (the “Plan”) (which is attached hereto), a Restricted Share Award of [·] Common Shares of the Company (the “Award”), subject to the restrictions, terms and conditions set forth in the Plan and this agreement (this “Agreement”).  Capitalized terms not defined herein shall have the meanings specified in the Plan.

1.         Award Subject to Acceptance of Agreement.  The Award shall be null and void unless the Holder accepts this Agreement by executing this Agreement in the space provided below and returning an original execution copy of this Agreement to the Company.  As soon as practicable after the Holder has executed this Agreement and returned it to the Company, the Company shall cause to be issued in the Holder’s name the total number of Common Shares subject to the Award. The Company shall pay all original issue or transfer taxes and all fees and expenses incident to such issuance or delivery of Common Shares subject to the Award.

2.         Rights as a Shareholder.  Except as otherwise provided herein, during the Restriction Period and until forfeiture pursuant to Section 3, the Holder shall have the rights as a holder of Common Shares, including, without limitation, the right to receive dividends and other distributions thereon and any voting rights. Dividends paid with respect to unvested Common Shares shall be unvested and shall be subject to the terms and conditions applicable to the Common Shares to which such dividends relate.  The Common Shares subject to the Award shall be held by the Company or by a custodian in book entry form, with restrictions on the Common Shares duly noted, until such Award shall have vested, pursuant to Section 3 hereof, and as soon thereafter as practicable, the vested Common Shares shall be delivered to the Holder as the Holder shall direct.

3.         Restriction Period and Vesting.

3.1.      Restriction Period. Except as otherwise provided for herein, the Award shall vest on the [·] anniversary of the Grant Date (the “Vesting Date”), if, and only if, the Holder is, and has been, continuously serving as an Independent

1

Director from the Grant Date through and including the Vesting Date.  The period of time prior to the vesting shall be referred to herein as the “Restriction Period.”

3.2.   Termination of Service.  If the Holder’s service with the Company as an Independent Director is terminated prior to the end of the Restriction Period for any reason, then the unvested portion of the Award shall be immediately forfeited by the Holder and the Common Shares subject to the Award shall be transferred to the Company for no consideration.

3.3.   Change in Control. Notwithstanding the foregoing, upon a Change in Control, the Committee, as constituted prior to the Change in Control, may treat this award in any manner authorized by the Plan, subject to the following:

(a)        Settlement of Award Not Properly Substituted or Assumed. In the event of a Change in Control pursuant to which the Award is outstanding and not effectively substituted, assumed or continued by the surviving or acquiring corporation in such Change in Control (as determined by the Board or Committee (as constituted prior to such Change in Control), with appropriate adjustments to the number and kind of shares, in each case, that preserve the value of the shares subject to the Award and other material terms and conditions of the outstanding Award as in effect immediately prior to the Change in Control), the Award shall fully vest as of the date of the Change in Control.

(b)        Settlement of Award Properly Substituted or Assumed. In the event of a Change in Control pursuant to which the Award is outstanding and is effectively substituted, assumed or continued by the surviving or acquiring corporation in such Change in Control (as determined by the Board or Committee (as constituted prior to such Change in Control), with appropriate adjustments to the number and kind of shares, in each case, that preserve the value of the shares subject to the Award and other material terms and conditions of the outstanding Award as in effect immediately prior to the Change in Control), then any such substituted or continued Award shall provide that if the Holder’s service terminates, within 12 months following such Change in Control and the Holder executes and does not revoke a waiver and release of claims in the form prescribed by the Company within 45 days after the date of such termination, the Award shall fully vest.

4.         Transfer Restrictions and Investment Representation.

4.1.      Nontransferability of Award.  During the Restriction Period, the Award (and the underlying Common Shares subject to the Award) shall not be transferable other than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Company. Except as permitted by the foregoing sentence, during the Restriction Period, neither the Award nor the Common Shares subject to the Award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of

2

law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the Award, such Award and all rights hereunder shall immediately become null and void. All transfer restrictions provided for in this Section 4.1, shall lapse as of the Vesting Date.

4.2.    Investment Representation.  The Holder hereby covenants that (a) any sale of any Common Share acquired pursuant upon the vesting of the Award shall be made either pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”) and any applicable state securities laws, or pursuant to an exemption from registration under the Securities Act and such state securities laws and (b) the Holder shall comply with all regulations and requirements of any regulatory authority having control of or supervision over the issuance of the shares and, in connection therewith, shall execute any documents which the Committee shall in its sole discretion deem necessary or advisable.

5.         Additional Terms and Conditions of Award.

5.1.      Clawback of Proceeds. The Award is subject to the clawback provisions in Section 5.14 of the Plan. The Holder agrees that by accepting the Award the Holder authorizes the Company and its Affiliates to deduct any amount or amounts owed by the Holder pursuant to this Section 5.1 from any amounts payable by or on behalf of the Company or any Affiliate to the Holder, including, without limitation, any amount payable to the Holder as compensation or remuneration, including, but not limited to the vesting or settlement of the Award or any share-based award. This right of setoff shall not be an exclusive remedy and the Company’s or an Affiliate’s election not to exercise this right of setoff with respect to any amount payable to the Holder shall not constitute a waiver of this right of setoff with respect to any other amount payable to the Holder or any other remedy.

5.2.      Taxation.  The Holder understands that the Holder is solely responsible for all tax consequences to the Holder in connection with the Award.  The Holder represents that the Holder has consulted with any tax consultants the Holder deems advisable in connection with the Award and that the Holder is not relying on the Company for any tax advice.  By accepting this Agreement, the Holder acknowledges his or her understanding that the Holder may file with the Internal Revenue Service an election pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”) (a “Section 83(b) Election”), not later than 30 days after the Grant Date, to include in the Holder’s gross income the Fair Market Value of the unvested Common Shares subject to the Award as of such date.  Before filing a Section 83(b) Election with the Internal Revenue Service, the Holder shall notify the Company of such election by delivering to the Company a copy of the fully-executed Section 83(b) Election Form attached hereto as Exhibit A.

5.3.    Compliance with Applicable Law.  The Award is subject to the condition that if the listing, registration or qualification of the Common Shares subject to the Award upon

3

any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares hereunder, the Common Shares subject to the Award shall not be delivered, in whole or in part, unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company.  The Company agrees to use reasonable efforts to effect or obtain any such listing, registration, qualification, consent, approval or other action.

5.4.      Award Confers No Rights to Continued Service.  In no event shall the granting of the Award or its acceptance by the Holder, or any provision of this Agreement or the Plan, give or be deemed to give the Holder any right to continued service with the Company or any Affiliate or affect in any manner the right of the Company or any Affiliate to terminate the service of any person at any time.

5.5.      Decisions of Board or Committee.  The Board or the Committee shall have the right to resolve all questions, which may arise in connection with the Award.  Any interpretation, determination or other action made or taken by the Board or the Committee regarding the Plan or this Agreement shall be final, binding and conclusive.

5.6.      Successors.   This Agreement shall be binding upon and inure to the benefit of the Company and any successor of the Company, including without limitation any person, association, or entity which may hereafter acquire or succeed to all or substantially all of the business or assets of the Company by any means whether direct or indirect, by purchase, merger, consolidation, or otherwise and the Company shall require any such acquirer successor to assume this Agreement and the obligations and liabilities contemplated hereunder.  Holder’s rights, benefits and obligations under this Agreement are personal and shall not be voluntarily or involuntarily assigned, alienated, or transferred, whether by operation of law or otherwise, without the prior written consent of the Company.

5.7.      Notices.  All notices, requests or other communications provided in this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by United States registered or certified mail, return receipt requested, postage prepaid (or in a foreign country such similar method), addressed as follows:

If to the Company:Sirius International Insurance Group, Ltd.
14 Wesley Street, 5th Floor

Hamilton HM11 BermudaAttention:  Group General Counsel

If to the Holder:[•]

4

or to such other address as either party may furnish to the other in writing in accordance herewith, except that notices of changes of address shall be effective only upon receipt.

5.8.      Governing Law. This Agreement, the Award and all determinations made and actions taken pursuant hereto and thereto, to the extent not otherwise governed by the Code or the laws of the United States and/or Bermuda, shall be governed by the laws of New York and construed in accordance therewith without giving effect to principles of conflicts of laws

5.9.      Agreement Subject to the Plan.  This Agreement is subject to the provisions of the Plan and shall be interpreted in accordance therewith.  In the event that the provisions of this Agreement and the Plan conflict, the Plan shall control.  The Holder hereby acknowledges receipt of a copy of the Plan.

5.10.    Entire Agreement.  This Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Holder with respect to the subject matter hereof, and may not be modified adversely to the Holder’s interest except by means of a writing signed by the Company and the Holder.

5.11.    Severability.  If a court of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, then the invalidity or unenforceability of that provision shall not affect the validity or enforceability of any other provision of this Agreement, and all other provisions shall remain in full force and effect.

5.12.    Amendment and Waiver.  The Company may amend the provisions of this Agreement at any time; provided that an amendment that would adversely affect the Holder’s rights under this Agreement shall be subject to the written consent of the Holder.  No course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.

5.13.    Compliance with Section 409A of the Code.  The Award is intended to be exempt from Section 409A of the Code, and shall be interpreted and construed accordingly.

Sirius International Insurance Group, Ltd.
By:
Name:	[·]
Title:	[·]

5

Acknowledgment, Acceptance and Agreement:

By accepting this grant, I hereby accept the Award and acknowledge and agree to be bound by the terms and conditions of this Agreement and the Plan. Holder acknowledges that there may be adverse tax consequences associated with the Award or the acquisition or disposition of the Shares associated with the Award and that the Holder should consult a tax adviser.

HOLDER

Date

6

EXHIBIT A -- SAMPLE 83(B) ELECTION

ELECTION TO INCLUDE VALUE OF RESTRICTED PROPERTY
IN GROSS INCOME

IN YEAR OF TRANSFER UNDER CODE SECTION 83(b)

The undersigned hereby elects pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “Code”), to include the value of the property described below in gross income in the year of transfer and supplies the following information in accordance with the regulations promulgated thereunder:

1.  The name, address and taxpayer identification number of the undersigned are:

[Taxpayer]

[Address]

[Social Security Number]

2.  Description of the property with respect to which the election is being made:

[·] Common Shares, par value $0.01 per share, of Sirius International Insurance Group, Ltd., a Bermuda exempted company (the “Company”), granted to the undersigned as restricted shares.

3.  The date on which the property was transferred is [·].

The taxable year to which this election relates is calendar year [·].

4.  The nature of the restrictions to which the property is subject is:

If the services of the undersigned terminate prior to specified dates, the undersigned will forfeit the property transferred to the undersigned.

5.  Fair market value:

The fair market value (determined without regard to any restrictions) of the property with respect to which this election is being made was $[·]per share at the time of transfer.

6.  Amount paid for property:

The taxpayer has paid $0 for the property.

7.  Furnishing statement to company:

A copy of this statement has been furnished to the Company.

Dated:

A-1

SIRIUS INTERNATIONAL INSURANCE GROUP, LTD.
2018 OMNIBUS INCENTIVE PLAN

EX-31.1

Exhibit 31.1

Certification

Sirius International Insurance Group, Ltd.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Kernan “Kip” V. Oberting, certify that:

1.     I have reviewed this Quarterly Report on Form 10-Q of Sirius International Insurance Group, Ltd.;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c.     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 10, 2019
By:	/s/ Kernan “Kip” V. Oberting
Name:	Kernan “Kip” V. Oberting
Title:	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification

Sirius International Insurance Group, Ltd.

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Ralph A. Salamone, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Sirius International Insurance Group, Ltd.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

c.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 10, 2019
By:	/s/ Ralph A. Salamone
Name:	Ralph A. Salamone
Title:	Chief Financial Officer

EX-32.1

Exhibit 32.1

Sirius International Insurance Group, Ltd.

Certification Pursuant to Chapter 63, Title 18 United States Code §1350

As Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Sirius International Insurance Group, Ltd. (the “Company”) on Form 10-Q for the quarter ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kernan “Kip” V. Oberting, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 10, 2019
By:	/s/ Kernan “Kip” V. Oberting
Name:	Kernan “Kip” V. Oberting
Title:	President and Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to Sirius International Insurance Group, Ltd. and will be retained by Sirius International Insurance Group, Ltd. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Sirius International Insurance Group, Ltd.

Certification Pursuant to Chapter 63, Title 18 United States Code §1350

As Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Sirius International Insurance Group, Ltd. (the “Company”) on Form 10-Q for the quarter ended March 31, 2019, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Ralph A. Salamone, Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 10, 2019
By:	/s/ Ralph A. Salamone
Name:	Ralph A. Salamone
Title:	Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to Sirius International Insurance Group, Ltd. and will be retained by Sirius International Insurance Group, Ltd. and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document and Entity Information
Entity Registrant Name	Sirius International Insurance Group, Ltd.
Entity Central Index Key	0001744894
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		115,262,303
Entity Small Business	true
Entity Emerging Growth Company	false
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

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Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Assets
Fixed maturity investments, trading, at fair value (Amortized cost 2019: $1,814.8; 2018: $1,952.9)	$ 1,846.4	$ 1,949.2
Short-term investments, at fair value (Amortized cost 2019: $830.5; 2018: $716.1)	833.6	715.5
Equity securities, trading, at fair value (Cost 2019: $398.4; 2018: $409.4)	394.4	380.0
Other long-term investments, at fair value (Cost 2019: $351.7; 2018: $337.6)	389.7	365.0
Cash	116.0	119.4
Restricted cash	13.0	12.8
Total investments and cash	3,593.1	3,541.9
Accrued investment income	12.7	14.1
Insurance and reinsurance premiums receivable	818.7	630.6
Reinsurance recoverable on unpaid losses	349.3	350.2
Reinsurance recoverable on paid losses	50.5	55.0
Funds held by ceding companies	202.8	186.8
Ceded unearned insurance and reinsurance premiums	200.5	159.8
Deferred acquisition costs	152.6	141.6
Deferred tax asset	171.6	202.5
Accounts receivable on unsettled investment sales	1.7	5.0
Goodwill	400.7	400.6
Intangible assets	191.7	195.6
Other assets	161.1	124.0
Total assets	6,307.0	6,007.7
Liabilities
Loss and loss adjustment expense reserves	1,976.3	2,016.7
Unearned insurance and reinsurance premiums	860.5	647.2
Ceded reinsurance payable	231.3	206.9
Funds held under reinsurance treaties	123.4	110.6
Deferred tax liability	230.6	237.4
Debt	686.1	696.8
Accounts payable on unsettled investment purchases	9.9	3.2
Other liabilities	173.1	150.5
Total liabilities	4,291.2	4,069.3
Commitments and contingencies (see Note 18)
Mezzanine equity
Series B preference shares	240.6	232.2
Common shareholders' equity
Common shares (shares issued and outstanding, 2019:115,262,303; 2018: 115,151,251)	1.2	1.2
Additional paid-in surplus	1,090.2	1,089.1
Retained earnings	911.8	816.6
Accumulated other comprehensive (loss)	(230.2)	(202.4)
Total common shareholders' equity	1,773.0	1,704.5
Non-controlling interests	2.2	1.7
Total equity	1,775.2	1,706.2
Total liabilities, mezzanine equity, and equity	$ 6,307.0	$ 6,007.7

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Consolidated Balance Sheets
Fixed maturity investments, trading, at fair value, Amortized cost (in dollars)	$ 1,814.8	$ 1,952.9
Short-term investments, amortized cost (in dollars)	830.5	716.1
Equity securities, at cost (in dollars)	398.4	409.4
Other long-term investments, at fair value, Cost (in dollars)	$ 351.7	$ 337.6
Shares issued	115,262,303	115,151,251
Shares outstanding	115,262,303	115,151,251

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Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenues
Net earned insurance and reinsurance premiums	$ 311.9	$ 284.5
Net investment income	20.1	10.8
Net realized investment gains (losses)	9.0	(3.7)
Net unrealized investment gains	74.0	16.0
Net foreign exchange gains (losses)	5.1	(3.5)
Other revenue	19.6	23.4
Total revenues	439.7	327.5
Expenses
Loss and loss adjustment expenses	183.9	141.0
Insurance and reinsurance acquisition expenses	63.3	63.0
Other underwriting expenses	35.3	43.2
General and administrative expenses	24.4	14.3
Intangible asset amortization expenses	3.9	3.9
Interest expense on debt	7.6	7.7
Total expenses	318.4	273.1
Pre-tax income	121.3	54.4
Income tax (expense)	(17.2)	(11.1)
Net income	104.1	43.3
Less: income attributable to non-controlling interests	(0.4)	(0.2)
Net income attributable to Sirius Group	103.7	43.1
Less: Change in carrying value of Series B preference shares	(8.4)
Less: Accrued dividends on Series A redeemable preference shares		(2.6)
Net income attributable to Sirius Group's common shareholders	$ 95.3	$ 40.5
Net income per common share and common share equivalent
Basic earnings per common share and common share equivalent	$ 0.75	$ 0.32
Diluted earnings per common share and common share equivalent	$ 0.74	$ 0.32
Weighted average number of common shares and common share equivalents outstanding
Basic weighted average number of common shares and common share equivalents outstanding	115,182,331	120,000,000
Diluted weighted average number of common shares and common share equivalents outstanding	127,335,314	120,000,000

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Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Comprehensive income
Net income	$ 104.1	$ 43.3
Other comprehensive (loss)
Change in foreign currency translation, net of tax	(27.8)	(13.4)
Total other comprehensive (loss)	(27.8)	(13.4)
Comprehensive income	76.3	29.9
Net (income) attributable to non-controlling interests	(0.4)	(0.2)
Comprehensive income attributable to Sirius Group	$ 75.9	$ 29.7

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Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions	Common shares	Additional paid-in surplus	Retained earnings	Accumulated other comprehensive (loss)	Non-controlling interests	Total
Accumulated net foreign currency translation (losses)
Non-controlling interests						$ 0.2
Total common shareholders' equity at Dec. 31, 2017	$ 1.2	$ 1,197.9	$ 858.4	$ (140.5)
Capital contribution from former parent		1.4
Net income			43.3
Income attributable to non-controlling interests			(0.2)
Accrued dividends on Series A redeemable preference shares			(2.6)			(2.6)
Other, net			(0.1)
Balance at beginning of year at Dec. 31, 2017				(140.5)
Accumulated net foreign currency translation (losses)
Net change in foreign currency translation				(13.4)
Balance at end of year at Mar. 31, 2018				(153.9)
Total common shareholders' equity at Mar. 31, 2018		1,199.3	900.4	(153.9)		1,947.0
Cumulative effect of an accounting change			1.6
Accumulated net foreign currency translation (losses)
Non-controlling interests					$ 0.5	0.5
Total equity			860.0			1,947.5
Non-controlling interests						1.7
Total common shareholders' equity at Dec. 31, 2018	$ 1.2	1,089.1	816.6	(202.4)		1,704.5
Share-based compensation		1.2
Other, net		(0.1)
Net income			104.1
Income attributable to non-controlling interests			(0.4)
Change in carrying value of Series B preference shares			(8.4)
Other, net			(0.1)
Balance at beginning of year at Dec. 31, 2018				(202.4)
Accumulated net foreign currency translation (losses)
Net change in foreign currency translation				(27.8)
Balance at end of year at Mar. 31, 2019				(230.2)
Total common shareholders' equity at Mar. 31, 2019		$ 1,090.2	911.8	$ (230.2)		1,773.0
Accumulated net foreign currency translation (losses)
Non-controlling interests					$ 2.2	2.2
Total equity			$ 816.6			$ 1,775.2

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Consolidated Statements of Cash Flows - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Cash flows from operations:
Net income	$ 104.1	$ 43.3
Adjustments to reconcile net income to net cash provided from operations:
Net realized and unrealized investment gains (losses)	(83.0)	(12.3)
Amortization of premium on fixed maturity investments	(0.8)	4.4
Amortization of intangible assets	3.9	3.9
Depreciation and other amortization	2.2	2.5
Share-based compensation	1.2
Other operating items:
Net change in loss and loss adjustment expense reserves	(1.1)	(4.2)
Net change in reinsurance recoverable on paid and unpaid losses	(8.7)	(17.8)
Net change in funds held by ceding companies	(20.1)	(12.2)
Net change in unearned insurance and reinsurance premiums	232.4	271.8
Net change in ceded reinsurance payable	37.7	47.6
Net change in ceded unearned insurance and reinsurance premiums	(47.6)	(71.6)
Net change in insurance and reinsurance premiums receivable	(208.8)	(192.2)
Net change in deferred acquisition costs	(14.2)	(31.8)
Net change in funds held under reinsurance treaties	15.4	10.4
Net change in current and deferred income taxes, net	9.1	2.2
Net change in other assets and liabilities, net	2.9	(21.6)
Net cash provided from operations	24.6	22.4
Cash flows from investing activities:
Net change in short-term investments	(120.1)	(180.0)
Sales of fixed maturities and convertible fixed maturity investments	135.1	566.2
Maturities, calls, and paydowns of fixed maturity and convertible fixed maturity investments	59.3	24.0
Sales of common equity securities	45.9	111.7
Distributions and redemptions of other long-term investments	15.3	52.4
Contributions to other long-term investments	(25.0)	(64.4)
Purchases of common equity securities	(39.8)	(179.8)
Purchases of fixed maturities and convertible fixed maturity investments	(105.1)	(486.8)
Net change in unsettled investment purchases and sales	10.0	97.2
Other, net	0.3	(0.9)
Net cash (used for) investing activities	(24.1)	(60.4)
Cash flows from financing activities:
Change in collateral held on Interest Rate Cap	(0.1)
Capital contribution from former parent		1.4
Net cash (used for) provided from financing activities	(0.1)	1.4
Effect of exchange rate changes on cash	(3.6)	(2.5)
Net (decrease) in cash during year	(3.2)	(39.1)
Cash and restricted cash balance at beginning of year	132.2	230.6
Cash and restricted cash balance at end of year	$ 129.0	$ 191.5

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General

3 Months Ended

Mar. 31, 2019

General

General

Note 1. General

Sirius International Insurance Group, Ltd. (the “Company”) is a Bermuda exempted company whose principal businesses are conducted through its wholly- and majority-owned insurance subsidiaries (collectively with the Company, “Sirius Group”).  Sirius Group provides insurance, reinsurance, and insurance services on a worldwide basis.

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Summary of significant accounting policies

3 Months Ended

Mar. 31, 2019

Summary of significant accounting policies

Summary of significant accounting policies

Note 2. Summary of significant accounting policies

Basis of presentation

The accompanying Unaudited Consolidated Financial Statements at March 31, 2019, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. The accompanying Unaudited Consolidated Financial Statements present the consolidated results of operations, financial condition, and cash flows of the Company and its subsidiaries and those entities in which the Company has control and a majority economic interest as well as those variable interest entities (“VIEs”) that meet the requirements for consolidation. All intercompany transactions have been eliminated in consolidation.

These Unaudited Consolidated Financial Statements do not include all disclosures normally included in annual financial statements prepared in accordance with GAAP and should be read in conjunction with the Audited Consolidated Financial Statements and the related notes for the year ended December 31, 2018. The consolidated financial information as of December 31, 2018 included herein has been derived from the Audited Consolidated Financial Statements as of December 31, 2018.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  In the opinion of management, the accompanying Unaudited Consolidated Financial Statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. Tabular dollar amounts are in millions, with the exception of share and per share amounts. All amounts are reported in U.S. dollars, except where noted otherwise.

Recently adopted changes in accounting principles

Leases

Effective January 1, 2019, Sirius Group adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Accounting Standards Codification (“ASC”) 842) which requires lessees to recognize lease assets and liabilities on the balance sheet for both operating and financing leases, with the exception of leases with an original term of 12 months or less. Under previous guidance, recognition of lease assets and liabilities was not required for operating leases. The new guidance requires that lease assets and liabilities to be recognized and measured initially based on the present value of the lease payments. Sirius Group adopted the new guidance using the simplified transition option that allows companies to apply the new lease standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption.  Sirius Group also made the following elections:

· Sirius Group elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases upon transition.

· Sirius Group did not elect the hindsight practical expedient upon transition, for all leases.

· Sirius Group elected the short-term lease measurement and recognition exemption, resulting in lease payments being recorded as an expense on a straight-line basis over the lease term.

· Sirius Group elected to include both lease and non-lease components as a single component for all leases.

· Sirius Group did not elect the land easement practical expedient as it was not applicable.

As a result of the adoption of the new guidance, Sirius Group recognized a lease liability of $36.8 million, which represents the present value of our remaining lease payments and a right-of-use asset of $34.4 million as of January 1, 2019. The adoption of this guidance did not materially impact our results of operations or cash flows. Due to the adoption of the standard using the retrospective cumulative-effect adjustment method, there are no changes to our previously reported results prior to January 1, 2019. Lease expense is not expected to change materially as a result of the adoption of the new guidance. (See Note 18.)

Premium amortization on callable debt securities

Effective January 1, 2019, Sirius Group adopted ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities (ASC 310-20), which changes the amortization period for certain purchased callable debt securities. Under the new guidance, for investments in callable debt securities held at a premium, the premium will be amortized over the period to the earliest call date. The new guidance does not change the amortization period for callable debt securities held at a discount.  The adoption of this guidance did not have significant effect on our financial statements.

Recent accounting pronouncements

Credit losses

In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (ASC 326), which establishes new guidance for the recognition of credit losses for financial assets measured at amortized cost. The new guidance, which applies to financial assets that have the contractual right to receive cash, including reinsurance receivables and recoverables, requires reporting entities to estimate the credit losses expected over the life of a credit exposure using historical information, current information and reasonable and supportable forecasts that affect the collectability of the financial asset. The new guidance is effective for annual and interim periods beginning after December 15, 2019. Sirius Group is evaluating the expected impact of this new guidance.

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Significant transactions

3 Months Ended

Mar. 31, 2019

Significant transactions

Significant transactions

Note 3. Significant transactions

Easterly Acquisition Corp.

On November 5, 2018, the Company completed the transactions contemplated by the definitive Agreement and Plan of Merger (“Merger Agreement”). Under the terms of the Merger Agreement, Easterly Acquisition Corp. (“Easterly”) merged with Sirius Acquisitions Holding Company III and became a wholly-owned subsidiary of the Company (the “Merger”). Upon the closing of the Merger, Easterly’s common stock was exchanged for the Company’s common shares at an exchange ratio (the “Exchange Ratio”) calculated as (i) the amount of cash per public share of Easterly common stock in Easterly’s trust account (the “Trust Account”) immediately prior to the closing of the Merger divided by (ii) (x) 1.05 multiplied by (y) Sirius Group’s adjusted diluted book value per common share as of September 30, 2018 (“Sirius Group September 30 Adjusted DBVPS”). Based on the Sirius Group September 30 Adjusted DBVPS, estimated as of September 30, 2018, and funds in the Trust Account on November 5, 2018, the Exchange Ratio was equal to 0.609. Following the Merger, the Company’s common shares are traded on the Nasdaq Global Select Market under the symbol “SG.”

Easterly held a special meeting of Easterly stockholders on November 2, 2018 to approve the completion of the transactions contemplated by the Merger Agreement. Easterly Acquisition Sponsor, LLC (the “Sponsor”) and Easterly’s other stockholders approved each of the proposals presented at the special meeting. After the special meeting, but prior to the consummation of the Merger, certain Easterly public stockholders exercised their redemption rights as provided for by Easterly’s charter. In total, out of the Trust Account balance of $149.0 million, there were $109.7 million of redemptions by Easterly public stockholders, which decreased the amount of cash in the Trust Account available for general corporate purposes following the Merger. After the redemption of shares held by Easterly’s public stockholders, there was $39.3 million in the Trust Account. This resulted in the issuance of 2,280,241 common shares to Easterly public stockholders.

Pursuant to the letter agreement among Easterly, the Sponsor and the Company (the “Sponsor Letter”), the private placement warrants issued to the Sponsor at the closing of the Merger were cancelled. Pursuant to the Merger Agreement, each issued and outstanding public warrant was converted into a warrant exercisable for Company common shares. The number of Company common shares subject to converted warrants was equal to the number of shares of Easterly common stock subject to each Easterly warrant immediately prior to the closing of the Merger multiplied by the Exchange Ratio, and each converted warrant had an exercise price per Company common share equal to the exercise price per share of Easterly common stock subject to such Easterly warrant immediately prior to the closing of the Merger divided by the Exchange Ratio. This resulted in the issuance of 6,088,535 converted warrants.

Sirius Group Private Placement

In connection with the closing of the Merger, the Company completed a private placement of Series B preference shares, common shares, and warrants (the “Sirius Group Private Placement”) at a price per share equal to (i) 1.05 multiplied by (ii) the Sirius Group September 30 Adjusted DBVPS, or $17.22447. Investors in the Sirius Group Private Placement included affiliated funds of Gallatin Point Capital, The Carlyle Group, Centerbridge Partners, L.P. and Bain Capital Credit (the "Preference Share Investors"), together with certain employees, directors and “friends & family.  The Sirius Group Private Placement raised proceeds of $226.1 million, resulting in the purchase of:

· 11,901,670 Series B preference shares with a cost basis of $195.8 million,

· 1,225,954 of Common shares with a cost basis of $20.8 million,

· 5,418,434 warrants that are exercisable for common shares for a period of five years after the Merger at a strike price equal to 125% of the per share purchase price, or $21.53 with a cost basis of $9.6 million.

· Issuance costs of $2.0 million

ESPP

In connection with the Merger, Sirius Group implemented the Employee Share Purchase Plan (“ESPP”), which provided all employees of Sirius Group with a one-time opportunity to purchase between 100 and 1,000 Company common shares at a price equal to 85% of market value for the first 100 shares and 100% of market value for the next 900 shares. For this purpose, market value of the Company common shares was equal to 1.05 times the Sirius Group September 30 Adjusted DBVPS.  Employees had the option of paying for the shares upfront or, in the case of employees who are not executive officers, through a loan that is repaid over a two-year period through payroll deductions. Through the ESPP, 405 employees purchased 149,236 Company common shares prior to the consummation of the Merger, with a cost basis of $2.6 million.

Gross proceeds of the cash in the Easterly Trust Account assumed by Sirius Group upon the closing of the Merger, the Sirius Group Private Placement, and the ESPP sum to $268.0 million.

Common shares redemption agreement

In connection with the Merger, the Company and CM Bermuda Ltd. (“CM Bermuda”), the sole holder of the Company’s common shares prior to the Merger, entered into a redemption agreement, dated November 2, 2018 (the “CM Bermuda Redemption Agreement”), pursuant to which, effective as of the closing of the Merger, the Company redeemed 9,519,280 of the Company’s common shares at a price per share equal to $17.22447 for $164.0 million, which was paid on November 16, 2018.

Also in connection with the Merger, on November 16, 2018 the Company completed a post-closing adjustment of $1.6 million that was settled in cash with CM Bermuda based on the reported book value per share of $16.44 as of September 30, 2018, pursuant to the Merger Agreement.

Sirius Group incurred certain contractual costs associated with the Merger of $9.0 million and $7.1 million of various legal, advisory, and other consulting costs for the Merger and the Private Placement that were charged to Additional paid-in surplus.

Series A preference shares redemption agreement

In connection with the Merger, the Company, IMG Acquisition Holdings, LLC (“IMGAH”) and Sirius Acquisitions Holding Company II completed the transactions contemplated by its previously announced redemption agreement and the Company redeemed all of the outstanding Series A redeemable preference shares, which were held by IMGAH, for $95.0 million in cash.  Effective as of the completion of the redemption, the parties terminated the registration rights agreement and the shareholder’s agreement between the Company and IMGAH.  In addition, the parties agreed that any remaining contingent consideration in respect of the IMG acquisition, will be paid in cash, not in Series A redeemable preference shares as previously contemplated in the agreement in respect of the IMG acquisition.

WRM America Indemnity Company, Inc.

On August 16, 2018, Sirius Group acquired 100% ownership of WRM America Indemnity Company, Inc. (“WRM America”) from WRM America Indemnity Holding Company, LLC for $16.9 million in cash. WRM America is a New York-domiciled insurer with a run-off book of business mainly comprised of general liability, educator’s legal liability, automobile liability and physical damage, property and excess catastrophe liability. As part of the purchase of WRM America, Sirius Group acquired $3.1 million of indefinite lived intangible assets related to insurance licenses.

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Segment information

3 Months Ended

Mar. 31, 2019

Segment information

Segment information

Note 4. Segment information

Sirius Group classifies its business into four reportable segments – Global Property, Global A&H, Specialty & Casualty , and Runoff & Other. The accounting policies of the reportable segments are the same as those used for the preparation of the Company’s consolidated financial statements.

The Company’s Global Property, Global A&H, Specialty & Casualty, and Runoff & Other reportable segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company’s chief operating decision maker, the Chief Executive Officer (“CEO”) of the Company. The CEO assesses segment operating performance, allocates capital, and makes resource allocation decisions based on Technical profit (loss), Underwriting profit (loss), and Underwriting profit (loss), including net service fee revenue.

Segment results are shown prior to corporate eliminations. Corporate eliminations are shown to reconcile to consolidated Technical profit (loss), consolidated Underwriting profit (loss) and consolidated Underwriting profit (loss), including net service fee revenue. 

Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets, and, accordingly, investment income is not allocated to each segment.

Global Property

Global Property consists of Sirius Group’s underwriting lines of business which offer other property insurance and reinsurance, property catastrophe excess reinsurance, and agriculture reinsurance on a worldwide basis:

Other Property—Sirius Group participates in the broker market for property reinsurance treaties written on a proportional and excess of loss basis. For Sirius Group’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. In the United States, the book predominantly centers on significant participations on proportional and excess of loss treaties mostly in the excess and surplus lines segment of the market.

Property Catastrophe Excess—Property catastrophe excess of loss reinsurance treaties cover losses from catastrophic events. Sirius Group writes a worldwide book with the largest concentration of exposure in Europe and the United States. The U.S. book written in Bermuda has a national account focus supporting principally the lower and/or middle layers of large capacity programs. Additionally, Stockholm writes a U.S. book mainly consisting of select small regional and standard lines carriers. The exposures written in the international book are diversified across many countries, regions, perils and layers.

Agriculture—Sirius Group provides stop-loss reinsurance coverage to companies writing U.S. government-sponsored multi-peril crop insurance (“MPCI”). Sirius Group’s participation is net of the government’s stop-loss reinsurance protection. Sirius Group also provides coverage for crop-hail and certain named perils when bundled with MPCI business. Sirius Group also writes agriculture business outside of the United States.

Global A&H

The Global A&H operating segment consists of Sirius Group’s insurance, reinsurance, and managing general underwriting (“MGU”) units (which include Armada and IMG) that offer accident and health products on a worldwide basis:

Accident and Health insurance and reinsurance—Sirius Group is an insurer of accident and health insurance business in the United States, either on an admitted or surplus lines basis, as well as international business written through wholly-owned IMG. Armada business is written on an admitted basis. Sirius Group also writes proportional and excess reinsurance treaties covering employer medical stop-loss for per person (specific) and per employer (aggregate) exposures. In addition, Sirius Group writes some medical, health, travel and personal accident coverages written on a treaty, facultative and primary basis.

Specialty & Casualty

Specialty & Casualty consists of Sirius Group’s insurance and reinsurance underwriting units which offer specialty & casualty product lines on a worldwide basis.  Specialty lines represent unique risks where the more difficult and unusual risks are underwritten. Because specialty lines tend to be the more unusual or higher risks, much of the market is characterized by a high degree of specialization:

Aviation & Space provides aviation insurance that covers loss of or damage to an aircraft and the aircraft operations’ liability to passengers, cargo and hull as well as to third parties. Additionally, liability arising out of non-aircraft operations such as hangars, airports and aircraft products can be covered. Space insurance primarily covers loss of or damage to a satellite during launch and in orbit. The book consists of treaty, written on both a proportional and excess of loss basis, facultative, and primary business.

Marine provides marine reinsurance, primarily written on an excess of loss and proportional basis. Coverage offered includes damage to ships and goods in transit, marine liability lines, and offshore energy industry insurance. Sirius Group also writes yacht business, both on reinsurance and a primary basis. The marine portfolio is diversified across many countries and regions.

Trade Credit writes credit and bond reinsurance worldwide. The bulk of the business is traditional short-term commercial credit insurance, covering pre-agreed domestic and export sales of goods and services with typical coverage periods of 60 to 120 days. Losses under these policies are correlated to adverse changes in a respective country’s gross national product.

Contingency underwrites contingency insurance for event cancellation and non-appearance, primarily on a primary policy and facultative reinsurance basis. Additionally, coverage for liabilities arising from contractual bonus, prize redemption and over-redemption is also offered. The contingency portfolio is diversified across many countries and regions. 

Casualty underwrites a cross section of all casualty lines, including general liability, umbrella, auto, workers compensation, professional liability, and other specialty classes, written on a proportional, excess of loss, and primary basis.

Surety underwrites commercial surety bonds, including non-construction contract bonds, in a broad range of business segments in the United States.

Environmental underwrites a pure environmental insurance book in the United States consisting of four core products that revolve around pollution coverage, which are premises pollution liability, contractor’s pollution liability, contractor’s pollution and professional liability.

Runoff & Other

Runoff & Other consists of asbestos risks, environmental risks and other long-tailed liability exposures, and underwriting results from Sirius Global Solutions Holding Company (“Sirius Global Solutions”) and its subsidiaries. Sirius Global Solutions is a Connecticut-based division of Sirius Group specializing in the acquisition and management of runoff liabilities for insurance and reinsurance companies, both in the United States and internationally.

The following tables summarize the segment results for the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31, 2019
	Global			Global			Specialty &			Runoff &		Corporate
(Millions)	Property			A&H			Casualty			Other		Elimination		Total
Gross written premiums	$	330.7		$	169.3		$	120.9		$	1.4	$	—	$	622.3
Net written premiums	$	241.3		$	134.9		$	108.2		$	0.4	$	—	$	484.8
Net earned insurance and reinsurance premiums	$	139.7		$	96.1		$	75.7		$	0.4	$	—	$	311.9
Loss and allocated LAE(1)		(62.6)			(63.2)			(47.6)			(1.1)		—		(174.5)
Insurance and reinsurance acquisition expenses		(25.8)			(26.6)			(20.5)			(0.7)		10.3		(63.3)
Technical profit (loss)		51.3			6.3			7.6			(1.4)		10.3		74.1
Unallocated LAE(2)		(2.1)			(1.5)			(1.9)			(0.5)		(3.4)		(9.4)
Other underwriting expenses		(16.2)			(6.1)			(8.2)			(2.1)		(2.7)		(35.3)
Underwriting (loss) income		33.0			(1.3)			(2.5)			(4.0)		4.2		29.4
Service fee revenue(3)		—			36.3			—			—		(11.0)		25.3
Managing general underwriter unallocated LAE(4)		—			(4.1)			—			—		4.1		—
Managing general underwriter other underwriting expenses(5)		—			(2.7)			—			—		2.7		—
General and administrative expenses, MGU + Runoff & Other(6)		—			(16.2)			—			(0.8)		—		(17.0)
Underwriting  (loss) income, including net service fee income		33.0			12.0			(2.5)			(4.8)		—		37.7
Net investment income															20.1
Net realized investment gains (losses)															9.0
Net unrealized investment gains															74.0
Net foreign exchange gains (losses)															5.1
Other revenue(7)															(5.7)
General and administrative expenses(8)															(7.4)
Intangible asset amortization expenses															(3.9)
Interest expense on debt															(7.6)
Pre-tax income														$	121.3
Underwriting Ratios
Loss ratio		46.3	%		67.3	%		65.4	%		NM		NM		59.0	%
Acquisition expense ratio		18.5	%		27.7	%		27.1	%		NM		NM		20.3	%
Other underwriting expense ratio		11.6	%		6.3	%		10.8	%		NM		NM		11.3	%
Combined ratio (9)		76.4	%		101.3	%		103.3	%		NM		NM		90.6	%
Goodwill and intangible assets(10)	$	—		$	584.2		$	—		$	8.1	$	—	$	592.3

⁽¹⁾ Loss and allocated loss adjustment expenses (“LAE”) are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽²⁾ Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽³⁾ Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁴⁾ Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other.

⁽⁵⁾ Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process.

⁽⁶⁾ General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁷⁾ Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁸⁾ General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁹⁾ Ratios considered not meaningful (“NM”) to Runoff & Other and Corporate Elimination.

⁽¹⁰⁾ Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets.

	For the three months ended March 31, 2018
	Global			Global			Specialty &			Runoff &		Corporate
(Millions)	Property			A&H			Casualty			Other		Elimination		Total
Gross written premiums	$	346.6		$	145.6		$	115.5		$	7.5	$	—	$	615.2
Net written premiums	$	247.2		$	115.5		$	100.6		$	6.1	$	—	$	469.4
Net earned insurance and reinsurance premiums	$	136.1		$	88.0		$	54.4		$	6.0	$	—	$	284.5
Loss and allocated LAE(1)		(70.4)			(45.8)			(21.6)			2.4		—		(135.4)
Insurance and reinsurance acquisition expenses		(29.3)			(29.2)			(14.1)			(0.7)		10.3		(63.0)
Technical profit		36.4			13.0			18.7			7.7		10.3		86.1
Unallocated LAE(2)		(1.9)			(1.6)			(1.2)			(0.9)		—		(5.6)
Other underwriting expenses		(17.4)			(8.0)			(8.0)			(1.4)		(8.4)		(43.2)
Underwriting income		17.1			3.4			9.5			5.4		1.9		37.3
Service fee revenue(3)		—			32.8			—			—		(10.3)		22.5
Managing general underwriter unallocated LAE(4)		—			—			—			—		—		—
Managing general underwriter other underwriting expenses(5)		—			(8.4)			—			—		8.4		—
General and administrative expenses, MGU + Runoff & Other(6)		—			(9.5)			—			(1.1)		—		(10.6)
Underwriting income (loss), including net service fee income		17.1			18.3			9.5			4.3		—		49.2
Net investment income															10.8
Net realized investment gains (losses)															(3.7)
Net unrealized investment gains															16.0
Net foreign exchange gains  (losses)															(3.5)
Other revenue(7)															0.9
General and administrative expenses(8)															(3.7)
Intangible asset amortization expenses															(3.9)
Interest expense on debt															(7.7)
Pre-tax income														$	54.4
Underwriting Ratios
Loss ratio		53.1	%		53.9	%		41.9	%		NM		NM		49.6	%
Acquisition expense ratio		21.5	%		33.2	%		25.9	%		NM		NM		22.1	%
Other underwriting expense ratio		12.8	%		9.1	%		14.7	%		NM		NM		15.2	%
Combined ratio (9)		87.4	%		96.2	%		82.5	%		NM		NM		86.9	%
Goodwill and intangible assets(10)	$	—		$	608.6		$	—		$	5.0	$	—	$	613.6

⁽¹⁾ Loss and allocated loss adjustment expenses (“LAE”) are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽²⁾ Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽³⁾ Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁴⁾ Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other.

⁽⁵⁾ Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process.

⁽⁶⁾ General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁷⁾ Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁸⁾ General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁹⁾ Ratios considered not meaningful (“NM”) to Runoff & Other and Corporate Elimination.

⁽¹⁰⁾ Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets.

The following tables provide summary information regarding net premiums written by client location and underwriting location by reportable segment for the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31, 2019
	Global		Global		Specialty &		Runoff &
(Millions)	Property		A&H		Casualty		Other		Total
Net written premiums by client location:
United States	$	61.9	$	111.1	$	68.4	$	0.2	$	241.6
Europe		124.8		8.0		24.8		0.1		157.7
Canada, the Caribbean, Bermuda and Latin America		24.5		5.0		4.4		-		33.9
Asia and Other		30.1		10.8		10.6		0.1		51.6
Total net written premium by client location	$	241.3	$	134.9	$	108.2	$	0.4	$	484.8
Net written premiums by underwriting location:
United States	$	8.0	$	40.3	$	12.4	$	0.2	$	60.9
Europe		154.6		63.6		54.6		0.1		272.9
Canada, the Caribbean, Bermuda and Latin America		62.4		30.7		40.2		—		133.3
Asia and Other		16.3		0.3		1.0		0.1		17.7
Total written premiums by underwriting location	$	241.3	$	134.9	$	108.2	$	0.4	$	484.8

	For the three months ended March 31, 2018
	Global		Global		Specialty &		Runoff &
(Millions)	Property		A&H		Casualty		Other		Total
Net written premiums by client location:
United States	$	87.0	$	87.5	$	37.3	$	6.1	$	217.9
Europe		106.3		11.6		50.3		—		168.2
Canada, the Caribbean, Bermuda and Latin America		23.2		4.8		2.6		—		30.6
Asia and Other		30.7		11.6		10.4		—		52.7
Total net written premium by client location	$	247.2	$	115.5	$	100.6	$	6.1	$	469.4
Net written premiums by underwriting location:
United States	$	5.3	$	21.0	$	(0.1)	$	6.1	$	32.3
Europe		136.5		68.6		72.0		—		277.1
Canada, the Caribbean, Bermuda and Latin America		89.8		25.7		27.5		—		143.0
Asia and Other		15.6		0.2		1.2		—		17.0
Total written premiums by underwriting location	$	247.2	$	115.5	$	100.6	$	6.1	$	469.4

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Reserves for unpaid losses and loss adjustment expenses

3 Months Ended

Mar. 31, 2019

Reserves for unpaid losses and loss adjustment expenses

Reserves for unpaid losses and loss adjustment expenses

Note 5. Reserves for unpaid losses and loss adjustment expenses

The following table summarizes the loss and LAE reserve activities of Sirius Group for the three months ended March 31, 2019 and 2018:

	Three Months Ended
	March 31,
(Millions)	2019		2018
Gross beginning balance	$	2,016.7	$	1,898.5
Less beginning reinsurance recoverable on unpaid losses		(350.2)		(319.7)
Net loss and LAE reserve balance		1,666.5		1,578.8
Losses and LAE incurred relating to:
Current year losses		167.3		143.5
Prior years losses		16.6		(2.5)
Total net incurred losses and LAE		183.9		141.0
Foreign currency translation adjustment to net loss and LAE reserves		(3.4)		6.7
Loss and LAE paid relating to:
Current year losses		36.2		31.3
Prior years losses		183.8		147.1
Total loss and LAE payments		220.0		178.4
Net ending balance		1,627.0		1,548.1
Plus ending reinsurance recoverable on unpaid losses		349.3		327.8
Gross ending balance	$	1,976.3	$	1,875.9

Loss and LAE development - Three Months Ended March 31, 2019

For the three months ended March 31, 2019, Sirius Group had net unfavorable loss reserve development of $16.6 million. The most significant increases in loss reserve estimates were recorded in Global Property ($11.6 million) and Global A&H ($5.1 million). The unfavorable loss reserve development in Global Property was primarily attributable to higher than expected reporting from prior year catastrophe events ($15.6 million) mainly Hurricanes Irma, Michael, and Florence.  Unfavorable loss reserve development in Runoff & Other ($1.2 million) was more than offset by favorable loss reserve development in Specialty & Casualty ($1.3 million).

Loss and LAE development - Three Months Ended March 31, 2018

For the three months ended March 31, 2018, Sirius Group had net favorable loss reserve development of $2.5 million. The major reductions in loss reserve estimates were recorded in Runoff & Other ($8.9 million),Specialty & Casualty ($7.1 million), and Global A&H ($3.7 million). Favorable loss reserve development for Runoff & Other included reduction in World Trade Center claims in response to revised information received by the Company. These reductions were partially offset by increases in Global Property loss reserve development of $17.2 million resulting from higher than expected reporting from recent accident years, including $6.4 million of increases from natural catastrophes, including the 2017 North American natural catastrophes. Also, in Other Property, there was loss deterioration from recent accident years reported in client account statements received in the first quarter, which accounted for the remainder of Global Property unfavorable loss development in the first quarter 2018.

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Third party reinsurance

3 Months Ended

Mar. 31, 2019

Third party reinsurance

Third party reinsurance

Note 6. Third party reinsurance

In the normal course of business, Sirius Group seeks to protect its businesses from losses due to concentration of risk and losses arising from catastrophic events by reinsuring with third-party reinsurers. Sirius Group remains liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts.

At March 31, 2019, Sirius Group had reinsurance recoverables on paid losses of $50.5 million and reinsurance recoverables of $349.3 million on unpaid losses. At December 31, 2018, Sirius Group had reinsurance recoverables on paid losses of $55.0 million and reinsurance recoverables of $350.2 million on unpaid losses. Because retrocessional reinsurance contracts do not relieve Sirius Group of its obligation to its insureds, the collectability of balances due from Sirius Group’s reinsurers is important to its financial strength. Sirius Group monitors the financial strength and ratings of retrocessionaires on an ongoing basis. Uncollectible amounts historically have not been significant.

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Investment securities

3 Months Ended

Mar. 31, 2019

Investment securities

Investment securities

Note 7. Investment securities

Sirius Group’s invested assets consist of investment securities and other long-term investments held for general investment purposes. The portfolio of investment securities includes fixed maturity investments, short-term investments, equity securities, and other long-term investments, which are all classified as trading securities. Realized and unrealized investment gains and losses on trading securities are reported in pre-tax revenues.

Net investment income

Sirius Group’s net investment income is comprised primarily of interest income along with associated amortization of premium and accretion of discount on Sirius Group’s fixed maturity investments, dividend income from its equity investments, and interest income from its short-term investments.

Net investment income for the three months ended March 31, 2019 and 2018 consisted of the following:

	For the three months ended
	March 31,
(Millions)	2019		2018
Fixed maturity investments	$	16.8	$	9.9
Short-term investments		0.4		0.8
Equity securities		2.7		1.2
Other long-term investments		3.9		1.2
Total investment income		23.8		13.1
Investment expenses		(3.7)		(2.3)
Net investment income	$	20.1	$	10.8

Net realized investment gains (losses) and unrealized investment gains

Net realized investment gains (losses) and unrealized investment gains for the three months ended March 31, 2019 and 2018 consisted of the following:

	For the three months ended March 31,
(Millions)	2019		2018
Gross realized gains	$	14.1	$	8.4
Gross realized (losses)		(5.1)		(12.1)
Net realized gains (losses) on investments(1)		9.0		(3.7)
Net unrealized gains on investments(2)		74.0		16.0
Net realized and unrealized investment gains on investments	$	83.0	$	12.3

⁽¹⁾ Includes $10.9 and $(1.1) of realized gains (losses) due to foreign currency during 2019 and 2018, respectively.

⁽²⁾ Includes $25.0 and $18.9 ofunrealized gains due to foreign currency during 2019 and 2018, respectively.

Net realized investment gains (losses)

Net realized investment gains (losses) for the three months ended March 31, 2019 and 2018 consisted of the following:

	For the three months ended March 31,
(Millions)	2019		2018
Fixed maturity investments	$	6.8	$	(2.8)
Short-term investments		0.1		—
Equity securities		(0.6)		(1.5)
Other long-term investments		3.3		0.6
Derivative instruments(1)		(0.6)		—
Net realized investment gains (losses)	$	9.0	$	(3.7)

(1) See Note 11.

Net unrealized investment gains

Net unrealized investment gains for the three months ended March 31, 2019 and 2018 consisted of the following:

	For the three months ended March 31,
(Millions)	2019		2018
Fixed maturity investments	$	29.7	$	3.0
Short-term investments		2.7		—
Equity securities		25.1		6.4
Other long-term investments		17.1		6.6
Derivative instruments(1)		(0.6)		—
Net unrealized investment gains	$	74.0	$	16.0

(1) See Note 11.

The following table summarizes the amount of total gains included in earnings attributable to unrealized investment gains for Level 3 investments for the three months ended March 31, 2019 and 2018:

	For the three months ended
	March 31,
(Millions)	2019		2018
Other long-term investments	$	8.8	$	0.4
Total unrealized investment gains - Level 3 investments	$	8.8	$	0.4

Investment holdings

Fixed maturity investments

The cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses), and fair value of Sirius Group’s fixed maturity investments as of March 31, 2019 and December 31, 2018, were as follows:

	March 31, 2019
							Net foreign
	Cost or		Gross		Gross		currency
	amortized		unrealized		unrealized		gains		Fair
(Millions)	cost		gains		losses		(losses)		value
Corporate debt securities	$	614.6	$	3.0	$	(2.7)	$	13.2	$	628.1
Asset-backed securities		476.7		0.3		(3.9)		3.8		476.9
Residential mortgage-backed securities		415.1		5.2		(3.9)		9.4		425.8
U.S. government and government agency		151.9		0.3		(0.2)		6.4		158.4
Commercial mortgage-backed securities		113.6		0.4		(1.6)		1.2		113.6
Non-U.S. government and government agency		37.8		—		(0.1)		0.8		38.5
Preferred stocks		2.5		0.1		—		(0.1)		2.5
U.S. States, municipalities and political subdivision		2.6		—		—		—		2.6
Total fixed maturity investments	$	1,814.8	$	9.3	$	(12.4)	$	34.7	$	1,846.4

	December 31, 2018
							Net foreign
	Cost or		Gross		Gross		currency
	amortized		unrealized		unrealized		gains		Fair
(Millions)	cost		gains		losses		(losses)		value
Corporate debt securities	$	694.1	$	1.4	$	(7.3)	$	7.6	$	695.8
Asset-backed securities		496.3		0.1		(3.8)		1.9		494.5
Residential mortgage-backed securities		413.0		1.7		(7.1)		5.9		413.5
U.S. government and government agency		163.9		0.3		(0.5)		4.2		167.9
Commercial mortgage-backed securities		117.7		0.2		(2.7)		0.7		115.9
Non-U.S. government and government agency		50.6		—		(0.2)		(0.1)		50.3
Preferred stocks		14.5		0.6		(6.8)		0.2		8.5
U.S. States, municipalities and political subdivision		2.8		—		—		—		2.8
Total fixed maturity investments	$	1,952.9	$	4.3	$	(28.4)	$	20.4	$	1,949.2

The weighted average duration of Sirius Group’s fixed income portfolio as of March 31, 2019 was approximately 1.6 years, including short-term investments, and approximately 2.2 years excluding short-term investments.

The cost or amortized cost and fair value of Sirius Group’s fixed maturity investments as of March 31, 2019 and December 31, 2018 are presented below by contractual maturity. Actual maturities could differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.

	March 31, 2019				December 31, 2018
	Cost or		Fair		Cost or		Fair
(Millions)	amortized cost		value		amortized cost		value
Due in one year or less	$	241.7	$	250.0	$	249.6	$	254.6
Due after one year through five years		554.3		566.8		635.6		636.4
Due after five years through ten years		10.9		10.8		26.2		25.7
Due after ten years		—		—		0.1		0.1
Mortgage-backed and asset-backed securities		1,005.4		1,016.3		1,026.9		1,023.9
Preferred stocks		2.5		2.5		14.5		8.5
Total	$	1,814.8	$	1,846.4	$	1,952.9	$	1,949.2

The following table summarizes the ratings and fair value of fixed maturity investments held in Sirius Group’s investment portfolio as of March 31, 2019 and December 31, 2018:

(Millions)	March 31, 2019		December 31, 2018
AAA	$	575.6	$	602.0
AA		799.8		818.0
A		254.2		290.5
BBB		154.4		167.4
Other		62.4		71.3
Total fixed maturity investments(1)	$	1,846.4	$	1,949.2

⁽¹⁾ Credit ratings are assigned based on the following hierarchy: 1) Standard & Poor's (“S&P”) and 2) Moody's Investors Service (“Moody’s”).

At March 31, 2019, the above totals included $37.6 million of sub-prime securities. Of this total, $12.7 million was rated AAA, $11.5 million rated AA, $4.4 million rated A, $4.1 million rated BBB and $4.9 million classified as Other. At December 31, 2018, the above totals included $42.6 million of sub-prime securities. Of this total, $17.1 million was rated AAA, $9.8 million rated AA, $6.0 million rated A, $4.7 million rated BBB and $5.0 million classified as Other.

Equity securities and Other long-term investments

The cost or amortized cost, gross unrealized investment gains and losses, net foreign currency gains and losses, and fair values of Sirius Group’s equity securities and other long-term investments as of March 31, 2019 and December 31, 2018, were as follows:

	March 31, 2019
	Cost or		Gross		Gross		Net foreign
	amortized		unrealized		unrealized		currency		Fair
(Millions)	cost		gains		losses		gains		value
Equity securities	$	398.4	$	26.2	$	(38.7)	$	8.5	$	394.4
Other long-term investments	$	351.7	$	48.3	$	(20.5)	$	10.2	$	389.7

	December 31, 2018
	Cost or		Gross		Gross		Net foreign
	amortized		unrealized		unrealized		currency		Fair
(Millions)	cost		gains		losses		gains		value
Equity securities	$	409.4	$	17.8	$	(50.8)	$	3.6	$	380.0
Other long-term investments	$	337.6	$	32.6	$	(13.5)	$	8.3	$	365.0

Other long-term investments at fair value consisted of the following as at March 31, 2019 and December 31, 2018:

(Millions)	March 31, 2019		December 31, 2018
Hedge funds and private equity funds	$	301.7	$	301.4
Limited liability companies and private equity securities		88.0		63.6
Total other long-term investments	$	389.7	$	365.0

Hedge Funds and Private Equity Funds

Sirius Group holds investments in hedge funds and private equity funds, which are included in other long-term investments. The fair value of these investments has been estimated using the net asset value of the funds. As of March 31, 2019, Sirius Group held investments in 9 hedge funds and 28 private equity funds. The largest investment in a single fund was $50.8 million as of March 31, 2019 and $54.8 million as of December 31, 2018.

The following table summarizes investments in hedge funds and private equity interests by investment objective and sector as of March 31, 2019 and December 31, 2018:

	March 31, 2019				December 31, 2018
			Unfunded				Unfunded
(Millions)	Fair Value		Commitments		Fair Value		Commitments
Hedge funds:
Long/short multi-sector	$	49.5	$	—	$	41.0	$	—
Distressed mortgage credit		50.8		—		54.8		—
Private Credit		20.3		—		20.0		—
Other		2.5		—		2.5		—
Total hedge funds		123.1		—		118.3		—
Private equity funds:
Energy infrastructure & services		87.5		30.7		93.7		54.2
Multi-sector		9.2		0.7		9.0		0.7
Healthcare		31.7		15.6		31.7		15.6
Life settlement		23.9		—		23.7		—
Manufacturing/Industrial		23.6		3.1		23.6		10.4
Private equity secondaries		1.1		1.1		1.1		1.1
Real estate		0.3		—		0.3		—
Other		1.3		2.0		—		—
Total private equity funds		178.6		53.2		183.1		82.0
Total hedge and private equity funds included in other long-term investments	$	301.7	$	53.2	$	301.4	$	82.0

Redemption of investments in certain hedge funds is subject to restrictions including lock-up periods where no redemptions or withdrawals are allowed, restrictions on redemption frequency, and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period.

The following summarizes the March 31, 2019 fair value of hedge funds subject to restrictions on redemption frequency and advance notice period requirements for investments in active hedge funds:

	Notice Period
Redemption Frequency	30-59 days		60-89 days		90-119 days		120+ days
(Millions)	notice		notice		notice		notice		Total
Monthly	$	—	$	32.7	$	—	$	—	$	32.7
Quarterly		0.8		—		—		—		0.8
Semi-annual		—		0.8		—		—		0.8
Annual		—		16.9		51.6		20.3		88.8
Total	$	0.8	$	50.4	$	51.6	$	20.3	$	123.1

Certain of the hedge fund and private equity fund investments in which Sirius Group is invested are no longer active and are in the process of disposing of their underlying investments. Distributions from such funds are remitted to investors as the fund’s underlying investments are liquidated. As of March 31, 2019, no distributions were outstanding from these investments. Investments in private equity funds are generally subject to a “lock-up” period during which investors may not request a redemption. Distributions prior to the expected termination date of the fund may be limited to dividends or proceeds arising from the liquidation of the fund’s underlying investments.

In addition, certain private equity funds provide an option to extend the lock-up period at either the sole discretion of the fund manager or upon agreement between the fund and the investors.

As of March 31, 2019, investments in private equity funds were subject to lock-up periods as follows:

(Millions)	1 - 3 years		3 – 5 years		5 – 10 years		Total
Private Equity Funds – expected lock-up period remaining	$	12.6	$	4.3	$	161.7	$	178.6

Investments held on deposit or as collateral

As of March 31, 2019 and December 31, 2018 investments of $764.9 million and $792.4 million, respectively, were held in trusts required to be maintained in relation to various reinsurance agreements. Sirius Group’s reinsurance operations are required to maintain deposits with certain insurance regulatory agencies in order to maintain their insurance licenses. The fair value of such deposits that are included within total investments totaled $779.5 million and $801.2 million as of March 31, 2019 and December 31, 2018, respectively.

As of March 31, 2019, Sirius Group held $0.2 million of collateral in the form of short-term investments associated with Interest Rate Cap agreements. (See Note 11.)

Unsettled investment purchases and sales

As of March 31, 2019 and December 31, 2018, Sirius Group reported $9.9 million and $3.2 million, respectively, in Accounts payable on unsettled investment purchases.

As of March 31, 2019 and December 31, 2018, Sirius Group reported $1.7 million and $5.0 million, respectively, in Accounts receivable on unsettled investment sales.

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Fair value measurements

3 Months Ended

Mar. 31, 2019

Fair value measurements

Fair value measurements

Note 8. Fair value measurements

Fair value measurements are categorized into a hierarchy that distinguishes between inputs based on market data from independent sources (“observable inputs”) and a reporting entity's internal assumptions based upon the best information available when external market data is limited or unavailable (“unobservable inputs”). Quoted prices in active markets for identical assets or liabilities have the highest priority (“Level 1”), followed by observable inputs other than quoted prices, including prices for similar but not identical assets or liabilities (“Level 2”), and unobservable inputs, including the reporting entity's estimates of the assumptions that market participants would use, having the lowest priority (“Level 3”).

The availability of observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety factors including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the instrument. 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.

Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This may lead the Company to change the selection of the valuation technique (for example, from market to cash flow approach) or to use multiple valuation techniques to estimate the fair value of a financial instrument. These circumstances could cause an instrument to be reclassified between levels within the fair value hierarchy. Investments valued using Level 1 inputs include fixed maturity investments, primarily investments in U.S. Treasuries Bills and Notes, equity securities, and short-term investments. Investments valued using Level 2 inputs are primarily comprised of fixed maturity investments, which have been disaggregated into classes, including U.S. government and government agency, corporate debt securities, mortgage-backed and asset-backed securities, non-U.S. government and government agency, U.S. state and municipalities and political sub division and preferred stocks. Investments valued using Level 2 inputs also include certain exchange-traded funds that track U.S. stock indices such as the S&P 500 but are traded on foreign exchanges.  Fair value estimates for investments that trade infrequently and have few or no observable market prices are classified as Level 3 measurements. Sirius Group determines when transfers between levels have occurred as of the beginning of the period.

Valuation techniques

Sirius Group uses outside pricing services to assist in determining fair values for its investments. For investments in active markets, Sirius Group uses the quoted market prices provided by outside pricing services to determine fair value. The outside pricing services Sirius Group uses have indicated that they will only provide prices where observable inputs are available. In circumstances where quoted market prices are unavailable or are not considered reasonable, Sirius Group estimates the fair value using industry standard pricing models and observable inputs such as benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, prepayment speeds, reference data including research publications, and other relevant inputs. Given that many fixed maturity investments do not trade on a daily basis, the outside pricing services evaluate a wide range of fixed maturity investments by regularly drawing parallels from recent trades and quotes of comparable securities with similar features. The characteristics used to identify comparable fixed maturity investments vary by asset type and take into account market convention.

The valuation process above is generally applicable to all of Sirius Group’s fixed maturity investments. The techniques and inputs specific to asset classes within Sirius Group’s fixed maturity investments for Level 2 securities that use observable inputs are as follows:

U.S. government and government agency

U.S. government and government agency securities consist primarily of debt securities issued by the U.S. Treasury and mortgage pass-through agencies such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. Fixed maturity investments included in U.S. government and government agency securities are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources and integrate other observations from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The fair value of each security is individually computed using analytical models that incorporate option-adjusted spreads and other daily interest rate data.

Non-U.S. government and government agency

Non-U.S. government and government agency securities consist of debt securities issued by non-U.S. governments and their agencies along with supranational organizations (also known as sovereign debt securities). Securities held in these sectors are primarily priced by pricing services that employ proprietary discounted cash flow models to value the securities. Key quantitative inputs for these models are daily observed benchmark curves for treasury, swap, and high issuance credits. The pricing services then apply a credit spread for each security, which is developed by in-depth and real-time market analysis. For securities in which trade volume is low, the pricing services utilize data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets.

Corporate debt securities

Corporate debt securities consist primarily of investment-grade debt of a wide variety of U.S. and non-U.S. corporate issuers and industries. The corporate fixed maturity investments are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources regarding the issuer of the security and obtain credit data, as well as other observations, from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features that may influence risk. 

Mortgage-backed and asset-backed securities

The fair value of mortgage and asset-backed securities is primarily priced by pricing services using a pricing model that utilizes information from market sources and leveraging similar securities. Key inputs include benchmark yields, reported trades, underlying tranche cash flow data and collateral performance, plus new issue data, as well as broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including issuer, vintage, loan type, collateral attributes, prepayment speeds, default rates, recovery rates, cash flow stress testing, credit quality ratings, and market research publications.

U.S. states, municipalities and political subdivisions

The U.S. states, municipalities and political subdivisions portfolio contains debt securities issued by U.S. domiciled state and municipal entities. These securities are generally priced by independent pricing services using the techniques described for U.S. government and government agency securities described above.

Preferred stocks

The fair value of preferred stocks is generally priced by independent pricing services using an evaluated pricing model that calculates the appropriate spread over a comparable security for each issue. Key inputs include exchange prices (underlying and common stock of the same issuer), benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including sector, coupon, credit quality ratings, duration, credit enhancements, early redemption features, and market research publications.

Level 3 investments

Level 3 valuations are generated from techniques that use assumptions not observable in the market. These unobservable assumptions reflect Sirius Group’s assumptions about what market participants would use in valuing the investment. Generally, certain securities may start out as Level 3 when they are originally issued but, as observable inputs become available in the market, they may be reclassified to Level 2.

Sirius Group employs a number of procedures to assess the reasonableness of the fair value measurements for its other long-term investments, including obtaining and reviewing the audited annual financial statements of hedge funds and private equity funds and periodically discussing each fund’s pricing with the fund manager. However, since the fund managers do not provide sufficient information to evaluate the pricing inputs and methods for each underlying investment, the inputs are considered to be unobservable.

The fair values of Sirius Group’s investments in private equity securities and private debt instruments have been classified as Level 3 measurements. They are carried at fair value and are initially valued based on transaction price. Their valuation is subsequently estimated based on available evidence such as a market transaction in similar instruments and other financial information for the issuer.

Investments measured using net asset value

The fair value of Sirius Group’s investments in hedge funds and private equity funds has been determined using net asset value (“NAV”). The hedge fund’s administrator provides quarterly updates of fair value in the form of Sirius Group’s proportional interest in the underlying fund’s NAV, which is deemed to approximate fair value, generally with a three month delay in valuation. The fair value of investment in hedge funds is measured using the NAV practical expedient and therefore has been not categorized within the fair value hierarchy. The private equity funds provide quarterly or semi-annual partnership capital statements with a three or six month delay which are used as a basis for valuation. These private equity investments vary in investment strategies and are not actively traded in any open markets. Due to a lag in reporting, some of the fund managers, fund administrators, or both, are unable to provide final fund valuations as of the Company’s reporting date. In these circumstances, Sirius Group estimates the return of the current period and uses all credible information available. This includes utilizing preliminary estimates reported by its fund managers and using other information that is available to Sirius Group with respect to the underlying investments, as necessary.

Fair value measurements by level

The following tables summarize Sirius Group’s financial assets and liabilities measured at fair value as of March 31, 2019 and December 31, 2018 by level:

	March 31, 2019
	Fair		Level 1		Level 2		Level 3
(Millions)	Value		Inputs		Inputs		Inputs
Assets measured at fair value
Fixed maturity investments:
U.S. Government and government agency	$	158.4	$	157.0	$	1.4	$	—
Corporate debt securities		628.1		—		628.1		—
Residential mortgage-backed securities		425.8		—		425.8		—
Asset-backed securities		476.9		—		476.9		—
Commercial mortgage-backed securities		113.6		—		113.6		—
Non-U.S. government and government agency		38.5		33.9		4.6		—
Preferred stocks		2.5		—		2.5		—
U.S. States, municipalities, and political subdivision		2.6		—		2.6		—
Total fixed maturity investments		1,846.4		190.9		1,655.5		—
Short-term investments		833.6		792.5		41.1		—
Equity securities		394.4		393.5		0.9		—
Other long-term investments(1)		88.0		—		—		88.0
Total investments	$	3,162.4	$	1,376.9	$	1,697.5	$	88.0
Derivative instruments		0.8		0.5		—		0.3
Total assets measured at fair value	$	3,163.2	$	1,377.4	$	1,697.5	$	88.3
Liabilities measured at fair value
Contingent consideration liabilities	$	28.8	$	—	$	—	$	28.8
Derivative instruments		5.3		0.2		—		5.1
Total liabilities measured at fair value	$	34.1	$	0.2	$	—	$	33.9

⁽¹⁾ Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient.

	December 31, 2018
	Fair		Level 1		Level 2		Level 3
(Millions)	Value		inputs		inputs		inputs
Assets measured at fair value
Fixed maturity investments:
U.S. Government and government agency	$	167.9	$	164.7	$	3.2	$	—
Corporate debt securities		695.8		—		695.8		—
Asset-backed securities		494.5		—		494.5		—
Residential mortgage-backed securities		413.5		—		413.5		—
Commercial mortgage-backed securities		115.9		—		115.9		—
Non-U.S. government and government agency		50.3		42.9		7.4		—
Preferred stocks		8.5		—		3.1		5.4
U.S. States, municipalities, and political subdivision		2.8		—		2.8		—
Total fixed maturity investments		1,949.2		207.6		1,736.2		5.4
Short-term investments		715.5		679.3		36.2		—
Equity securities		380.0		380.0		—		—
Other long-term investments(1)		63.6		—		—		63.6
Total investments	$	3,108.3	$	1,266.9	$	1,772.4	$	69.0
Derivative instruments		4.1		—		—		4.1
Total assets measured at fair value	$	3,112.4	$	1,266.9	$	1,772.4	$	73.1
Liabilities measured at fair value
Contingent consideration liabilities	$	28.8	$	—	$	—	$	28.8
Derivative instruments		5.1		0.5		—		4.6
Total liabilities measured at fair value	$	33.9	$	0.5	$	—	$	33.4

⁽¹⁾ Excludes fair value of $301.4 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient.

Rollforward of Level 3 fair value measurements

The following tables present changes in Level 3 for financial instruments measured at fair value for the three months ended March 31, 2019 and 2018:

		For the Three Months Ended March 31, 2019
					Derivative
			Other		instruments		Contingent
	Fixed		long-term		assets &		consideration
(Millions)	Maturities		investments(1)		(liabilities)		(liabilities)
Balance at January 1, 2018	$	5.4	$	63.6	$	(0.5)	$	(28.8)
Total realized and unrealized gains		—		9.3		(5.1)		—
Foreign currency losses through Other Comprehensive Income		—		(0.7)		—		—
Purchases		—		15.8		—		—
Sales/Settlements		(5.4)		—		0.8		—
Balance at March 31, 2019	$	—	$	88.0	$	(4.8)	$	(28.8)

⁽¹⁾ Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient.

	For the Three Months Ended March 31, 2018
					Derivative
			Other		instruments		Contingent
	Fixed		long-term		assets &		consideration
(Millions)	Maturities		investments(1)		(liabilities)		(liabilities)
Balance at January 1, 2018	$	8.0	$	64.2	$	(6.1)	$	(42.8)
Total realized and unrealized gains		—		0.8		—		—
Foreign currency losses through Other Comprehensive Income		—		(0.3)		—		—
Purchases		0.6		0.4		—		—
Sales/Settlements		—		(0.2)		—		—
Balance at March 31, 2018	$	8.6	$	64.9	$	(6.1)	$	(42.8)

⁽¹⁾ Excludes fair value of $221.9 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient.

Fair value measurements – transfers between levels

There were no transfers between Level 3 and Level 2 measurements during the three months ended March 31, 2019 and 2018.

Significant unobservable inputs

The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments as of March 31, 2019 and December 31, 2018, and includes only those instruments for which information about the inputs is reasonably available to Sirius Group, such as data from independent third-party valuation service providers and from internal valuation models.

(Millions, except share prices)	March 31, 2019
Description	Valuation Technique(s)	Fair Value		Unobservable Input
Private equity securities(1)	Share price of recent transaction	$	32.5	Purchase share price	$	40.63
Preferred stock(1)	Share price of recent transaction	$	17.5	Purchase price	$	7.74
Private equity securities(1)	Multiple of GAAP book value	$	16.8	Book value multiple		1.0X
Private debt instrument(1)	Purchase price of recent transaction	$	7.8	Purchase price	$	9.0
Private debt instrument(1)	Purchase price of recent transaction	$	6.0	Purchase price	$	6.0
Private equity securities(1)	Share price of recent transaction	$	5.1	Purchase price	$	7.74
Private equity securities(1)	Purchase price of recent transaction	$	1.0	Purchase price	$	10.0
Private equity securities(1)	Purchase price of recent transaction	$	0.8	Purchase price	$	0.8
Private equity securities(1)	Purchase price of recent transaction	$	0.3	Purchase price	$	0.3
Private debt instrument (1)	Purchase price of recent transaction	$	0.2	Purchase price	$	0.2
Currency forwards(2)	Third party appraisal	$	0.2	Broker quote	$	0.2
Interest rate cap(2)	Third party appraisal	$	0.1	Broker quote	$	0.1
Weather derivatives(2)	Third party appraisal	$	(1.3)	Broker quote	$	(1.3)
Currency swaps (2)	Third party appraisal	$	(3.8)	Broker quote	$	(3.8)
Contingent consideration	External valuation model	$	(28.8)	Discounted future payments	$	(28.8)

⁽¹⁾ As of March 31, 2019, each asset type consists of one security.

⁽²⁾ See Note 11 for discussion of derivative instruments.

(Millions)	December 31, 2018
Description	Valuation technique(s)	Fair value		Unobservable input
Private equity securities (1)	Share price of recent transaction	$	32.5	Purchase share price	$	40.63
Private equity securities (1)	Multiple of GAAP book value	$	14.7	Book value multiple		0.9X
Private debt instrument (1)	Purchase price of recent transaction	$	9.0	Purchase price	$	9.0
Private debt instrument (1)	Purchase price of recent transaction	$	6.0	Purchase price	$	6.0
Preferred stock (1)	Share price of recent transaction	$	4.6	Purchase price	$	1.88
Weather derivatives (2)	Third party appraisal	$	3.9	Broker quote	$	3.9
Private equity securities(1)	Purchase price of recent transaction	$	0.9	Purchase price	$	1.88
Preferred stock (1)	Share price of recent transaction	$	0.8	Purchase price	$	0.8
Private equity securities(1)	Share price of recent transaction	$	0.3	Purchase price	$	10.0
Private debt instrument (1)	Purchase price of recent transaction	$	0.2	Purchase price	$	0.2
Interest rate cap (2)	Third party appraisal	$	0.2	Broker quote	$	0.2
Currency swaps (2)	Third party appraisal	$	(4.6)	Broker quote	$	(4.6)
Contingent consideration	External valuation model	$	(28.8)	Discounted future payments	$	(28.8)

⁽¹⁾ As of December 31, 2018, each asset type consists of one security.

⁽²⁾ See Note 11 for discussion of derivative instruments.

Financial instruments disclosed, but not carried at fair value

Sirius Group uses various financial instruments in the normal course of its business. The carrying values of Cash, Accrued investment income, certain other assets, Accounts payable on unsettled investment purchases, certain other liabilities, and other financial instruments not included in the table below approximated their fair values at March 31, 2019 and December 31, 2018, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 3. The following table includes financial instruments for which the carrying value differs from the estimated fair values at March 31, 2019 and December 31, 2018:

	March 31, 2019				December 31, 2018
(Millions)	Fair Value(1)		Carrying Value		Fair Value(1)		Carrying Value
Liabilities, Mezzanine equity, and Non-controlling interest:
2017 SEK Subordinated Notes	$	297.0	$	292.7	$	309.5	$	303.6
2016 SIG Senior Notes	$	361.7	$	393.4	$	347.6	$	393.2
Series B preference shares	$	200.2	$	240.6	$	191.7	$	232.2

⁽¹⁾ Fair value estimated by internal pricing and considered a Level 3 measurement.

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Debt and standby letters of credit facilities

3 Months Ended

Mar. 31, 2019

Debt and standby letters of credit facilities

Debt and standby letters of credit facilities

Note 9. Debt and standby letters of credit facilities

Sirius Group’s debt outstanding as of March 31, 2019 and December 31, 2018 consisted of the following:

	March 31,		Effective		December 31,		Effective
(Millions)	2019		Rate (1)		2018		Rate (1)
2017 SEK Subordinated Notes, at face value	$	296.6	3.7	%	$	307.6	3.8	%
Unamortized issuance costs		(3.9)				(4.0)
2017 SEK Subordinated Notes, carrying value		292.7				303.6
2016 SIG Senior Notes, at face value		400.0	4.7	%		400.0	4.7	%
Unamortized discount		(2.5)				(2.6)
Unamortized issuance costs		(4.1)				(4.2)
2016 SIG Senior Notes, carrying value		393.4				393.2
Total debt	$	686.1			$	696.8

⁽¹⁾ Effective rate considers the effect of the debt issuance costs.

2017 SEK Subordinated Notes

On September 22, 2017, Sirius Group issued floating rate callable subordinated notes denominated in Swedish kronor (“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”).  The 2017 SEK Subordinated Notes were issued in an offering that was exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”).  The 2017 SEK Subordinated Notes bear interest on their principal amount at a floating rate equal to the applicable Stockholm Interbank Offered Rate (“STIBOR”) for the relevant interest period plus an applicable margin, payable quarterly in arrears on March 22, June 22, September 22, and December 22 in each year commencing on December 22, 2017, until maturity in September 2047.

Beginning on September 22, 2022, the 2017 SEK Subordinated Notes may be redeemed, in whole or in part, at Sirius Group’s option. In addition, within 90 days following the occurrence of a Specified Event (as defined below), the 2017 SEK Subordinated Notes may be redeemed, in whole but not in part, at Sirius Group’s option. “Specified Event” means (a) an “Additional Amounts Event” in connection with a change in laws, rules or regulations as a result of which Sirius Group is  obligated to pay additional amounts on the notes in respect of any withholding or deduction for taxes,  (b) a “Tax Event” in connection with a change in laws, rules or regulations as a result of which interest  on the notes is no longer fully deductible by Sirius Group for income tax purposes in the applicable jurisdiction (to the extent that such interest was so deductible as of the time of such Tax Event), (c) a “Rating Methodology Event” in connection with a change in, or clarification to, the rating methodology of Standard & Poor’s or Fitch that results in a materially unfavorable capital treatment of the notes, or  (d) a “Regulatory Event” in connection with a change in, or clarification to, applicable supervisory regulations that results in the notes no longer qualifying as Tier 2 Capital.

Sirius Group incurred $4.6 million in expenses related to the issuance of the 2017 SEK Subordinated Notes (including SEK 27.5 million, or $3.5 million, in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2017 SEK Subordinated Notes. For the three months ended March 31, 2019 and 2018, Sirius Group recognized $11.0 million and $5.8 million, respectively, of foreign currency exchange gains on the remeasurement of the 2017 SEK Subordinated Notes into U.S. dollars (“USD”) from SEK.

Taking into effect the amortization of all underwriting and issuance expenses, and applicable STIBOR, the 2017 SEK Subordinated Notes yield an annualized effective rate of approximately 3.7% and 3.5% for the three months ended March 31, 2019 and 2018, respectively. Sirius Group recorded $2.8 million and $2.9 million of interest expense, inclusive of amortization of issuance costs on the 2017 SEK Subordinated Notes for the three months ended March 31, 2019 and 2018, respectively.

2016 SIG Senior Notes

On November 1, 2016, Sirius Group issued $400.0 million face value of senior unsecured notes (“2016 SIG Senior Notes”) at an issue price of 99.209% for net proceeds of $392.4 million after taking into effect both deferrable and non-deferrable issuance costs. The 2016 SIG Senior Notes were issued in an offering that was exempt from the registration requirements of the Securities Act. The 2016 SIG Senior Notes bear an annual interest rate of 4.6%, payable semi-annually in arrears on May 1, and November 1, in each year commencing on May 1, 2017, until maturity in November 2026.

Sirius Group incurred $5.1 million in expenses related to the issuance of the 2016 SIG Senior Notes (including $3.4 million in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2016 SIG Senior Notes.

Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the 2016 SIG Senior Notes yield an effective rate of approximately 4.7% per annum. Sirius Group recorded $4.8 million, inclusive of amortization of issuance costs on the 2016 SIG Senior Notes, for both of the three month periods ended March 31, 2019 and 2018, respectively.

Standby letter of credit facilities

On November 9, 2018, Sirius International renewed two standby letter of credit facility agreements totaling $160 million to provide capital support for Lloyd's Syndicate 1945. The first letter of credit is a renewal of a $125 million facility with Nordea Bank Finland Abp, London Branch, which is issued on an unsecured basis. The second letter of credit is a $35 million facility with DNB Bank ASA, Sweden Branch, $25 million of which is issued on an unsecured basis. Each facility is renewable annually. The above referenced facilities are subject to various affirmative, negative and financial covenants that the Company considers to be customary for such borrowings, including certain minimum net worth, maximum debt to capitalization standards , and change in control provisions.

Sirius International has other secured letter of credit and trust arrangements with various financial institutions to support its insurance operations.  As of March 31, 2019 and December 31, 2018, these secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust of SEK 2.7 billion and SEK 2.9 billion, respectively, or $296.0 million and $321.3 million , respectively (based on the March 31, 2019 and December 31, 2018 SEK to USD exchange rates). As of March 31, 2019 and December 31, 2018, Sirius America Insurance Company’s trust arrangements were collateralized by pledged assets and assets in trust of $56.7 million and $56.2 million, respectively. As of March 31, 2019 and December 31, 2018, Sirius Bermuda’s trust arrangements were collateralized by pledged assets and assets in trust of $347.2 million and $319.7 million, respectively.

Revolving credit facility

In February 2018, Sirius Group, through its indirectly wholly-owned subsidiary Sirius International Group, Ltd. entered into a three-year, $300 million senior unsecured revolving credit facility (the "Facility"). The Facility provides access to loans for working capital and general corporate purposes, and letters of credit to support obligations under insurance and reinsurance agreements and retrocessional agreements. The Facility is subject to various affirmative, negative and financial covenants that Sirius Group considers to be customary for such borrowings, including certain minimum net worth, maximum debt to capitalization, financial strength rating standards , and change in control provisions. As of March 31, 2019, there were no outstanding borrowings under the Facility.

Debt and standby letter of credit facility covenants

As of March 31, 2019, Sirius Group was in compliance with all of the covenants under the 2017 SEK Subordinated Notes, the 2016 SIG Senior Notes, the Nordea Bank Finland Abp, London Branch facility, and the DNB Bank ASA, Sweden Branch facility. In addition, as of March 31, 2019, Sirius Group was in compliance with all of the covenants under the Facility.

Interest

Total interest expense incurred by Sirius Group for its indebtedness for the three months ended March 31, 2019 and 2018 was $7.6 million and $7.7 million, respectively. Total interest paid by Sirius Group for its indebtedness for the three months ended March 31, 2019 and 2018 was $2.7 million and $2.9 million, respectively.

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Income taxes

3 Months Ended

Mar. 31, 2019

Income taxes

Income taxes

Note 10. Income taxes

The Company and its Bermuda-domiciled subsidiaries are not subject to Bermuda income tax under current Bermuda law. In the event there is a change in the current law such that taxes are imposed, the Company and its Bermuda-domiciled subsidiaries would be exempt from such tax until March 31, 2035, pursuant to the Bermuda Exempted Undertakings Tax Protection Act of 1966. The Company has subsidiaries and branches that operate in various other jurisdictions around the world that are subject to tax in the jurisdictions in which they operate. The jurisdictions in which the Company’s subsidiaries and branches are subject to tax are Australia, Belgium, Canada, Denmark, Germany, Gibraltar, Hong Kong (China), Luxembourg, Malaysia, the Netherlands, Shanghai (China), Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

Sirius Group reported an income tax expense of $17.2 million and $11.1 million during the three months ended March 31, 2019 and 2018, respectively, on pre-tax income of $121.3 and $54.4 million, respectively. The effective tax rate for the three months of 2019 was 14.2%, which was lower than the Swedish statutory rate of 21.4% (the rate at which the majority of Sirius Group’s worldwide operations are taxed) primarily because of income recognized in jurisdictions with lower rates than Sweden. The effective tax rate for the three months ended March 31, 2018 was 20.3%, which was lower than the Swedish statutory rate of 22% primarily because of income recognized in jurisdictions with lower rates than Sweden and non-recurring adjustments to Sirius Group’s deferred tax assets which resulted from various internal restructurings. In arriving at the effective tax rate for the three months ended March 31, 2019 and 2018, Sirius Group forecasted all income and expense items including the change in unrealized investment gains (losses) and realized investment gains (losses) for the years ending December 31, 2019 and 2018.

The Tax Cuts and Jobs Act (the “TCJA”) was enacted into law in the U.S. in December 2017.  The Company previously applied Staff Accounting Bulletin 118 (“SAB 118”), which provided guidance on accounting for the tax effects of the TCJA. SAB 118 addresses situations where accounting for certain income tax effects of the TCJA under ASC 740, Income Taxes (“ASC 740”), may be incomplete upon issuance of an entity’s financial statements and provides a one-year measurement period from the enactment date to complete the accounting under ASC 740. The Company has completed its accounting for all material tax effects of the TCJA and recognized adjustments as of December 31, 2018.

The TCJA includes a new Base Erosion and Anti-Abuse Minimum Tax (“BEAT”) provision, which is essentially a minimum tax that is potentially applicable to certain otherwise deductible payments made by U.S. entities to non-U.S. affiliates, including cross-border interest payments and reinsurance premiums. The statutory BEAT rate is 10% in 2019-2025, and then rises to 12.5% in 2026 and thereafter. The TCJA also includes provisions for Global Intangible Low-Taxed Income (“GILTI”) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries. Consistent with accounting guidance, Sirius Group will treat BEAT as an in period tax charge when incurred in future periods for which no deferred taxes need to be provided and has made an accounting policy election to treat GILTI taxes in a similar manner. No provision for income taxes related to BEAT or GILTI was recorded as of March 31, 2019 and December 31, 2018.

Sirius Group has capital and liquidity in many of its subsidiaries, some of which may reflect undistributed earnings. If such capital or liquidity were to be paid or distributed to the Company or Sirius Group’s 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. However, the applicable tax laws in relevant countries are still evolving, including in response to guidance from the Organisation for Economic Cooperation and Development. 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 attempt to apply income or withholding tax to past earnings or payments.

Deferred tax asset, net of valuation allowance

Sirius Group’s net deferred tax liability, net of the valuation allowance as of March 31, 2019 was $59.0 million. Of the $59.0 million, $33.1 million relates to net deferred tax assets in U.S. subsidiaries, $131.5 million relates to net deferred tax assets in Luxembourg subsidiaries, $11.5 million relates to net deferred tax assets in United Kingdom subsidiaries, $230.6 million relates to net deferred tax liabilities in Sweden subsidiaries, and $4.5 million relates to other net deferred tax liabilities.

Sirius Group records a valuation allowance against deferred tax assets if it becomes more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in income tax expense in the period of change. In determining whether or not a valuation allowance, or change therein, is warranted, Sirius Group considers factors such as prior earnings history, expected future earnings, carryback and carryforward periods and strategies that if executed would result in the realization of a deferred tax asset. It is possible that certain planning strategies or projected earnings in certain subsidiaries may not be feasible to utilize the entire deferred tax asset, which could result in material changes to Sirius Group’s deferred tax assets and tax expense.

Uncertain tax positions

Recognition of the benefit of a given tax position is based upon whether a company determines that it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. In evaluating the more likely than not recognition threshold, Sirius Group must presume that the tax position will be subject to examination by a taxing authority with full knowledge of all relevant information. 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 March 31, 2019, the total reserve for unrecognized tax benefits is $63.3 million. If Sirius Group determines in the future that its reserves for unrecognized tax benefits on permanent differences and interest and penalties are not needed, the reversal of $63.2 million of such reserves as of March 31, 2019 would be recorded as an income tax benefit and would impact the effective tax rate. If Sirius Group determines in the future that its reserves for unrecognized tax benefits on temporary differences are not needed, the reversal of $0.1 million of such reserves as of March 31, 2019 would not impact the effective tax rate due to deferred tax accounting but would accelerate the payment of cash to the taxing authority. Most of Sirius Group’s reserves for unrecognized tax benefits on permanent differences relate to interest deductions denied by the Swedish Tax Authority (“STA”), as described further below.

The Swedish Tax Authority ("STA") has denied deductions claimed by two of the Company's Swedish subsidiaries in certain tax years for interest paid on intra-group debt instruments. Sirius Group has challenged the STA's denial in court based on the technical merits. In October 2018, one of the Swedish subsidiaries received an adverse decision from Sweden's Administrative Court, which Sirius Group has appealed. Sirius Group has taken into account this and other relevant developments in applicable Swedish tax law and has established a reserve for this uncertain tax position. As of March 31, 2019, the total amount of such reserve was $63.0 million.

In connection with this matter, Sirius Group has also taken into account the Stock Purchase Agreement (“SPA”) by which Sirius Group was sold to CMIG International Holding Pte. Ltd (‘‘CMIG International’’) in 2016 and has recorded an indemnification asset. Pursuant to the SPA, the seller agreed to indemnify the buyer and Sirius Group for, among other things, (1) any additional tax liability in excess of Sirius Group’s accounting for uncertain tax positions for tax periods prior to the sale of Sirius Group to CMIG International, and (2) an impairment in Sirius Group’s net deferred tax assets resulting from a final determination by a tax authority. While Sirius Group intends to continue challenging the STA’s denial based on the technical merits (including appealing the adverse court decision received in October 2018), the ultimate resolution of these tax disputes is uncertain and no assurance can be given that there will be no material changes to Sirius Group’s operating results or balance sheet in connection with these uncertain tax positions or the related indemnification.

With few exceptions, Sirius Group is no longer subject to U.S. federal, state or non-U.S. income tax examinations by tax authorities for years before 2014.

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Derivatives

3 Months Ended

Mar. 31, 2019

Derivatives

Derivatives

Note 11. Derivatives

Interest Rate Cap

Sirius Group entered into an interest rate swap (“Interest Rate Cap”) with two financial institutions where it paid an upfront premium and in return receives a series of quarterly payments based on the 3-month London Interbank Offered Rate (“LIBOR”) at the time of payment. The Interest Rate Cap does not qualify for hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Other revenue. The fair value of the interest rate cap has been estimated using a single broker quote and, accordingly, has been classified as a Level 3 measurement as of March 31, 2019 and December 31, 2018. Collateral held is recorded within short-term investments with an equal amount recognized as a liability to return collateral. Sirius Group’s liability to return that collateral is based on the amounts provided by the counterparties and investment earnings thereon. The following table summarizes the Interest Rate Cap collateral balances held by Sirius Group and ratings by counterparty:

	March 31, 2019
		Collateral Balances	S & P
(Millions)	Held		Rating(1)
Barclays Bank Plc	$	0.1	A
Nordea Bank Abp		0.1	AA-
Total	$	0.2

⁽¹⁾ Standard & Poor's ratings as detailed above are: "AA-" (Very Strong, which is the fourth highest of twenty-three creditworthiness ratings) and "A" (Strong, which is the sixth highest of twenty-three credit worthiness ratings).

Foreign currency swaps

Sirius Group executes foreign currency swaps to manage foreign currency exposure. The foreign currency swaps have not been designated or accounted for under hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Net foreign exchange gains (losses).  The fair value of the foreign currency swaps has been estimated using a single broker quote and, accordingly, has been classified as a Level 3 measurement as of March 31, 2019 and December 31, 2018. Sirius Group does not provide or hold any collateral associated with the swaps.

Foreign currency forward

Sirius Group executes foreign currency forwards to manage currency exposure against a foreign currency investment. The foreign currency forwards are not designated or accounted for under hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Net foreign exchange gains (losses). The fair value of the foreign currency forwards are estimated using a single broker quote and accordingly, classified as a Level 3 measurement. Sirius Group did not provide or hold any collateral associated with the forwards.

Weather derivatives

Sirius Group holds assets and assumes liabilities related to weather and weather contingent risk management products. Weather and weather contingent derivative contracts are entered into with the objective of generating profits in normal climatic conditions. Accordingly, Sirius Group’s weather and weather contingent derivatives are not designed to meet the criteria for hedge accounting under GAAP.  Sirius Group receives payment of premium at the contract inception in exchange for bearing the risk of variations in a quantifiable weather index. Changes in fair value are recognized as unrealized gains or losses and are presented within Other revenue. The fair value of the weather derivatives was estimated using a broker quote. Because of the significance of the unobservable inputs used to estimate the fair value of Sirius Group’s weather risk contracts, the fair value measurements of the contracts are deemed to be Level 3 measurements in the fair value hierarchy as of March 31, 2019 and December 31, 2018. Sirius Group does not provide or hold any collateral associated with the weather derivatives.

Equity futures contracts

Sirius Group executes trades in equity futures contracts to hedge against long positions in Common equities. The equity futures contracts are not designated or accounted for under hedge accounting. Changes in fair value are presented within Net realized investment gains (losses).  The fair value of the equity put options is widely available and have quoted prices in active markets and accordingly, were classified as a Level 1 measurement.

Equity put options

Sirius Group executes trades in equity put options to hedge against long positions in Common equities. The equity put options are not designated or accounted for under hedge accounting. Changes in fair value are presented within Net unrealized investment (losses) gains.  The fair value of the equity put options is widely available and have quoted prices in active markets and accordingly, were classified as a Level 1 measurement.

The following tables summarize information on the classification and amount of the fair value of derivatives not designated as hedging instruments within the Company’s Consolidated Balance Sheets as at March 31, 2019 and December 31, 2018:

(Millions)	March 31, 2019						December 31, 2018
			Asset		Liability				Asset		Liability
			derivative		derivative				derivative		derivative
	Notional		at fair		at fair		Notional		at fair		at fair
Derivatives not designated as hedging instruments	Value		value(1)		value(2)		Value		value(1)		value(2)
Interest rate cap	$	250.0	$	0.1	$	—	$	250.0	$	0.2	$	—
Foreign currency swaps	$	90.0	$	—	$	3.8	$	45.0	$	—	$	4.6
Foreign currency forwards	$	15.0	$	0.2	$	—	$	—	$	—	$	—
Weather derivatives	$	121.6	$	—	$	1.3	$	150.5	$	3.9	$	—
Equity futures contracts	$	(17.0)	$	—	$	0.2	$	—	$	—	$	—
Equity put options	$	10.9	$	0.5	$	—	$	6.2	$	—	$	0.5

⁽¹⁾ Asset derivatives are classified within Other assets within the Company’s Consolidated Balance Sheets at March 31, 2019 and December 31, 2018.

⁽²⁾ Liability derivatives are classified within Other liabilities within the Company’s Consolidated Balance Sheets at March 31, 2019 and December 31, 2018.

The following table summarizes information on the classification and net impact on earnings, recognized in the Company’s Consolidated Statements of (Loss) Income relating to derivatives during the three months ended March 31, 2019 and 2018:

		For the three months ended
(Millions)		March 31,
Derivatives not designated as	Classification of gains
hedging instruments	(losses) recognized
	in earnings	2019		2018
Interest rate cap	Other revenues	$	(0.1)	$	0.3
Foreign currency swaps	Net foreign exchange gains (losses)	$	0.8	$	1.3
Foreign currency forwards	Net foreign exchange gains (losses)	$	0.2	$	—
Weather derivatives	Other revenues	$	(6.0)	$	1.0
Equity futures contracts	Net realized investment gains (losses)	$	(0.6)	$	—
Equity futures contracts	Net unrealized investment gains	$	(0.2)	$	—
Equity put options	Net unrealized investment gains	$	(0.4)	$	—

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Share-based compensation

3 Months Ended

Mar. 31, 2019

Share-based compensation

Share-based compensation

Note 12. Share-based compensation

Sirius Group’s employee compensation plans include grants for various types of share-based and non share-based compensation awards to key employees of Sirius Group.  As at March 31, 2019, Sirius Group’s share-based compensation awards consist of performance shares units, restricted share units, and options.

For the three months ended March 31, 2019, Sirius Group granted employees 401,311 performance share units, 1,411,714 restricted share units, and 1,374,944 of officer stock options.

As at March 31, 2019 there were $34.3 million of unrecognized share-based compensation costs, which are expected to be recognized over the next two to 3 years.  There were no unrecognized share-based compensation costs as at March 31, 2018.

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Common shareholder equity's, mezzanine equity, and non-controlling interests

3 Months Ended

Mar. 31, 2019

Common shareholder's equity, mezzanine equity, and non-controlling interests

Common shareholder's equity, mezzanine equity, and non-controlling interests

Note 13. Common shareholder’s equity, mezzanine equity, and non-controlling interests

Common shareholder’s equity

The authorized share capital of the Company consists of 500,000,000 Common shares, $0.01 par value per share, and 100,000,000 Preference shares, $0.01 par value per share.

The following table presents changes in the Company’s issued and outstanding Common shares as at March 31, 2019 and 2018, respectively:

	Three Months Ended
	March 31,
(Millions)	2019	2018
Common shares:
Shares issued and outstanding, beginning of period	115,151,251	120,000,000
Issuance of shares to directors and employees	111,052	—
Shares issued and outstanding, end of period	115,262,303	120,000,000

Dividends

The Company did not pay dividends to common shareholders during the three months ended March 31, 2019 and 2018.

Mezzanine equity

Series B Preference Shares

On November 5, 2018, in connection with the closing of the Merger, Sirius Group issued 11,901,670 of the 15,000,000 designated Series B preference shares, with a par value of $0.01 per share, as part of the Sirius Group Private Placement. (See Note 3.) 

The Series B preference shares rank senior to common shares with respect to dividend rights, rights of liquidation, winding-up, or dissolution of the Company and junior to all of the Company’s existing and future policyholder obligations and debt obligations. Without the consent of the holders of the Series B preference shares, the Company may not issue any class or series of shares that rank senior or pari passu with the Series B preference shares as to the payment of dividends or as to distribution of assets upon any voluntary or involuntary liquidation, winding-up or dissolution of the Company, if the aggregate gross proceeds from the issuance of all such senior or pari passu shares equals or exceeds $100 million.

The Company adjusts the carrying value of the Series B preference shares to equal the redemption value at the end of each reporting period.  At March 31, 2019 and December 31, 2018, the balance of the Series B preference shares was $240.6 million and $232.2 million, respectively.

Series A Redeemable Preference Shares

In connection with the acquisition of IMG, the Company issued mandatorily convertible stock in the form of Series A redeemable preference shares as a portion of the consideration paid. The Company issued 100,000 of the 150,000 authorized Series A redeemable preference shares to the seller of IMG.  Each Series A redeemable preference share has a liquidation preference per share of $1,000.  

On November 5, 2018, in connection with the closing of the Merger, the Company redeemed the 100,000 outstanding shares of Series A redeemable preference shares for $95.0 million.  Sirius Group recorded a $13.8 million gain on the redemption of the Series A redeemable preference shares.

Non-controlling interests

Non-controlling interests consist of the ownership interests of non-controlling shareholders in consolidated entities and are presented separately on the balance sheet. At March 31, 2019 and December 31, 2018 Sirius Group’s balance sheet included $2.2 million and $1.7 million, respectively, in non-controlling interests.

The following tables show the change in non-controlling interest for the three months ended March 31, 2019 and 2018:

(Millions)	Total
Non-controlling interests as of December 31, 2018	$	1.7
Net income attributable to non-controlling interests		0.4
Other, net		0.1
Non-controlling interests as of March 31, 2019	$	2.2

(Millions)	Total
Non-controlling interests as of December 31, 2017	$	0.2
Net income attributable to non-controlling interests		0.2
Other, net		0.1
Non-controlling interests as of March 31, 2018	$	0.5

Alstead Re

As of March 31, 2019 and December 31, 2018, Sirius Group recorded non-controlling interest of $2.1 million and $1.7 million, respectively, in Alstead Re Insurance Company (“Alstead Re”). (See Note 16.)

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Earnings per share

3 Months Ended

Mar. 31, 2019

Earnings per share

Earnings per share

Note 14. Earnings per share

Basic earnings per share is computed by dividing net income available to Sirius Group common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) available to Sirius Group common shareholders on a diluted basis by the weighted-average number of common shares outstanding adjusted to give effect to potentially dilutive securities.

The Series B preference shares and the Series A redeemable preference shares both qualify as participating securities, which requires the application of the two-class method to compute both basic and diluted earnings per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common shareholders. The Series B preference shares and the Series A redeemable preference shares have no obligation to absorb losses of the Company in periods of net loss.

The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended March 31, 2019 and 2018:

	For the three months ended
	March 31,
(Millions, except share and per share information)	2019		2018
Basic earnings per share
Numerator:
Net income	$	104.1	$	43.3
Less: Income attributable to non-controlling interests		(0.4)		(0.2)
Less: Change in carrying value of Series B preference shares		(8.4)		—
Less: Accrued dividends on Series A redeemable preference shares		—		(2.6)
Net income available for dividends out of undistributed earnings	$	95.3	$	40.5
Less: Earnings attributable to Series B preference shares		(8.9)		—
Less: Earnings attributable to Series A redeemable preference shares		—		(1.7)
Net income available to Sirius Group common shareholders	$	86.4	$	38.8
Denominator:
Weighted average shares outstanding for basic earnings per share		115,182,331		120,000,000
Basic earnings per share	$	0.75	$	0.32
Diluted earnings per share
Numerator:
Net income available to Sirius Group common shareholders	$	86.4	$	38.8
Add: Change in carrying value of Series B preference shares		8.4		—
Net income available to Sirius Group common shareholders on a diluted basis	$	94.8	$	38.8
Denominator:
Weighted average shares outstanding for basic earnings per share		115,182,331		120,000,000
Add: Series B preference shares		11,901,670		—
Add: Unvested performance share units and restricted share units		251,313		—
Weighted average shares outstanding for diluted earnings per share(1)		127,335,314		120,000,000
Diluted earnings per share	$	0.74	$	0.32

⁽¹⁾ As at March 31, 2019, there were a total of 19,510,830 of potentially dilutive securities excluded from the calculation of Diluted earnings per share. As at March 31, 2018, there were no potentially dilutive securities excluded from the calculation of Diluted earnings per share.

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Investments in unconsolidated entities

3 Months Ended

Mar. 31, 2019

Investments in unconsolidated entities

Investments in unconsolidated entities

Note 15. Investments in unconsolidated entities

Sirius Group’s investments in unconsolidated entities are included within Other long-term investments and consist of investments in common equity securities or similar instruments, which give Sirius Group the ability to exert significant influence over the investee’s operating and financial policies (“equity method eligible unconsolidated entities”). Such investments may be accounted for under either the equity method or, alternatively, Sirius Group may elect to account for them under the fair value option.

The following table presents the components of Other long-term investments as of March 31, 2019 and December 31, 2018:

(Millions)	March 31, 2019		December 31, 2018
Equity method eligible unconsolidated entities, at fair value	$	167.5	$	169.4
Other unconsolidated investments, at fair value(1)		222.2		195.6
Total Other long-term investments(2)	$	389.7	$	365.0

⁽¹⁾ Includes Other long-term investments that are not equity method eligible.

⁽²⁾ There were no investments accounted for using the equity method as of March 31, 2019 and December 31, 2018.

Equity method eligible unconsolidated entities, at fair value

Sirius Group has elected the fair value option to account for its equity method eligible investments accounted for as part of Other long-term investments for consistency of presentation with the rest of its investment portfolio. The following table presents Sirius Group’s investments in equity method eligible unconsolidated entities as of March 31, 2019 and December 31, 2018 with ownership interest greater than 20%:

	Ownership interest at
	March 31,		December 31,
Investee	2019		2018		Instrument Held
BE Reinsurance Limited	25.0	%	25.0	%	Common shares
BioVentures Investors (Offshore) IV LP	73.0	%	73.0	%	Units
Camden Partners Strategic Fund V (Cayman), LP	39.4	%	36.4	%	Units
NEC Cypress Buyer LLC	23.5	%	13.3	%	Units
New Energy Capital Infrastructure Credit Fund LP(1)	18.3	%	22.9	%	Units
New Energy Capital Infrastructure Offshore Credit Fund LP(1)	12.2	%	54.9	%	Units
Scion G7, LP	28.3	%	28.8	%	Units
Tuckerman Capital V LP	48.3	%	47.6	%	Units
Tuckerman Capital V Co-Investment I LP	49.5	%	47.7	%	Units

⁽¹⁾ The ownership percentage of New Energy Capital Infrastructure Credit Fund LP and New Energy Capital Infrastructure Offshore Credit Fund LP was greater than 20% at December 31, 2018 but was less than 20% at March 31, 2019 and is included in the table for comparative purposes.

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Variable interest entities

3 Months Ended

Mar. 31, 2019

Variable interest entities

Variable interest entities

Note 16. Variable interest entities

Sirius Group consolidates the results of operations and financial position of every voting interest entity (“VOE”) in which it has a controlling financial interest and VIEs in which it is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VOE or VIE, depends on the facts and circumstances surrounding each entity.

Sirius Group has determined that Alstead Re is a VIE for which Sirius Group is the primary beneficiary and is required to consolidate it. The following table presents Alstead Re’s assets and liabilities, as classified in the Consolidated Balance Sheets as at March 31, 2019 and December 31, 2018:

(Millions)	March 31, 2019		December 31, 2018
Assets:
Fixed maturity investments, trading at fair value	$	3.9	$	4.0
Short-term investments, at fair value		0.4		0.3
Cash		0.2		0.2
Total investments		4.5		4.5
Insurance and reinsurance premiums receivable		1.5		0.1
Funds held by ceding companies		4.7		3.7
Deferred acquisition costs		0.5		5.2
Other assets		0.1		0.9
Total assets	$	11.3	$	14.4
Liabilities
Loss and loss adjustment expense reserves	$	3.0	$	4.6
Unearned insurance and reinsurance premiums		1.7		3.7
Other liabilities		0.1		—
Total liabilities	$	4.8	$	8.3

Sirius Group is a passive investor in certain third-party-managed hedge and private equity funds, some of which are VIEs. Sirius Group is not involved in the design or establishment of these VIEs, nor does it actively participate in the management of the VIEs. The exposure to loss from these investments is limited to the carrying value of the investments at the balance sheet date.

Sirius Group calculates maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of VIE assets or liabilities where Sirius Group has also provided credit protection to the VIE with the VIE as the referenced obligation, and (iii) other commitments and guarantees to the VIE. Sirius Group does not have any VIEs that it sponsors nor any VIEs where it has recourse to it or has provided a guarantee to the VIE interest holders.

The following table presents total assets of unconsolidated VIEs in which Sirius Group holds a variable interest, as well as the maximum exposure to loss associated with these VIEs:

			Maximum Exposure to Loss
	Total VIE		On-Balance		Off-Balance
(Millions)	Assets		Sheet		Sheet		Total
March 31, 2019
Other long-term investments(1)	$	220.6	$	118.5	$	25.3	$	143.8
Total at March 31, 2019	$	220.6	$	118.5	$	25.3	$	143.8
December 31, 2018
Other long-term investments(1)	$	209.1	$	103.1	$	32.0	$	135.1
Total at December 31, 2018	$	209.1	$	103.1	$	32.0	$	135.1

⁽¹⁾ Comprised primarily of hedge funds and private equity funds.

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Transactions with related parties

3 Months Ended

Mar. 31, 2019

Transactions with related parties

Transactions with related parties

Note 17. Transactions with related parties

(Re)insurance contracts

In the normal course of business, Sirius Group enters into insurance and reinsurance contracts with certain of its insurance and MGU affiliates, or their subsidiaries. During the three months ended March 31, 2019 and 2018, these contracts resulted in gross written premiums of $24.1 million and $19.3 million, respectively. As at March 31, 2019 and December 31, 2018, Sirius Group had total receivables due from affiliates of $19.4 million and 14.3 million, respectively. As at March 31, 2019, Sirius Group had total payables due to affiliates of $0.7 million.  As at December 31, 2018 Sirius Group did not have any payables due to affiliates.

Other

Meyer “Sandy” Frucher is the Company’s Interim Chairman of the board of directors and is also Vice Chairman of Nasdaq, Inc. The Company is traded on the Nasdaq Global Select Market and has business transactions that are related to its listing on the exchange under the normal course of business. (See Note 3.)

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Commitments and contingencies

3 Months Ended

Mar. 31, 2019

Commitments and contingencies

Commitments and contingencies

Note 18. Commitments and contingencies

Legal Proceedings

Sirius Group, and the insurance and reinsurance industry in general, are routinely subject to claims related litigation and arbitration in the normal course of business, as well as litigation and arbitration that do not arise from, or are directly related to, claims activity. Sirius Group estimates of the costs of settling matters routinely encountered in claims activity are reflected in the reserves for unpaid loss and LAE. (See Note 5.)

Sirius Group considers the requirements of ASC 450, Contingencies (“ASC 450”), when evaluating its exposure to non-claims related litigation and arbitration. ASC 450 requires that accruals be established for litigation and arbitration if it is probable that a loss has been incurred and it can be reasonably estimated. ASC 450 also requires that litigation and arbitration be disclosed if it is probable that a loss has been incurred or it there is a reasonable possibility that a loss may have been incurred.

Leases

Sirius Group leases office space and equipment under various noncancellable operating lease agreements. The average life of the office leases is 7 years and the equipment leases is 3 years.

During the three months ended March 31, 2019, Sirius Group recognized operating lease expense of $2.6 million, including property taxes and routine maintenance expense as well as rental expenses related to short term leases. As at March 31, 2019, Sirius Group had $32.0 million operating lease right-of-use assets included in Other assets.  As at March 31, 2019, Sirius Group had $33.9 million operating lease liability included in Other liabilities.

The following table presents the lease balances within the Consolidated Balance Sheets as at March 31, 2019:

(millions)	Balance Sheet Classification	March 31, 2019
Operating lease right-of-use assets	Other assets	$	32.0
Current lease liabilities	Other liabilities	$	9.8
Non-current lease liabilities	Other liabilities	$	24.1

The following table presents weighted average remaining lease term and weighted average discount rate as at March 31, 2019:

Weighted average lease term (years) as at March 31, 2019:
Leased offices	7.0 years
Leased equipment	3.0 years
Weighted average discount rate:
Leased offices	3.8	%
Leased equipment	3.4	%

The following table presents future annual minimum rental payments required under non-cancellable leases and the present value discount to arrive at total lease liability as at March 31, 2019:

(Millions)	Future Payments
2019	$	7.7
2020		8.9
2021		7.4
2022		6.6
2023		4.2
2024 and after		2.0
Total future annual minimum rental payments as at March 31, 2019		36.8
Less: present value discount		(2.9)
Total lease liability as at March 31, 2019	$	33.9

As of March 31, 2019, the Company's future operating lease obligations that have not yet commenced are immaterial.

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Summary of significant accounting policies (Policies)

3 Months Ended

Mar. 31, 2019

Summary of significant accounting policies

Basis of presentation

Basis of presentation

The accompanying Unaudited Consolidated Financial Statements at March 31, 2019, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. The accompanying Unaudited Consolidated Financial Statements present the consolidated results of operations, financial condition, and cash flows of the Company and its subsidiaries and those entities in which the Company has control and a majority economic interest as well as those variable interest entities (“VIEs”) that meet the requirements for consolidation. All intercompany transactions have been eliminated in consolidation.

These Unaudited Consolidated Financial Statements do not include all disclosures normally included in annual financial statements prepared in accordance with GAAP and should be read in conjunction with the Audited Consolidated Financial Statements and the related notes for the year ended December 31, 2018. The consolidated financial information as of December 31, 2018 included herein has been derived from the Audited Consolidated Financial Statements as of December 31, 2018.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.  In the opinion of management, the accompanying Unaudited Consolidated Financial Statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. Tabular dollar amounts are in millions, with the exception of share and per share amounts. All amounts are reported in U.S. dollars, except where noted otherwise.

Recently adopted changes in accounting principles

Recently adopted changes in accounting principles

Leases

Effective January 1, 2019, Sirius Group adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Accounting Standards Codification (“ASC”) 842) which requires lessees to recognize lease assets and liabilities on the balance sheet for both operating and financing leases, with the exception of leases with an original term of 12 months or less. Under previous guidance, recognition of lease assets and liabilities was not required for operating leases. The new guidance requires that lease assets and liabilities to be recognized and measured initially based on the present value of the lease payments. Sirius Group adopted the new guidance using the simplified transition option that allows companies to apply the new lease standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption.  Sirius Group also made the following elections:

· Sirius Group elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases upon transition.

· Sirius Group did not elect the hindsight practical expedient upon transition, for all leases.

· Sirius Group elected the short-term lease measurement and recognition exemption, resulting in lease payments being recorded as an expense on a straight-line basis over the lease term.

· Sirius Group elected to include both lease and non-lease components as a single component for all leases.

· Sirius Group did not elect the land easement practical expedient as it was not applicable.

As a result of the adoption of the new guidance, Sirius Group recognized a lease liability of $36.8 million, which represents the present value of our remaining lease payments and a right-of-use asset of $34.4 million as of January 1, 2019. The adoption of this guidance did not materially impact our results of operations or cash flows. Due to the adoption of the standard using the retrospective cumulative-effect adjustment method, there are no changes to our previously reported results prior to January 1, 2019. Lease expense is not expected to change materially as a result of the adoption of the new guidance. (See Note 18.)

Premium amortization on callable debt securities

Effective January 1, 2019, Sirius Group adopted ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities (ASC 310-20), which changes the amortization period for certain purchased callable debt securities. Under the new guidance, for investments in callable debt securities held at a premium, the premium will be amortized over the period to the earliest call date. The new guidance does not change the amortization period for callable debt securities held at a discount.  The adoption of this guidance did not have significant effect on our financial statements.

Recent accounting pronouncements

Recent accounting pronouncements

Credit losses

In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (ASC 326), which establishes new guidance for the recognition of credit losses for financial assets measured at amortized cost. The new guidance, which applies to financial assets that have the contractual right to receive cash, including reinsurance receivables and recoverables, requires reporting entities to estimate the credit losses expected over the life of a credit exposure using historical information, current information and reasonable and supportable forecasts that affect the collectability of the financial asset. The new guidance is effective for annual and interim periods beginning after December 15, 2019. Sirius Group is evaluating the expected impact of this new guidance.

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Segment information (Tables)

3 Months Ended

Mar. 31, 2019

Segment information

Summary of segment results

The following tables summarize the segment results for the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31, 2019
	Global			Global			Specialty &			Runoff &		Corporate
(Millions)	Property			A&H			Casualty			Other		Elimination		Total
Gross written premiums	$	330.7		$	169.3		$	120.9		$	1.4	$	—	$	622.3
Net written premiums	$	241.3		$	134.9		$	108.2		$	0.4	$	—	$	484.8
Net earned insurance and reinsurance premiums	$	139.7		$	96.1		$	75.7		$	0.4	$	—	$	311.9
Loss and allocated LAE(1)		(62.6)			(63.2)			(47.6)			(1.1)		—		(174.5)
Insurance and reinsurance acquisition expenses		(25.8)			(26.6)			(20.5)			(0.7)		10.3		(63.3)
Technical profit (loss)		51.3			6.3			7.6			(1.4)		10.3		74.1
Unallocated LAE(2)		(2.1)			(1.5)			(1.9)			(0.5)		(3.4)		(9.4)
Other underwriting expenses		(16.2)			(6.1)			(8.2)			(2.1)		(2.7)		(35.3)
Underwriting (loss) income		33.0			(1.3)			(2.5)			(4.0)		4.2		29.4
Service fee revenue(3)		—			36.3			—			—		(11.0)		25.3
Managing general underwriter unallocated LAE(4)		—			(4.1)			—			—		4.1		—
Managing general underwriter other underwriting expenses(5)		—			(2.7)			—			—		2.7		—
General and administrative expenses, MGU + Runoff & Other(6)		—			(16.2)			—			(0.8)		—		(17.0)
Underwriting  (loss) income, including net service fee income		33.0			12.0			(2.5)			(4.8)		—		37.7
Net investment income															20.1
Net realized investment gains (losses)															9.0
Net unrealized investment gains															74.0
Net foreign exchange gains (losses)															5.1
Other revenue(7)															(5.7)
General and administrative expenses(8)															(7.4)
Intangible asset amortization expenses															(3.9)
Interest expense on debt															(7.6)
Pre-tax income														$	121.3
Underwriting Ratios
Loss ratio		46.3	%		67.3	%		65.4	%		NM		NM		59.0	%
Acquisition expense ratio		18.5	%		27.7	%		27.1	%		NM		NM		20.3	%
Other underwriting expense ratio		11.6	%		6.3	%		10.8	%		NM		NM		11.3	%
Combined ratio (9)		76.4	%		101.3	%		103.3	%		NM		NM		90.6	%
Goodwill and intangible assets(10)	$	—		$	584.2		$	—		$	8.1	$	—	$	592.3

⁽¹⁾ Loss and allocated loss adjustment expenses (“LAE”) are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽²⁾ Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽³⁾ Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁴⁾ Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other.

⁽⁵⁾ Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process.

⁽⁶⁾ General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁷⁾ Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁸⁾ General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁹⁾ Ratios considered not meaningful (“NM”) to Runoff & Other and Corporate Elimination.

⁽¹⁰⁾ Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets.

	For the three months ended March 31, 2018
	Global			Global			Specialty &			Runoff &		Corporate
(Millions)	Property			A&H			Casualty			Other		Elimination		Total
Gross written premiums	$	346.6		$	145.6		$	115.5		$	7.5	$	—	$	615.2
Net written premiums	$	247.2		$	115.5		$	100.6		$	6.1	$	—	$	469.4
Net earned insurance and reinsurance premiums	$	136.1		$	88.0		$	54.4		$	6.0	$	—	$	284.5
Loss and allocated LAE(1)		(70.4)			(45.8)			(21.6)			2.4		—		(135.4)
Insurance and reinsurance acquisition expenses		(29.3)			(29.2)			(14.1)			(0.7)		10.3		(63.0)
Technical profit		36.4			13.0			18.7			7.7		10.3		86.1
Unallocated LAE(2)		(1.9)			(1.6)			(1.2)			(0.9)		—		(5.6)
Other underwriting expenses		(17.4)			(8.0)			(8.0)			(1.4)		(8.4)		(43.2)
Underwriting income		17.1			3.4			9.5			5.4		1.9		37.3
Service fee revenue(3)		—			32.8			—			—		(10.3)		22.5
Managing general underwriter unallocated LAE(4)		—			—			—			—		—		—
Managing general underwriter other underwriting expenses(5)		—			(8.4)			—			—		8.4		—
General and administrative expenses, MGU + Runoff & Other(6)		—			(9.5)			—			(1.1)		—		(10.6)
Underwriting income (loss), including net service fee income		17.1			18.3			9.5			4.3		—		49.2
Net investment income															10.8
Net realized investment gains (losses)															(3.7)
Net unrealized investment gains															16.0
Net foreign exchange gains  (losses)															(3.5)
Other revenue(7)															0.9
General and administrative expenses(8)															(3.7)
Intangible asset amortization expenses															(3.9)
Interest expense on debt															(7.7)
Pre-tax income														$	54.4
Underwriting Ratios
Loss ratio		53.1	%		53.9	%		41.9	%		NM		NM		49.6	%
Acquisition expense ratio		21.5	%		33.2	%		25.9	%		NM		NM		22.1	%
Other underwriting expense ratio		12.8	%		9.1	%		14.7	%		NM		NM		15.2	%
Combined ratio (9)		87.4	%		96.2	%		82.5	%		NM		NM		86.9	%
Goodwill and intangible assets(10)	$	—		$	608.6		$	—		$	5.0	$	—	$	613.6

⁽¹⁾ Loss and allocated loss adjustment expenses (“LAE”) are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽²⁾ Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income).

⁽³⁾ Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁴⁾ Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other.

⁽⁵⁾ Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process.

⁽⁶⁾ General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁷⁾ Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income).

⁽⁸⁾ General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income).

⁽⁹⁾ Ratios considered not meaningful (“NM”) to Runoff & Other and Corporate Elimination.

⁽¹⁰⁾ Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets.

Summary information regarding net premiums written by client location and underwriting location by reportable segment

The following tables provide summary information regarding net premiums written by client location and underwriting location by reportable segment for the three months ended March 31, 2019 and 2018:

	For the Three Months Ended March 31, 2019
	Global		Global		Specialty &		Runoff &
(Millions)	Property		A&H		Casualty		Other		Total
Net written premiums by client location:
United States	$	61.9	$	111.1	$	68.4	$	0.2	$	241.6
Europe		124.8		8.0		24.8		0.1		157.7
Canada, the Caribbean, Bermuda and Latin America		24.5		5.0		4.4		-		33.9
Asia and Other		30.1		10.8		10.6		0.1		51.6
Total net written premium by client location	$	241.3	$	134.9	$	108.2	$	0.4	$	484.8
Net written premiums by underwriting location:
United States	$	8.0	$	40.3	$	12.4	$	0.2	$	60.9
Europe		154.6		63.6		54.6		0.1		272.9
Canada, the Caribbean, Bermuda and Latin America		62.4		30.7		40.2		—		133.3
Asia and Other		16.3		0.3		1.0		0.1		17.7
Total written premiums by underwriting location	$	241.3	$	134.9	$	108.2	$	0.4	$	484.8

	For the three months ended March 31, 2018
	Global		Global		Specialty &		Runoff &
(Millions)	Property		A&H		Casualty		Other		Total
Net written premiums by client location:
United States	$	87.0	$	87.5	$	37.3	$	6.1	$	217.9
Europe		106.3		11.6		50.3		—		168.2
Canada, the Caribbean, Bermuda and Latin America		23.2		4.8		2.6		—		30.6
Asia and Other		30.7		11.6		10.4		—		52.7
Total net written premium by client location	$	247.2	$	115.5	$	100.6	$	6.1	$	469.4
Net written premiums by underwriting location:
United States	$	5.3	$	21.0	$	(0.1)	$	6.1	$	32.3
Europe		136.5		68.6		72.0		—		277.1
Canada, the Caribbean, Bermuda and Latin America		89.8		25.7		27.5		—		143.0
Asia and Other		15.6		0.2		1.2		—		17.0
Total written premiums by underwriting location	$	247.2	$	115.5	$	100.6	$	6.1	$	469.4

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Reserves for unpaid losses and loss adjustment expenses (Tables)

3 Months Ended

Mar. 31, 2019

Reserves for unpaid losses and loss adjustment expenses

Summary of the loss and LAE reserve activities

	Three Months Ended
	March 31,
(Millions)	2019		2018
Gross beginning balance	$	2,016.7	$	1,898.5
Less beginning reinsurance recoverable on unpaid losses		(350.2)		(319.7)
Net loss and LAE reserve balance		1,666.5		1,578.8
Losses and LAE incurred relating to:
Current year losses		167.3		143.5
Prior years losses		16.6		(2.5)
Total net incurred losses and LAE		183.9		141.0
Foreign currency translation adjustment to net loss and LAE reserves		(3.4)		6.7
Loss and LAE paid relating to:
Current year losses		36.2		31.3
Prior years losses		183.8		147.1
Total loss and LAE payments		220.0		178.4
Net ending balance		1,627.0		1,548.1
Plus ending reinsurance recoverable on unpaid losses		349.3		327.8
Gross ending balance	$	1,976.3	$	1,875.9

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Investment securities (Tables)

3 Months Ended

Mar. 31, 2019

Marketable securities

Schedule of net investment income

	For the three months ended
	March 31,
(Millions)	2019		2018
Fixed maturity investments	$	16.8	$	9.9
Short-term investments		0.4		0.8
Equity securities		2.7		1.2
Other long-term investments		3.9		1.2
Total investment income		23.8		13.1
Investment expenses		(3.7)		(2.3)
Net investment income	$	20.1	$	10.8

Schedule of net realized and unrealized investment (losses) gains

	For the three months ended March 31,
(Millions)	2019		2018
Gross realized gains	$	14.1	$	8.4
Gross realized (losses)		(5.1)		(12.1)
Net realized gains (losses) on investments(1)		9.0		(3.7)
Net unrealized gains on investments(2)		74.0		16.0
Net realized and unrealized investment gains on investments	$	83.0	$	12.3

⁽¹⁾ Includes $10.9 and $(1.1) of realized gains (losses) due to foreign currency during 2019 and 2018, respectively.

⁽²⁾ Includes $25.0 and $18.9 ofunrealized gains due to foreign currency during 2019 and 2018, respectively.

Schedule of net realized investment gains (losses)

	For the three months ended March 31,
(Millions)	2019		2018
Fixed maturity investments	$	6.8	$	(2.8)
Short-term investments		0.1		—
Equity securities		(0.6)		(1.5)
Other long-term investments		3.3		0.6
Derivative instruments(1)		(0.6)		—
Net realized investment gains (losses)	$	9.0	$	(3.7)

(1) See Note 11.

Schedule of net unrealized investment gains (losses)

	For the three months ended March 31,
(Millions)	2019		2018
Fixed maturity investments	$	29.7	$	3.0
Short-term investments		2.7		—
Equity securities		25.1		6.4
Other long-term investments		17.1		6.6
Derivative instruments(1)		(0.6)		—
Net unrealized investment gains	$	74.0	$	16.0

(1) See Note 11.

Level 3

Marketable securities

Schedule of net unrealized investment gains (losses)

	For the three months ended
	March 31,
(Millions)	2019		2018
Other long-term investments	$	8.8	$	0.4
Total unrealized investment gains - Level 3 investments	$	8.8	$	0.4

Hedge funds and private equity funds

Marketable securities

Schedule of redemption frequency and advance notice period requirements for investments

The following summarizes the March 31, 2019 fair value of hedge funds subject to restrictions on redemption frequency and advance notice period requirements for investments in active hedge funds:

	Notice Period
Redemption Frequency	30-59 days		60-89 days		90-119 days		120+ days
(Millions)	notice		notice		notice		notice		Total
Monthly	$	—	$	32.7	$	—	$	—	$	32.7
Quarterly		0.8		—		—		—		0.8
Semi-annual		—		0.8		—		—		0.8
Annual		—		16.9		51.6		20.3		88.8
Total	$	0.8	$	50.4	$	51.6	$	20.3	$	123.1

Private equity securities

Marketable securities

Schedule of investment securities by lock-up period.

As of March 31, 2019, investments in private equity funds were subject to lock-up periods as follows:

(Millions)	1 - 3 years		3 – 5 years		5 – 10 years		Total
Private Equity Funds – expected lock-up period remaining	$	12.6	$	4.3	$	161.7	$	178.6

Fixed maturity investments

Marketable securities

Schedule of investment securities and other long-term investments

	March 31, 2019
							Net foreign
	Cost or		Gross		Gross		currency
	amortized		unrealized		unrealized		gains		Fair
(Millions)	cost		gains		losses		(losses)		value
Corporate debt securities	$	614.6	$	3.0	$	(2.7)	$	13.2	$	628.1
Asset-backed securities		476.7		0.3		(3.9)		3.8		476.9
Residential mortgage-backed securities		415.1		5.2		(3.9)		9.4		425.8
U.S. government and government agency		151.9		0.3		(0.2)		6.4		158.4
Commercial mortgage-backed securities		113.6		0.4		(1.6)		1.2		113.6
Non-U.S. government and government agency		37.8		—		(0.1)		0.8		38.5
Preferred stocks		2.5		0.1		—		(0.1)		2.5
U.S. States, municipalities and political subdivision		2.6		—		—		—		2.6
Total fixed maturity investments	$	1,814.8	$	9.3	$	(12.4)	$	34.7	$	1,846.4

	December 31, 2018
							Net foreign
	Cost or		Gross		Gross		currency
	amortized		unrealized		unrealized		gains		Fair
(Millions)	cost		gains		losses		(losses)		value
Corporate debt securities	$	694.1	$	1.4	$	(7.3)	$	7.6	$	695.8
Asset-backed securities		496.3		0.1		(3.8)		1.9		494.5
Residential mortgage-backed securities		413.0		1.7		(7.1)		5.9		413.5
U.S. government and government agency		163.9		0.3		(0.5)		4.2		167.9
Commercial mortgage-backed securities		117.7		0.2		(2.7)		0.7		115.9
Non-U.S. government and government agency		50.6		—		(0.2)		(0.1)		50.3
Preferred stocks		14.5		0.6		(6.8)		0.2		8.5
U.S. States, municipalities and political subdivision		2.8		—		—		—		2.8
Total fixed maturity investments	$	1,952.9	$	4.3	$	(28.4)	$	20.4	$	1,949.2

Schedule of fixed maturity investment by contractual maturity

	March 31, 2019				December 31, 2018
	Cost or		Fair		Cost or		Fair
(Millions)	amortized cost		value		amortized cost		value
Due in one year or less	$	241.7	$	250.0	$	249.6	$	254.6
Due after one year through five years		554.3		566.8		635.6		636.4
Due after five years through ten years		10.9		10.8		26.2		25.7
Due after ten years		—		—		0.1		0.1
Mortgage-backed and asset-backed securities		1,005.4		1,016.3		1,026.9		1,023.9
Preferred stocks		2.5		2.5		14.5		8.5
Total	$	1,814.8	$	1,846.4	$	1,952.9	$	1,949.2

Schedule of ratings and fair value of fixed maturity investments

(Millions)	March 31, 2019		December 31, 2018
AAA	$	575.6	$	602.0
AA		799.8		818.0
A		254.2		290.5
BBB		154.4		167.4
Other		62.4		71.3
Total fixed maturity investments(1)	$	1,846.4	$	1,949.2

⁽¹⁾ Credit ratings are assigned based on the following hierarchy: 1) Standard & Poor's (“S&P”) and 2) Moody's Investors Service (“Moody’s”).

Other long-term investments

Marketable securities

Schedule of investment securities and other long-term investments

(Millions)	March 31, 2019		December 31, 2018
Hedge funds and private equity funds	$	301.7	$	301.4
Limited liability companies and private equity securities		88.0		63.6
Total other long-term investments	$	389.7	$	365.0

Other long-term investments | Hedge funds and private equity funds

Marketable securities

Summary of investment securities by investment objective and sector

	March 31, 2019				December 31, 2018
			Unfunded				Unfunded
(Millions)	Fair Value		Commitments		Fair Value		Commitments
Hedge funds:
Long/short multi-sector	$	49.5	$	—	$	41.0	$	—
Distressed mortgage credit		50.8		—		54.8		—
Private Credit		20.3		—		20.0		—
Other		2.5		—		2.5		—
Total hedge funds		123.1		—		118.3		—
Private equity funds:
Energy infrastructure & services		87.5		30.7		93.7		54.2
Multi-sector		9.2		0.7		9.0		0.7
Healthcare		31.7		15.6		31.7		15.6
Life settlement		23.9		—		23.7		—
Manufacturing/Industrial		23.6		3.1		23.6		10.4
Private equity secondaries		1.1		1.1		1.1		1.1
Real estate		0.3		—		0.3		—
Other		1.3		2.0		—		—
Total private equity funds		178.6		53.2		183.1		82.0
Total hedge and private equity funds included in other long-term investments	$	301.7	$	53.2	$	301.4	$	82.0

Equity securities and Other long-term investments

Marketable securities

Schedule of investment securities and other long-term investments

	March 31, 2019
	Cost or		Gross		Gross		Net foreign
	amortized		unrealized		unrealized		currency		Fair
(Millions)	cost		gains		losses		gains		value
Equity securities	$	398.4	$	26.2	$	(38.7)	$	8.5	$	394.4
Other long-term investments	$	351.7	$	48.3	$	(20.5)	$	10.2	$	389.7

	December 31, 2018
	Cost or		Gross		Gross		Net foreign
	amortized		unrealized		unrealized		currency		Fair
(Millions)	cost		gains		losses		gains		value
Equity securities	$	409.4	$	17.8	$	(50.8)	$	3.6	$	380.0
Other long-term investments	$	337.6	$	32.6	$	(13.5)	$	8.3	$	365.0

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Fair value measurements (Tables)

3 Months Ended

Mar. 31, 2019

Fair value measurements

Summary of financial assets and liabilities measured at fair value

	March 31, 2019
	Fair		Level 1		Level 2		Level 3
(Millions)	Value		Inputs		Inputs		Inputs
Assets measured at fair value
Fixed maturity investments:
U.S. Government and government agency	$	158.4	$	157.0	$	1.4	$	—
Corporate debt securities		628.1		—		628.1		—
Residential mortgage-backed securities		425.8		—		425.8		—
Asset-backed securities		476.9		—		476.9		—
Commercial mortgage-backed securities		113.6		—		113.6		—
Non-U.S. government and government agency		38.5		33.9		4.6		—
Preferred stocks		2.5		—		2.5		—
U.S. States, municipalities, and political subdivision		2.6		—		2.6		—
Total fixed maturity investments		1,846.4		190.9		1,655.5		—
Short-term investments		833.6		792.5		41.1		—
Equity securities		394.4		393.5		0.9		—
Other long-term investments(1)		88.0		—		—		88.0
Total investments	$	3,162.4	$	1,376.9	$	1,697.5	$	88.0
Derivative instruments		0.8		0.5		—		0.3
Total assets measured at fair value	$	3,163.2	$	1,377.4	$	1,697.5	$	88.3
Liabilities measured at fair value
Contingent consideration liabilities	$	28.8	$	—	$	—	$	28.8
Derivative instruments		5.3		0.2		—		5.1
Total liabilities measured at fair value	$	34.1	$	0.2	$	—	$	33.9

⁽¹⁾ Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient.

	December 31, 2018
	Fair		Level 1		Level 2		Level 3
(Millions)	Value		inputs		inputs		inputs
Assets measured at fair value
Fixed maturity investments:
U.S. Government and government agency	$	167.9	$	164.7	$	3.2	$	—
Corporate debt securities		695.8		—		695.8		—
Asset-backed securities		494.5		—		494.5		—
Residential mortgage-backed securities		413.5		—		413.5		—
Commercial mortgage-backed securities		115.9		—		115.9		—
Non-U.S. government and government agency		50.3		42.9		7.4		—
Preferred stocks		8.5		—		3.1		5.4
U.S. States, municipalities, and political subdivision		2.8		—		2.8		—
Total fixed maturity investments		1,949.2		207.6		1,736.2		5.4
Short-term investments		715.5		679.3		36.2		—
Equity securities		380.0		380.0		—		—
Other long-term investments(1)		63.6		—		—		63.6
Total investments	$	3,108.3	$	1,266.9	$	1,772.4	$	69.0
Derivative instruments		4.1		—		—		4.1
Total assets measured at fair value	$	3,112.4	$	1,266.9	$	1,772.4	$	73.1
Liabilities measured at fair value
Contingent consideration liabilities	$	28.8	$	—	$	—	$	28.8
Derivative instruments		5.1		0.5		—		4.6
Total liabilities measured at fair value	$	33.9	$	0.5	$	—	$	33.4

⁽¹⁾ Excludes fair value of $301.4 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient.

Rollforward of Level 3 fair value measurements

The following tables present changes in Level 3 for financial instruments measured at fair value for the three months ended March 31, 2019 and 2018:

		For the Three Months Ended March 31, 2019
					Derivative
			Other		instruments		Contingent
	Fixed		long-term		assets &		consideration
(Millions)	Maturities		investments(1)		(liabilities)		(liabilities)
Balance at January 1, 2018	$	5.4	$	63.6	$	(0.5)	$	(28.8)
Total realized and unrealized gains		—		9.3		(5.1)		—
Foreign currency losses through Other Comprehensive Income		—		(0.7)		—		—
Purchases		—		15.8		—		—
Sales/Settlements		(5.4)		—		0.8		—
Balance at March 31, 2019	$	—	$	88.0	$	(4.8)	$	(28.8)

⁽¹⁾ Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient.

	For the Three Months Ended March 31, 2018
					Derivative
			Other		instruments		Contingent
	Fixed		long-term		assets &		consideration
(Millions)	Maturities		investments(1)		(liabilities)		(liabilities)
Balance at January 1, 2018	$	8.0	$	64.2	$	(6.1)	$	(42.8)
Total realized and unrealized gains		—		0.8		—		—
Foreign currency losses through Other Comprehensive Income		—		(0.3)		—		—
Purchases		0.6		0.4		—		—
Sales/Settlements		—		(0.2)		—		—
Balance at March 31, 2018	$	8.6	$	64.9	$	(6.1)	$	(42.8)

⁽¹⁾ Excludes fair value of $221.9 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient.

Schedule of significant unobservable inputs used for recurring fair value measurements for Level 3 instruments

(Millions, except share prices)	March 31, 2019
Description	Valuation Technique(s)	Fair Value		Unobservable Input
Private equity securities(1)	Share price of recent transaction	$	32.5	Purchase share price	$	40.63
Preferred stock(1)	Share price of recent transaction	$	17.5	Purchase price	$	7.74
Private equity securities(1)	Multiple of GAAP book value	$	16.8	Book value multiple		1.0X
Private debt instrument(1)	Purchase price of recent transaction	$	7.8	Purchase price	$	9.0
Private debt instrument(1)	Purchase price of recent transaction	$	6.0	Purchase price	$	6.0
Private equity securities(1)	Share price of recent transaction	$	5.1	Purchase price	$	7.74
Private equity securities(1)	Purchase price of recent transaction	$	1.0	Purchase price	$	10.0
Private equity securities(1)	Purchase price of recent transaction	$	0.8	Purchase price	$	0.8
Private equity securities(1)	Purchase price of recent transaction	$	0.3	Purchase price	$	0.3
Private debt instrument (1)	Purchase price of recent transaction	$	0.2	Purchase price	$	0.2
Currency forwards(2)	Third party appraisal	$	0.2	Broker quote	$	0.2
Interest rate cap(2)	Third party appraisal	$	0.1	Broker quote	$	0.1
Weather derivatives(2)	Third party appraisal	$	(1.3)	Broker quote	$	(1.3)
Currency swaps (2)	Third party appraisal	$	(3.8)	Broker quote	$	(3.8)
Contingent consideration	External valuation model	$	(28.8)	Discounted future payments	$	(28.8)

⁽¹⁾ As of March 31, 2019, each asset type consists of one security.

⁽²⁾ See Note 11 for discussion of derivative instruments.

(Millions)	December 31, 2018
Description	Valuation technique(s)	Fair value		Unobservable input
Private equity securities (1)	Share price of recent transaction	$	32.5	Purchase share price	$	40.63
Private equity securities (1)	Multiple of GAAP book value	$	14.7	Book value multiple		0.9X
Private debt instrument (1)	Purchase price of recent transaction	$	9.0	Purchase price	$	9.0
Private debt instrument (1)	Purchase price of recent transaction	$	6.0	Purchase price	$	6.0
Preferred stock (1)	Share price of recent transaction	$	4.6	Purchase price	$	1.88
Weather derivatives (2)	Third party appraisal	$	3.9	Broker quote	$	3.9
Private equity securities(1)	Purchase price of recent transaction	$	0.9	Purchase price	$	1.88
Preferred stock (1)	Share price of recent transaction	$	0.8	Purchase price	$	0.8
Private equity securities(1)	Share price of recent transaction	$	0.3	Purchase price	$	10.0
Private debt instrument (1)	Purchase price of recent transaction	$	0.2	Purchase price	$	0.2
Interest rate cap (2)	Third party appraisal	$	0.2	Broker quote	$	0.2
Currency swaps (2)	Third party appraisal	$	(4.6)	Broker quote	$	(4.6)
Contingent consideration	External valuation model	$	(28.8)	Discounted future payments	$	(28.8)

⁽¹⁾ As of December 31, 2018, each asset type consists of one security.

⁽²⁾ See Note 11 for discussion of derivative instruments.

Schedule of financial instruments disclosed, but not carried at fair value

	March 31, 2019				December 31, 2018
(Millions)	Fair Value(1)		Carrying Value		Fair Value(1)		Carrying Value
Liabilities, Mezzanine equity, and Non-controlling interest:
2017 SEK Subordinated Notes	$	297.0	$	292.7	$	309.5	$	303.6
2016 SIG Senior Notes	$	361.7	$	393.4	$	347.6	$	393.2
Series B preference shares	$	200.2	$	240.6	$	191.7	$	232.2

⁽¹⁾ Fair value estimated by internal pricing and considered a Level 3 measurement.

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Debt and standby letters of credit facilities (Tables)

3 Months Ended

Mar. 31, 2019

Debt and standby letters of credit facilities

Schedule of debt outstanding

	March 31,		Effective		December 31,		Effective
(Millions)	2019		Rate (1)		2018		Rate (1)
2017 SEK Subordinated Notes, at face value	$	296.6	3.7	%	$	307.6	3.8	%
Unamortized issuance costs		(3.9)				(4.0)
2017 SEK Subordinated Notes, carrying value		292.7				303.6
2016 SIG Senior Notes, at face value		400.0	4.7	%		400.0	4.7	%
Unamortized discount		(2.5)				(2.6)
Unamortized issuance costs		(4.1)				(4.2)
2016 SIG Senior Notes, carrying value		393.4				393.2
Total debt	$	686.1			$	696.8

⁽¹⁾ Effective rate considers the effect of the debt issuance costs.

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Derivatives (Tables)

3 Months Ended

Mar. 31, 2019

Derivatives

Schedule of Interest Rate Cap collateral balances held

	March 31, 2019
		Collateral Balances	S & P
(Millions)	Held		Rating(1)
Barclays Bank Plc	$	0.1	A
Nordea Bank Abp		0.1	AA-
Total	$	0.2

⁽¹⁾ Standard & Poor's ratings as detailed above are: "AA-" (Very Strong, which is the fourth highest of twenty-three creditworthiness ratings) and "A" (Strong, which is the sixth highest of twenty-three credit worthiness ratings).

Schedule of classification and amount of fair value of derivatives not designated as hedging instruments within Consolidated Balance Sheets

(Millions)	March 31, 2019						December 31, 2018
			Asset		Liability				Asset		Liability
			derivative		derivative				derivative		derivative
	Notional		at fair		at fair		Notional		at fair		at fair
Derivatives not designated as hedging instruments	Value		value(1)		value(2)		Value		value(1)		value(2)
Interest rate cap	$	250.0	$	0.1	$	—	$	250.0	$	0.2	$	—
Foreign currency swaps	$	90.0	$	—	$	3.8	$	45.0	$	—	$	4.6
Foreign currency forwards	$	15.0	$	0.2	$	—	$	—	$	—	$	—
Weather derivatives	$	121.6	$	—	$	1.3	$	150.5	$	3.9	$	—
Equity futures contracts	$	(17.0)	$	—	$	0.2	$	—	$	—	$	—
Equity put options	$	10.9	$	0.5	$	—	$	6.2	$	—	$	0.5

⁽¹⁾ Asset derivatives are classified within Other assets within the Company’s Consolidated Balance Sheets at March 31, 2019 and December 31, 2018.

⁽²⁾ Liability derivatives are classified within Other liabilities within the Company’s Consolidated Balance Sheets at March 31, 2019 and December 31, 2018.

Schedule of classification and net impact on earnings, recognized in Consolidated Statements of (Loss) Income relating to derivatives

		For the three months ended
(Millions)		March 31,
Derivatives not designated as	Classification of gains
hedging instruments	(losses) recognized
	in earnings	2019		2018
Interest rate cap	Other revenues	$	(0.1)	$	0.3
Foreign currency swaps	Net foreign exchange gains (losses)	$	0.8	$	1.3
Foreign currency forwards	Net foreign exchange gains (losses)	$	0.2	$	—
Weather derivatives	Other revenues	$	(6.0)	$	1.0
Equity futures contracts	Net realized investment gains (losses)	$	(0.6)	$	—
Equity futures contracts	Net unrealized investment gains	$	(0.2)	$	—
Equity put options	Net unrealized investment gains	$	(0.4)	$	—

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Common shareholder's equity, mezzanine equity, and non-controlling interests (Tables)

3 Months Ended

Mar. 31, 2019

Common shareholder's equity, mezzanine equity, and non-controlling interests

Schedule of changes in the company's issued and outstanding common shares

	Three Months Ended
	March 31,
(Millions)	2019	2018
Common shares:
Shares issued and outstanding, beginning of period	115,151,251	120,000,000
Issuance of shares to directors and employees	111,052	—
Shares issued and outstanding, end of period	115,262,303	120,000,000

Schedule of change in non-controlling interest

(Millions)	Total
Non-controlling interests as of December 31, 2018	$	1.7
Net income attributable to non-controlling interests		0.4
Other, net		0.1
Non-controlling interests as of March 31, 2019	$	2.2

(Millions)	Total
Non-controlling interests as of December 31, 2017	$	0.2
Net income attributable to non-controlling interests		0.2
Other, net		0.1
Non-controlling interests as of March 31, 2018	$	0.5

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Earnings per share (Tables)

3 Months Ended

Mar. 31, 2019

Earnings per share

Schedule of computation of basic and diluted earnings per common share

	For the three months ended
	March 31,
(Millions, except share and per share information)	2019		2018
Basic earnings per share
Numerator:
Net income	$	104.1	$	43.3
Less: Income attributable to non-controlling interests		(0.4)		(0.2)
Less: Change in carrying value of Series B preference shares		(8.4)		—
Less: Accrued dividends on Series A redeemable preference shares		—		(2.6)
Net income available for dividends out of undistributed earnings	$	95.3	$	40.5
Less: Earnings attributable to Series B preference shares		(8.9)		—
Less: Earnings attributable to Series A redeemable preference shares		—		(1.7)
Net income available to Sirius Group common shareholders	$	86.4	$	38.8
Denominator:
Weighted average shares outstanding for basic earnings per share		115,182,331		120,000,000
Basic earnings per share	$	0.75	$	0.32
Diluted earnings per share
Numerator:
Net income available to Sirius Group common shareholders	$	86.4	$	38.8
Add: Change in carrying value of Series B preference shares		8.4		—
Net income available to Sirius Group common shareholders on a diluted basis	$	94.8	$	38.8
Denominator:
Weighted average shares outstanding for basic earnings per share		115,182,331		120,000,000
Add: Series B preference shares		11,901,670		—
Add: Unvested performance share units and restricted share units		251,313		—
Weighted average shares outstanding for diluted earnings per share(1)		127,335,314		120,000,000
Diluted earnings per share	$	0.74	$	0.32

⁽¹⁾ As at March 31, 2019, there were a total of 19,510,830 of potentially dilutive securities excluded from the calculation of Diluted earnings per share. As at March 31, 2018, there were no potentially dilutive securities excluded from the calculation of Diluted earnings per share.

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Investments in unconsolidated entities (Tables)

3 Months Ended

Mar. 31, 2019

Investments in unconsolidated entities

Schedule of components of Other long-term investments

(Millions)	March 31, 2019		December 31, 2018
Equity method eligible unconsolidated entities, at fair value	$	167.5	$	169.4
Other unconsolidated investments, at fair value(1)		222.2		195.6
Total Other long-term investments(2)	$	389.7	$	365.0

⁽¹⁾ Includes Other long-term investments that are not equity method eligible.

⁽²⁾ There were no investments accounted for using the equity method as of March 31, 2019 and December 31, 2018.

Schedule of investments in equity method eligible unconsolidated entities

	Ownership interest at
	March 31,		December 31,
Investee	2019		2018		Instrument Held
BE Reinsurance Limited	25.0	%	25.0	%	Common shares
BioVentures Investors (Offshore) IV LP	73.0	%	73.0	%	Units
Camden Partners Strategic Fund V (Cayman), LP	39.4	%	36.4	%	Units
NEC Cypress Buyer LLC	23.5	%	13.3	%	Units
New Energy Capital Infrastructure Credit Fund LP(1)	18.3	%	22.9	%	Units
New Energy Capital Infrastructure Offshore Credit Fund LP(1)	12.2	%	54.9	%	Units
Scion G7, LP	28.3	%	28.8	%	Units
Tuckerman Capital V LP	48.3	%	47.6	%	Units
Tuckerman Capital V Co-Investment I LP	49.5	%	47.7	%	Units

⁽¹⁾ The ownership percentage of New Energy Capital Infrastructure Credit Fund LP and New Energy Capital Infrastructure Offshore Credit Fund LP was greater than 20% at December 31, 2018 but was less than 20% at March 31, 2019 and is included in the table for comparative purposes.

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Variable interest entities (Tables)

3 Months Ended

Mar. 31, 2019

Variable interest entities

Schedule of assets and liabilities related to the consolidated VIEs

(Millions)	March 31, 2019		December 31, 2018
Assets:
Fixed maturity investments, trading at fair value	$	3.9	$	4.0
Short-term investments, at fair value		0.4		0.3
Cash		0.2		0.2
Total investments		4.5		4.5
Insurance and reinsurance premiums receivable		1.5		0.1
Funds held by ceding companies		4.7		3.7
Deferred acquisition costs		0.5		5.2
Other assets		0.1		0.9
Total assets	$	11.3	$	14.4
Liabilities
Loss and loss adjustment expense reserves	$	3.0	$	4.6
Unearned insurance and reinsurance premiums		1.7		3.7
Other liabilities		0.1		—
Total liabilities	$	4.8	$	8.3

Schedule of total assets of unconsolidated VIEs

			Maximum Exposure to Loss
	Total VIE		On-Balance		Off-Balance
(Millions)	Assets		Sheet		Sheet		Total
March 31, 2019
Other long-term investments(1)	$	220.6	$	118.5	$	25.3	$	143.8
Total at March 31, 2019	$	220.6	$	118.5	$	25.3	$	143.8
December 31, 2018
Other long-term investments(1)	$	209.1	$	103.1	$	32.0	$	135.1
Total at December 31, 2018	$	209.1	$	103.1	$	32.0	$	135.1

⁽¹⁾ Comprised primarily of hedge funds and private equity funds.

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Commitments and contingencies (Tables)

3 Months Ended

Mar. 31, 2019

Commitments and contingencies

Schedule of lease balances within the Consolidated Balance Sheets

(millions)	Balance Sheet Classification	March 31, 2019
Operating lease right-of-use assets	Other assets	$	32.0
Current lease liabilities	Other liabilities	$	9.8
Non-current lease liabilities	Other liabilities	$	24.1

Schedule of weighted average remaining lease term and weighted average discount rate

Weighted average lease term (years) as at March 31, 2019:
Leased offices	7.0 years
Leased equipment	3.0 years
Weighted average discount rate:
Leased offices	3.8	%
Leased equipment	3.4	%

Schedule of future annual minimum rental payments required under non cancellable leases for office space

(Millions)	Future Payments
2019	$	7.7
2020		8.9
2021		7.4
2022		6.6
2023		4.2
2024 and after		2.0
Total future annual minimum rental payments as at March 31, 2019		36.8
Less: present value discount		(2.9)
Total lease liability as at March 31, 2019	$	33.9

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Summary of significant accounting policies - Recent adopted changes in accouting principle and Recent accounting pronouncements (Details) - USD ($) $ in Millions	Jan. 01, 2019	Mar. 31, 2019	Dec. 31, 2018
Summary of significant accounting policies
Lease, Practical Expedients, Package [true false]	true
Lease, Practical Expedient, Use of Hindsight [true false]	false
Lease liability		$ 33.9
Right-of-use asset		$ 32.0
ASU 2016-02 | Restatement
Summary of significant accounting policies
Lease liability	$ 36.8
Right-of-use asset	$ 34.4
Cumulative effect of an accounting change			$ 0.0

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Significant transactions - Easterly Acquisition Corp. and WRM America Indemnity Company, Inc. (Details) $ / shares in Units, $ in Millions						3 Months Ended
	Nov. 16, 2018 USD ($)	Nov. 05, 2018 USD ($) $ / shares employee shares	Nov. 02, 2018 USD ($) $ / shares shares	Sep. 30, 2018 $ / shares	Aug. 16, 2018 USD ($)	Mar. 31, 2019 shares	Nov. 04, 2018 USD ($)
Significant transactions
Shares issued | shares						111,052
Preference Share Investors | Sirius Group Private Placement | Series B preference shares
Significant transactions
Share subscriptions (in shares) | shares		11,901,670
Merger Agreement
Significant transactions
Proceeds from merger, private placement and employee stock purchase plan		$ 268.0
Merger Agreement | Sirius Group Private Placement
Significant transactions
Number of Times of Diluted Book Value Per Share, Exchange Price of Share		1.05
Adjusted diluted book value per share | $ / shares		17.22447
Merger Agreement | ESPP
Significant transactions
Number of Times of Diluted Book Value Per Share, Exchange Price of Share		1.05
Minimum number of shares to be purchased | shares		100
Maximum number of shares to be purchased | shares		1,000
Number of employees that purchased shares | employee		405
Number of common shares purchased | shares		149,236
Share-based compensation expense		$ 2.6
Merger Agreement | CM Bermuda
Significant transactions
Adjustment to consideration payable	$ 1.6
Reported book value per share (in dollars per share) | $ / shares				$ 16.44
Merger related contractual costs	9.0
Merger related legal, advisory and other costs	$ 7.1
Subscription Agreement | Preference Share Investors | Sirius Group Private Placement
Significant transactions
Warrants Received | shares		5,418,434
Exercisable period of warrants		5 years
Strike price as a percentage of the per share purchase price		125.00%
Warrant strike price per share | $ / shares		$ 21.53
Cost value of warrants		$ 9.6
Stock issuance costs		2.0
Subscription Agreement | Preference Share Investors | Sirius Group Private Placement | Series B preference shares
Significant transactions
Gross proceeds		226.1
Value of share subscriptions		$ 195.8
Subscription Agreement | Preference Share Investors | Sirius Group Private Placement | Series B preference shares | Common shares
Significant transactions
Share subscriptions (in shares) | shares		1,225,954
Value of share subscriptions		$ 20.8
Redemption Agreement | CM Bermuda | Common shares
Significant transactions
Value of shares redeemed			$ 164.0
Stock redeemed (in shares) | shares			9,519,280
Share price (in dollars per share) | $ / shares			$ 17.22447
Redemption Agreement | IMGAH
Significant transactions
Redemption amount of preference shares		$ 95.0
For the first 100 shares | Merger Agreement | ESPP
Significant transactions
Purchase price of common shares as a percentage of its market value		85.00%
For the next 900 shares | Merger Agreement | ESPP
Significant transactions
Purchase price of common shares as a percentage of its market value		100.00%
Easterly | Merger Agreement
Significant transactions
Public shares held by Easterly's public stockholders in trust		$ 39.3					$ 149.0
Issuance of converted warrants | shares		6,088,535
Easterly | Merger Agreement | Common shares
Significant transactions
Number of Times of Diluted Book Value Per Share, Exchange Price of Share				1.05
Exchange ratio		0.609
Value of shares redeemed		$ 109.7
Shares issued | shares		2,280,241
WRM America Indemnity Company, Inc.
Significant transactions
Percentage of ownership interest acquired					100.00%
Consideration					$ 16.9
Acquisition of intangible assets					$ 3.1

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Segment information (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) segment product	Mar. 31, 2018 USD ($)
Segment information
Number of reportable segments | segment	4
Gross written premiums	$ 622.3	$ 615.2
Net written premiums	484.8	469.4
Net earned insurance and reinsurance premiums	311.9	284.5
Loss and allocated LAE	(174.5)	(135.4)
Insurance and reinsurance acquisition expenses	(63.3)	(63.0)
Technical profit (loss)	74.1	86.1
Unallocated LAE	(9.4)	(5.6)
Other underwriting expenses	(35.3)	(43.2)
Underwriting (loss) income	29.4	37.3
Service fee revenue	25.3	22.5
General and administrative expenses	24.4	14.3
Underwriting (loss) income, including net service fee income	37.7	49.2
Net investment income	20.1	10.8
Net realized investment gains (losses)	9.0	(3.7)
Net unrealized investment gains	74.0	16.0
Net foreign exchange gains (losses)	5.1	(3.5)
Other revenue	(5.7)	0.9
General and administrative expenses	(7.4)	(3.7)
Intangible asset amortization expenses	(3.9)	(3.9)
Interest expense on debt	(7.6)	(7.7)
Pre-tax income	$ 121.3	$ 54.4
Underwriting Ratios
Loss ratio	59.00%	49.60%
Acquisition expense ratio	20.30%	22.10%
Other underwriting expense ratio	11.30%	15.20%
Combined ratio	90.60%	86.90%
Goodwill and intangible assets	$ 592.3	$ 613.6
Managing general underwriters
Segment information
General and administrative expenses	17.0	10.6
Corporate Elimination
Segment information
Insurance and reinsurance acquisition expenses	10.3	10.3
Technical profit (loss)	10.3	10.3
Unallocated LAE	(3.4)
Other underwriting expenses	(2.7)	(8.4)
Underwriting (loss) income	4.2	1.9
Service fee revenue	(11.0)	(10.3)
Corporate Elimination | Managing general underwriters
Segment information
Unallocated LAE	4.1
Other underwriting expenses	2.7	8.4
Global Property | Reportable segments
Segment information
Gross written premiums	330.7	346.6
Net written premiums	241.3	247.2
Net earned insurance and reinsurance premiums	139.7	136.1
Loss and allocated LAE	(62.6)	(70.4)
Insurance and reinsurance acquisition expenses	(25.8)	(29.3)
Technical profit (loss)	51.3	36.4
Unallocated LAE	(2.1)	(1.9)
Other underwriting expenses	(16.2)	(17.4)
Underwriting (loss) income	33.0	17.1
Underwriting (loss) income, including net service fee income	$ 33.0	$ 17.1
Underwriting Ratios
Loss ratio	46.30%	53.10%
Acquisition expense ratio	18.50%	21.50%
Other underwriting expense ratio	11.60%	12.80%
Combined ratio	76.40%	87.40%
Global A&H | Reportable segments
Segment information
Gross written premiums	$ 169.3	$ 145.6
Net written premiums	134.9	115.5
Net earned insurance and reinsurance premiums	96.1	88.0
Loss and allocated LAE	(63.2)	(45.8)
Insurance and reinsurance acquisition expenses	(26.6)	(29.2)
Technical profit (loss)	6.3	13.0
Unallocated LAE	(1.5)	(1.6)
Other underwriting expenses	(6.1)	(8.0)
Underwriting (loss) income	(1.3)	3.4
Service fee revenue	36.3	32.8
Underwriting (loss) income, including net service fee income	$ 12.0	$ 18.3
Underwriting Ratios
Loss ratio	67.30%	53.90%
Acquisition expense ratio	27.70%	33.20%
Other underwriting expense ratio	6.30%	9.10%
Combined ratio	101.30%	96.20%
Goodwill and intangible assets	$ 584.2	$ 608.6
Global A&H | Reportable segments | Managing general underwriters
Segment information
Unallocated LAE	(4.1)
Other underwriting expenses	(2.7)	(8.4)
General and administrative expenses	$ 16.2	9.5
Specialty & Casualty | Reportable segments
Segment information
Number of core products | product	4
Gross written premiums	$ 120.9	115.5
Net written premiums	108.2	100.6
Net earned insurance and reinsurance premiums	75.7	54.4
Loss and allocated LAE	(47.6)	(21.6)
Insurance and reinsurance acquisition expenses	(20.5)	(14.1)
Technical profit (loss)	7.6	18.7
Unallocated LAE	(1.9)	(1.2)
Other underwriting expenses	(8.2)	(8.0)
Underwriting (loss) income	(2.5)	9.5
Underwriting (loss) income, including net service fee income	$ (2.5)	$ 9.5
Underwriting Ratios
Loss ratio	65.40%	41.90%
Acquisition expense ratio	27.10%	25.90%
Other underwriting expense ratio	10.80%	14.70%
Combined ratio	103.30%	82.50%
Specialty & Casualty | Reportable segments | Minimum
Segment information
Pre-agreed domestic and export sales of goods and services coverage period	60 days
Specialty & Casualty | Reportable segments | Maximum
Segment information
Pre-agreed domestic and export sales of goods and services coverage period	120 days
Runoff & Other | Reportable segments
Segment information
Gross written premiums	$ 1.4	$ 7.5
Net written premiums	0.4	6.1
Net earned insurance and reinsurance premiums	0.4	6.0
Loss and allocated LAE	(1.1)	2.4
Insurance and reinsurance acquisition expenses	(0.7)	(0.7)
Technical profit (loss)	(1.4)	7.7
Unallocated LAE	(0.5)	(0.9)
Other underwriting expenses	(2.1)	(1.4)
Underwriting (loss) income	(4.0)	5.4
Underwriting (loss) income, including net service fee income	(4.8)	4.3
Underwriting Ratios
Goodwill and intangible assets	8.1	5.0
Runoff & Other | Reportable segments | Managing general underwriters
Segment information
General and administrative expenses	$ 0.8	$ 1.1

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Segment information - Net premiums written by client location and underwriting location by reportable segment (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	$ 484.8	$ 469.4
Client location: United States
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	241.6	217.9
Client location: Europe
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	157.7	168.2
Client location: Canada, the Caribbean, Bermuda and Latin America
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	33.9	30.6
Client location: Asia and Other
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	51.6	52.7
Underwriting location: United States
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	60.9	32.3
Underwriting location: Europe
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	272.9	277.1
Underwriting location: Canada, the Caribbean, Bermuda and Latin America
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	133.3	143.0
Underwriting location: Asia and Other
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	17.7	17.0
Global Property | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	241.3	247.2
Global Property | Client location: United States | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	61.9	87.0
Global Property | Client location: Europe | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	124.8	106.3
Global Property | Client location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	24.5	23.2
Global Property | Client location: Asia and Other | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	30.1	30.7
Global Property | Underwriting location: United States | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	8.0	5.3
Global Property | Underwriting location: Europe | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	154.6	136.5
Global Property | Underwriting location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	62.4	89.8
Global Property | Underwriting location: Asia and Other | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	16.3	15.6
Global A&H | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	134.9	115.5
Global A&H | Client location: United States | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	111.1	87.5
Global A&H | Client location: Europe | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	8.0	11.6
Global A&H | Client location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	5.0	4.8
Global A&H | Client location: Asia and Other | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	10.8	11.6
Global A&H | Underwriting location: United States | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	40.3	21.0
Global A&H | Underwriting location: Europe | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	63.6	68.6
Global A&H | Underwriting location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	30.7	25.7
Global A&H | Underwriting location: Asia and Other | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	0.3	0.2
Specialty & Casualty | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	108.2	100.6
Specialty & Casualty | Client location: United States | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	68.4	37.3
Specialty & Casualty | Client location: Europe | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	24.8	50.3
Specialty & Casualty | Client location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	4.4	2.6
Specialty & Casualty | Client location: Asia and Other | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	10.6	10.4
Specialty & Casualty | Underwriting location: United States | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	12.4	(0.1)
Specialty & Casualty | Underwriting location: Europe | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	54.6	72.0
Specialty & Casualty | Underwriting location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	40.2	27.5
Specialty & Casualty | Underwriting location: Asia and Other | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	1.0	1.2
Runoff & Other | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	0.4	6.1
Runoff & Other | Client location: United States | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	0.2	6.1
Runoff & Other | Client location: Europe | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	0.1
Runoff & Other | Client location: Asia and Other | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	0.1
Runoff & Other | Underwriting location: United States | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	0.2	$ 6.1
Runoff & Other | Underwriting location: Europe | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	0.1
Runoff & Other | Underwriting location: Asia and Other | Reportable segments
Net premiums written by client location and underwriting location by reportable segment
Net written premiums	$ 0.1

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Reserves for unpaid losses and loss adjustment expenses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Summary of the loss and LAE reserve activities
Gross beginning balance	$ 2,016.7	$ 1,898.5
Less beginning reinsurance recoverable on unpaid losses	(350.2)	(319.7)
Net loss and LAE reserve balance	1,666.5	1,578.8
Losses and LAE incurred relating to:
Current year losses	167.3	143.5
Prior years losses	16.6	(2.5)
Total net incurred losses and LAE	183.9	141.0
Foreign currency translation adjustment to net loss and LAE reserves	(3.4)	6.7
Loss and LAE paid relating to:
Current year losses	36.2	31.3
Prior years losses	183.8	147.1
Total loss and LAE payments	220.0	178.4
Net ending balance	1,627.0	1,548.1
Plus ending reinsurance recoverable on unpaid losses	349.3	327.8
Gross ending balance	$ 1,976.3	$ 1,875.9

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Reserves for unpaid losses and loss adjustment expenses - By segment (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Reserves for unpaid losses and loss adjustment expenses
Unfavorable (favorable) loss reserve development	$ 16.6	$ (2.5)
Global Property
Reserves for unpaid losses and loss adjustment expenses
Unfavorable (favorable) loss reserve development	11.6	17.2
Global Property | Natural catastrophes
Reserves for unpaid losses and loss adjustment expenses
Unfavorable (favorable) loss reserve development		6.4
Hurricanes Harvey, Irma and Maria
Reserves for unpaid losses and loss adjustment expenses
Unfavorable (favorable) loss reserve development	15.6
Global A&H
Reserves for unpaid losses and loss adjustment expenses
Unfavorable (favorable) loss reserve development	5.1	(3.7)
Runoff & Other
Reserves for unpaid losses and loss adjustment expenses
Unfavorable (favorable) loss reserve development	1.2	(8.9)
Specialty & Casualty
Reserves for unpaid losses and loss adjustment expenses
Unfavorable (favorable) loss reserve development	$ (1.3)	$ (7.1)

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Third party reinsurance (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Third party reinsurance
Reinsurance recoverable on paid losses	$ 50.5	$ 55.0
Reinsurance recoverable on unpaid losses	$ 349.3	$ 350.2

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Investment securities - Net Investment Income (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net Investment Income
Total investment income	$ 23.8	$ 13.1
Investment expenses	(3.7)	(2.3)
Net investment income	20.1	10.8
Fixed maturity investments
Net Investment Income
Total investment income	16.8	9.9
Short-term investments
Net Investment Income
Total investment income	0.4	0.8
Equity securities
Net Investment Income
Total investment income	2.7	1.2
Other long-term investments
Net Investment Income
Total investment income	$ 3.9	$ 1.2

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Investment securities - Net Realized and Unrealized Investment gains (losses) (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Net Realized and Unrealized Investment Gains (losses)
Gross realized gains	$ 14.1	$ 8.4
Gross realized (losses)	(5.1)	(12.1)
Net realized gains (losses) on investments	9.0	(3.7)
Net unrealized gains on investments	74.0	16.0
Net realized and unrealized investment gains on investments	83.0	12.3
Realized gains (losses) due to foreign currency	10.9	(1.1)
Unrealized gains due to foreign currency	25.0	18.9
Total unrealized investment (losses) gains - Level 3 investments	8.8	0.4
Fixed maturity investments
Net Realized and Unrealized Investment Gains (losses)
Net realized gains (losses) on investments	6.8	(2.8)
Net unrealized gains on investments	29.7	3.0
Short-term investments
Net Realized and Unrealized Investment Gains (losses)
Net realized gains (losses) on investments	0.1
Net unrealized gains on investments	2.7
Equity securities
Net Realized and Unrealized Investment Gains (losses)
Net realized gains (losses) on investments	(0.6)	(1.5)
Net unrealized gains on investments	25.1	6.4
Other long-term investments
Net Realized and Unrealized Investment Gains (losses)
Net realized gains (losses) on investments	3.3	0.6
Net unrealized gains on investments	17.1	6.6
Total unrealized investment (losses) gains - Level 3 investments	8.8	$ 0.4
Derivative instruments
Net Realized and Unrealized Investment Gains (losses)
Net realized gains (losses) on investments	(0.6)
Net unrealized gains on investments	$ (0.6)

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Investment securities - Fixed maturity investments (Details) - Fixed maturity investments - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Fixed maturity investments
Cost or amortized cost	$ 1,814.8	$ 1,952.9
Gross unrealized gains	9.3	4.3
Gross unrealized losses	(12.4)	(28.4)
Net foreign currency gains (losses)	34.7	20.4
Fair value	$ 1,846.4	1,949.2
Weighted average duration of fixed income portfolio including short-term investments	1 year 7 months 6 days
Weighted average duration of fixed income portfolio excluding short-term investments	2 years 2 months 12 days
Cost or amortized cost
Cost or amortized cost due in one year or less	$ 241.7	249.6
Cost or amortized cost due after one year through five years	554.3	635.6
Cost or amortized cost due after five years through ten years	10.9	26.2
Cost or amortized cost due after ten years		0.1
Fair Value
Fair value due in one year or less	250.0	254.6
Fair value due after one year through five years	566.8	636.4
Fair value due after five years through ten years	10.8	25.7
Fair value due after ten years		0.1
AAA
Fixed maturity investments
Fair value	575.6	602.0
AA
Fixed maturity investments
Fair value	799.8	818.0
A
Fixed maturity investments
Fair value	254.2	290.5
BBB
Fixed maturity investments
Fair value	154.4	167.4
Other
Fixed maturity investments
Fair value	62.4	71.3
Corporate debt securities
Fixed maturity investments
Cost or amortized cost	614.6	694.1
Gross unrealized gains	3.0	1.4
Gross unrealized losses	(2.7)	(7.3)
Net foreign currency gains (losses)	13.2	7.6
Fair value	628.1	695.8
Asset-backed securities
Fixed maturity investments
Cost or amortized cost	476.7	496.3
Gross unrealized gains	0.3	0.1
Gross unrealized losses	(3.9)	(3.8)
Net foreign currency gains (losses)	3.8	1.9
Fair value	476.9	494.5
Residential mortgage-backed securities
Fixed maturity investments
Cost or amortized cost	415.1	413.0
Gross unrealized gains	5.2	1.7
Gross unrealized losses	(3.9)	(7.1)
Net foreign currency gains (losses)	9.4	5.9
Fair value	425.8	413.5
U.S. government and government agency
Fixed maturity investments
Cost or amortized cost	151.9	163.9
Gross unrealized gains	0.3	0.3
Gross unrealized losses	(0.2)	(0.5)
Net foreign currency gains (losses)	6.4	4.2
Fair value	158.4	167.9
Commercial mortgage-backed securities
Fixed maturity investments
Cost or amortized cost	113.6	117.7
Gross unrealized gains	0.4	0.2
Gross unrealized losses	(1.6)	(2.7)
Net foreign currency gains (losses)	1.2	0.7
Fair value	113.6	115.9
Non-U.S. government and government agency
Fixed maturity investments
Cost or amortized cost	37.8	50.6
Gross unrealized losses	(0.1)	(0.2)
Net foreign currency gains (losses)	0.8	(0.1)
Fair value	38.5	50.3
Preferred stocks
Fixed maturity investments
Cost or amortized cost	2.5	14.5
Gross unrealized gains	0.1	0.6
Gross unrealized losses		(6.8)
Net foreign currency gains (losses)	(0.1)	0.2
Fair value	2.5	8.5
Cost or amortized cost
Cost or amortized cost without single maturity date	2.5	14.5
Fair Value
Fair value without single maturity date	2.5	8.5
U.S. States, municipalities, and political subdivision
Fixed maturity investments
Cost or amortized cost	2.6	2.8
Fair value	2.6	2.8
Asset-backed securities
Cost or amortized cost
Cost or amortized cost without single maturity date	1,005.4	1,026.9
Fair Value
Fair value without single maturity date	1,016.3	1,023.9
Sub-prime securities
Fixed maturity investments
Fair value	37.6	42.6
Sub-prime securities | AAA
Fixed maturity investments
Fair value	12.7	17.1
Sub-prime securities | AA
Fixed maturity investments
Fair value	11.5	9.8
Sub-prime securities | A
Fixed maturity investments
Fair value	4.4	6.0
Sub-prime securities | BBB
Fixed maturity investments
Fair value	4.1	4.7
Sub-prime securities | Other
Fixed maturity investments
Fair value	$ 4.9	$ 5.0

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Investment securities - Equity securities and Other long-term investments (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Equity securities
Equity securities and Other long-term investments
Cost or amortized cost	$ 398.4	$ 409.4
Gross unrealized gains	26.2	17.8
Gross unrealized losses	(38.7)	(50.8)
Net foreign currency gains (losses)	8.5	3.6
Fair value	394.4	380.0
Other long-term investments
Equity securities and Other long-term investments
Cost or amortized cost	351.7	337.6
Gross unrealized gains	48.3	32.6
Gross unrealized losses	(20.5)	(13.5)
Net foreign currency gains (losses)	10.2	8.3
Fair value	389.7	365.0
Other long-term investments | Hedge funds and private equity funds
Equity securities and Other long-term investments
Fair value	301.7	301.4
Other long-term investments | Limited liability companies and private equity securities
Equity securities and Other long-term investments
Fair value	$ 88.0	$ 63.6

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Investment securities - Hedge Funds and Private Equity Funds (Details) - Other long-term investments $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2019 USD ($) item	Dec. 31, 2018 USD ($)
Equity securities and Other long-term investments
Largest investment in single fund	$ 50.8	$ 54.8
Other long-term investments	389.7	365.0
Hedge funds and private equity funds
Equity securities and Other long-term investments
Other long-term investments	301.7	301.4
Unfunded Commitments	$ 53.2	82.0
Hedge funds
Equity securities and Other long-term investments
Number of investment funds in which the investments are held | item	9
Other long-term investments	$ 123.1	118.3
Unfunded Commitments	0.0
Long/short multi-sector
Equity securities and Other long-term investments
Other long-term investments	49.5	41.0
Distressed mortgage credit
Equity securities and Other long-term investments
Other long-term investments	50.8	54.8
Private credit
Equity securities and Other long-term investments
Other long-term investments	20.3	20.0
Other
Equity securities and Other long-term investments
Other long-term investments	$ 2.5	2.5
Private equity securities
Equity securities and Other long-term investments
Number of investment funds in which the investments are held | item	28
Other long-term investments	$ 178.6	183.1
Unfunded Commitments	53.2	82.0
Energy infrastructure & services
Equity securities and Other long-term investments
Other long-term investments	87.5	93.7
Unfunded Commitments	30.7	54.2
Multi-sector
Equity securities and Other long-term investments
Other long-term investments	9.2	9.0
Unfunded Commitments	0.7	0.7
Healthcare
Equity securities and Other long-term investments
Other long-term investments	31.7	31.7
Unfunded Commitments	15.6	15.6
Life settlement
Equity securities and Other long-term investments
Other long-term investments	23.9	23.7
Manufacturing/Industrial
Equity securities and Other long-term investments
Other long-term investments	23.6	23.6
Unfunded Commitments	3.1	10.4
Private equity secondaries
Equity securities and Other long-term investments
Other long-term investments	1.1	1.1
Unfunded Commitments	1.1	1.1
Real estate
Equity securities and Other long-term investments
Other long-term investments	0.3	$ 0.3
Other
Equity securities and Other long-term investments
Other long-term investments	1.3
Unfunded Commitments	$ 2.0

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Investment securities - Hedge Funds redemption frequency and Private Equity Fund lock-up period (Details) - Other long-term investments - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Equity securities and Other long-term investments
Other long-term investments	$ 389.7	$ 365.0
Hedge funds
Equity securities and Other long-term investments
Other long-term investments	123.1	118.3
Outstanding distribution from investments	0.0
Hedge funds | Monthly Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	32.7
Hedge funds | Quarterly Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	0.8
Hedge funds | Semi-annual Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	0.8
Hedge funds | Annual Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	88.8
Private equity securities
Equity securities and Other long-term investments
Other long-term investments	178.6	183.1
Outstanding distribution from investments	53.2	$ 82.0
Private equity securities | Lock up period of 1 - 3 years
Equity securities and Other long-term investments
Other long-term investments	12.6
Private equity securities | Lock up period of 3 - 5 years
Equity securities and Other long-term investments
Other long-term investments	4.3
Private equity securities | Lock up period of 5 - 10 years
Equity securities and Other long-term investments
Other long-term investments	161.7
30-59 days notice | Hedge funds
Equity securities and Other long-term investments
Other long-term investments	0.8
30-59 days notice | Hedge funds | Quarterly Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	0.8
60-89 days notice | Hedge funds
Equity securities and Other long-term investments
Other long-term investments	50.4
60-89 days notice | Hedge funds | Monthly Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	32.7
60-89 days notice | Hedge funds | Semi-annual Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	0.8
60-89 days notice | Hedge funds | Annual Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	16.9
90-119 days notice | Hedge funds
Equity securities and Other long-term investments
Other long-term investments	51.6
90-119 days notice | Hedge funds | Annual Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	51.6
120+ days notice | Hedge funds
Equity securities and Other long-term investments
Other long-term investments	20.3
120+ days notice | Hedge funds | Annual Redemption Frequency
Equity securities and Other long-term investments
Other long-term investments	$ 20.3

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Investment securities - Investments Held on Deposit or as Collateral and Unsettled investment purchases and sales (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Marketable securities
Investments held in trusts	$ 764.9	$ 792.4
Investments held in trusts - fair value	779.5	801.2
Accounts payable
Marketable securities
Unsettled investment purchases	9.9	3.2
Accounts receivable
Marketable securities
Unsettled investment sales	1.7	$ 5.0
Interest rate cap | Derivatives not designated as hedging instruments
Marketable securities
Collateral balances held	$ 0.2

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Fair value measurements - Fair Value Measurements by Level (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Assets measured at fair value
Fixed maturity investments, at fair value	$ 1,846.4	$ 1,949.2
Short-term investments	833.6	715.5
Equity securities	394.4	380.0
Other long-term investments	88.0	63.6
Total investments	3,162.4	3,108.3
Derivative instruments	0.8	4.1
Total assets measured at fair value	3,163.2	3,112.4
Liabilities measured at fair value
Contingent consideration liabilities	28.8	28.8
Derivative instruments	5.3	5.1
Total liabilities measured at fair value	34.1	33.9
U.S. government and government agency
Assets measured at fair value
Fixed maturity investments, at fair value	158.4	167.9
Corporate debt securities
Assets measured at fair value
Fixed maturity investments, at fair value	628.1	695.8
Residential mortgage-backed securities
Assets measured at fair value
Fixed maturity investments, at fair value	425.8	494.5
Asset-backed securities
Assets measured at fair value
Fixed maturity investments, at fair value	476.9	413.5
Commercial mortgage-backed securities
Assets measured at fair value
Fixed maturity investments, at fair value	113.6	115.9
Non-U.S. government and government agency
Assets measured at fair value
Fixed maturity investments, at fair value	38.5	50.3
Preferred stocks
Assets measured at fair value
Fixed maturity investments, at fair value	2.5	8.5
U.S. States, municipalities, and political subdivision
Assets measured at fair value
Fixed maturity investments, at fair value	2.6	2.8
Hedge funds and private equity funds
Liabilities measured at fair value
Fair value of hedges	301.7	301.4
Level 1
Assets measured at fair value
Fixed maturity investments, at fair value	190.9	207.6
Short-term investments	792.5	679.3
Equity securities	393.5	380.0
Total investments	1,376.9	1,266.9
Derivative instruments	0.5
Total assets measured at fair value	1,377.4	1,266.9
Liabilities measured at fair value
Derivative instruments	0.2	0.5
Total liabilities measured at fair value	0.2	0.5
Level 1 | U.S. government and government agency
Assets measured at fair value
Fixed maturity investments, at fair value	157.0	164.7
Level 1 | Non-U.S. government and government agency
Assets measured at fair value
Fixed maturity investments, at fair value	33.9	42.9
Level 2
Assets measured at fair value
Fixed maturity investments, at fair value	1,655.5	1,736.2
Short-term investments	41.1	36.2
Equity securities	0.9
Total investments	1,697.5	1,772.4
Total assets measured at fair value	1,697.5	1,772.4
Level 2 | U.S. government and government agency
Assets measured at fair value
Fixed maturity investments, at fair value	1.4	3.2
Level 2 | Corporate debt securities
Assets measured at fair value
Fixed maturity investments, at fair value	628.1	695.8
Level 2 | Residential mortgage-backed securities
Assets measured at fair value
Fixed maturity investments, at fair value	425.8	494.5
Level 2 | Asset-backed securities
Assets measured at fair value
Fixed maturity investments, at fair value	476.9	413.5
Level 2 | Commercial mortgage-backed securities
Assets measured at fair value
Fixed maturity investments, at fair value	113.6	115.9
Level 2 | Non-U.S. government and government agency
Assets measured at fair value
Fixed maturity investments, at fair value	4.6	7.4
Level 2 | Preferred stocks
Assets measured at fair value
Fixed maturity investments, at fair value	2.5	3.1
Level 2 | U.S. States, municipalities, and political subdivision
Assets measured at fair value
Fixed maturity investments, at fair value	2.6	2.8
Level 3
Assets measured at fair value
Fixed maturity investments, at fair value		5.4
Other long-term investments	88.0	63.6
Total investments	88.0	69.0
Derivative instruments	0.3	4.1
Total assets measured at fair value	88.3	73.1
Liabilities measured at fair value
Contingent consideration liabilities	28.8	28.8
Derivative instruments	5.1	4.6
Total liabilities measured at fair value	$ 33.9	33.4
Level 3 | Preferred stocks
Assets measured at fair value
Fixed maturity investments, at fair value		$ 5.4

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Fair value measurements - Rollforward of Level 3 Fair Value Measurements (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Rollforward of Level 3 Fair Value Measurements
Transfers from Level 2 to Level 3, Assets	$ 0.0	$ 0.0
Transfers out	0.0	0.0
Rollforward of Level 3, Derivative instruments assets & (liabilities)
Balance at beginning of the period	(0.5)	(6.1)
Total realized and unrealized gains (losses)	(5.1)
Sales/Settlements	0.8
Balance at end of the period	(4.8)	(6.1)
Contingent consideration (liabilities)
Rollforward of Level 3, (liabilities)
Balance at beginning of the period	(28.8)	(42.8)
Balance at end of the period	(28.8)	(42.8)
Fixed maturity investments
Rollforward of Level 3 Fair Value Measurements
Balance at beginning of the period	5.4	8.0
Purchases		0.6
Sales/settlements	(5.4)
Balance at end of the period		8.6
Other long-term investments
Rollforward of Level 3 Fair Value Measurements
Balance at beginning of the period	63.6	64.2
Total realized and unrealized gains	9.3	0.8
Purchases	15.8	0.4
Sales/settlements		(0.2)
Balance at end of the period	88.0	64.9
Other long-term investments | Foreign currency losses
Rollforward of Level 3 Fair Value Measurements
Losses through Other Comprehensive Income	(0.7)	(0.3)
Hedge funds and private equity funds
Rollforward of Level 3, (liabilities)
Fair value of hedges	$ 301.7	$ 221.9

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Fair value measurements - Transfers between levels (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Fair value measurements
Transfers from Level 3 to Level 2, Assets	$ 0.0	$ 0.0
Transfers from Level 2 to Level 3, Assets	$ 0.0	$ 0.0

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Fair value measurements - Significant Unobservable Inputs (Details) $ in Millions	Mar. 31, 2019 USD ($) $ / shares	Dec. 31, 2018 USD ($) $ / shares
Significant Unobservable Inputs
Equity securities	$ 394.4	$ 380.0
Derivative assets	0.8	4.1
Derivative liabilities	(5.3)	(5.1)
Contingent consideration	(28.8)	(28.8)
Level 3
Significant Unobservable Inputs
Derivative assets	0.3	4.1
Derivative liabilities	(5.1)	(4.6)
Contingent consideration	(28.8)	(28.8)
Level 3 | Share price of recent transaction | Private equity securities
Significant Unobservable Inputs
Equity securities	32.5	32.5
Level 3 | Share price of recent transaction | Private equity securities 1
Significant Unobservable Inputs
Equity securities	5.1	0.3
Level 3 | Share price of recent transaction | Preferred stocks
Significant Unobservable Inputs
Equity securities	$ 17.5	4.6
Level 3 | Share price of recent transaction | Preferred stock 1
Significant Unobservable Inputs
Equity securities		$ 0.8
Level 3 | Share price of recent transaction | Purchase share price | Private equity securities
Significant Unobservable Inputs
Equity Securities, Input | $ / shares	40.63	40.63
Level 3 | Share price of recent transaction | Purchase price | Private equity securities 1
Significant Unobservable Inputs
Equity Securities, Input | $ / shares	7.74	10.00
Level 3 | Share price of recent transaction | Purchase price | Preferred stocks
Significant Unobservable Inputs
Equity Securities, Input | $ / shares	7.74	1.88
Level 3 | Share price of recent transaction | Purchase price | Preferred stock 1
Significant Unobservable Inputs
Equity Securities, Input | $ / shares		0.8
Level 3 | Multiple of GAAP book value | Private equity securities
Significant Unobservable Inputs
Equity securities	$ 16.8	$ 14.7
Level 3 | Multiple of GAAP book value | Book value multiple | Private equity securities
Significant Unobservable Inputs
Equity Securities, Input | $ / shares	1.0	0.9
Level 3 | Purchase price of recent transaction | Private equity securities
Significant Unobservable Inputs
Equity securities	$ 1.0	$ 0.9
Level 3 | Purchase price of recent transaction | Private equity securities 1
Significant Unobservable Inputs
Equity securities	0.8
Level 3 | Purchase price of recent transaction | Private equity securities 2
Significant Unobservable Inputs
Equity securities	0.3
Level 3 | Purchase price of recent transaction | Private debt instrument
Significant Unobservable Inputs
Private debt instrument	7.8	9.0
Level 3 | Purchase price of recent transaction | Private debt instrument 1
Significant Unobservable Inputs
Private debt instrument	6.0	6.0
Level 3 | Purchase price of recent transaction | Private debt instrument 2
Significant Unobservable Inputs
Private debt instrument	$ 0.2
Level 3 | Purchase price of recent transaction | Private debt instrument 3
Significant Unobservable Inputs
Private debt instrument		$ 0.2
Level 3 | Purchase price of recent transaction | Purchase price | Private equity securities
Significant Unobservable Inputs
Equity Securities, Input | $ / shares	10.0	1.88
Level 3 | Purchase price of recent transaction | Purchase price | Private equity securities 1
Significant Unobservable Inputs
Equity Securities, Input | $ / shares	0.8
Level 3 | Purchase price of recent transaction | Purchase price | Private equity securities 2
Significant Unobservable Inputs
Equity Securities, Input | $ / shares	0.30
Level 3 | Purchase price of recent transaction | Purchase price | Private debt instrument
Significant Unobservable Inputs
Debt instrument, Input | $ / shares	9.0	9.0
Level 3 | Purchase price of recent transaction | Purchase price | Private debt instrument 1
Significant Unobservable Inputs
Debt instrument, Input | $ / shares	6.00	6.0
Level 3 | Purchase price of recent transaction | Purchase price | Private debt instrument 2
Significant Unobservable Inputs
Debt instrument, Input | $ / shares	0.2
Level 3 | Purchase price of recent transaction | Purchase price | Private debt instrument 3
Significant Unobservable Inputs
Debt instrument, Input | $ / shares		0.2
Level 3 | Third party appraisal | Weather derivatives
Significant Unobservable Inputs
Derivative assets		$ 3.9
Derivative liabilities	$ (1.3)
Level 3 | Third party appraisal | Interest rate cap
Significant Unobservable Inputs
Derivative assets	0.1	0.2
Level 3 | Third party appraisal | Foreign currency swaps
Significant Unobservable Inputs
Derivative liabilities	(3.8)	$ (4.6)
Level 3 | Third party appraisal | Effective yield | Foreign currency forwards
Significant Unobservable Inputs
Derivative assets	$ 0.2
Level 3 | Third party appraisal | Broker quote | Foreign currency forwards
Significant Unobservable Inputs
Derivative assets, Input | $ / shares	0.2
Level 3 | Third party appraisal | Broker quote | Weather derivatives
Significant Unobservable Inputs
Derivative assets, Input | $ / shares		3.9
Derivative liabilities, Input | $ / shares	(1.3)
Level 3 | Third party appraisal | Broker quote | Interest rate cap
Significant Unobservable Inputs
Derivative assets, Input | $ / shares	0.1	0.2
Level 3 | Third party appraisal | Broker quote | Foreign currency swaps
Significant Unobservable Inputs
Derivative liabilities, Input | $ / shares	(3.8)	(4.60)
Level 3 | External valuation model
Significant Unobservable Inputs
Contingent consideration	$ (28.8)	$ (28.8)
Level 3 | External valuation model | Discounted future payments
Significant Unobservable Inputs
Contingent consideration, Input | $ / shares	(28.80)	(28.80)

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Fair value measurements - Financial instruments disclosed, but not carried at fair value (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Financial instruments not carried at fair value
Debt	$ 686.1	$ 696.8
Carrying Value
Financial instruments not carried at fair value
Redeemable preference shares	240.6	232.2
2017 SEK Subordinated Notes
Financial instruments not carried at fair value
Debt	292.7	303.6
2017 SEK Subordinated Notes | Carrying Value
Financial instruments not carried at fair value
Debt	292.7	303.6
2016 SIG Senior Notes
Financial instruments not carried at fair value
Debt	393.4	393.2
2016 SIG Senior Notes | Carrying Value
Financial instruments not carried at fair value
Debt	393.4	393.2
Level 3 | Fair Value
Financial instruments not carried at fair value
Redeemable preference shares	200.2	191.7
Level 3 | 2017 SEK Subordinated Notes | Fair Value
Financial instruments not carried at fair value
Debt	297.0	309.5
Level 3 | 2016 SIG Senior Notes | Fair Value
Financial instruments not carried at fair value
Debt	$ 361.7	$ 347.6

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Debt and standby letters of credit facilities (Details) kr in Millions, $ in Millions	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Sep. 22, 2017 SEK (kr)	Sep. 22, 2017 USD ($)	Nov. 01, 2016 USD ($)
Debt and standby letters of credit facilities
Long-term Debt, Total	$ 686.1	$ 696.8
2017 SEK Subordinated Notes
Debt and standby letters of credit facilities
Debt, at face value	296.6	307.6	kr 2,750.0	$ 346.1
Unamortized issuance costs	(3.9)	(4.0)
Long-term Debt, Total	$ 292.7	$ 303.6
Effective rate	3.70%	3.80%
2016 SIG Senior Notes
Debt and standby letters of credit facilities
Debt, at face value	$ 400.0	$ 400.0			$ 400.0
Unamortized discount	(2.5)	(2.6)
Unamortized issuance costs	(4.1)	(4.2)
Long-term Debt, Total	$ 393.4	$ 393.2
Effective rate	4.70%	4.70%			4.70%

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Debt and standby letters of credit facilities - 2017 SEK Subordinated Notes and 2016 SIG Senior Notes (Details) kr in Millions, $ in Millions				3 Months Ended
	Sep. 22, 2017 SEK (kr)	Sep. 22, 2017 USD ($)	Nov. 01, 2016 USD ($)	Mar. 31, 2019 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2018 USD ($)	Sep. 22, 2017 USD ($)
Debt and standby letters of credit facilities
Interest expense on debt				$ 7.6	$ 7.7
2017 SEK Subordinated Notes
Debt and standby letters of credit facilities
Debt notes issued	kr 2,750.0			296.6		$ 307.6	$ 346.1
Issue price (as a percent)	100.00%	100.00%
Term of redemption following occurrence of Specified Event (in days)	90 days	90 days
Debt issuance costs							$ 4.6
Underwriting fees	kr 27.5	$ 3.5
Foreign currency exchange (losses) gains on remeasurement of debt				11.0	5.8
Interest expense on debt				$ 2.8	$ 2.9
Annual interest rate (as a percent)				3.70%	3.50%
Effective rate				3.70%		3.80%
2016 SIG Senior Notes
Debt and standby letters of credit facilities
Debt notes issued			$ 400.0	$ 400.0		$ 400.0
Issue price (as a percent)			99.209%
Debt issuance costs			$ 5.1
Underwriting fees			3.4
Interest expense on debt				$ 4.8	$ 4.8
Net proceeds			$ 392.4
Annual interest rate (as a percent)			4.60%
Effective rate			4.70%	4.70%		4.70%

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Debt and standby letters of credit facilities - Standby Letter of Credit Facilities (Details) $ in Millions, kr in Billions	Mar. 31, 2019 SEK (kr)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 SEK (kr)	Dec. 31, 2018 USD ($)	Nov. 09, 2018 USD ($) agreement
Other Secured Letter of Credit and Trust Arrangement | Sirius America Insurance Company
Standby Letter of Credit Facilities
Secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust		$ 56.7		$ 56.2
Other Secured Letter of Credit and Trust Arrangement | Sirius Bermuda Insurance Company Ltd.
Standby Letter of Credit Facilities
Secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust		347.2		319.7
Sirius International | Nordea Bank Finland Abp
Standby Letter of Credit Facilities
Borrowing capacity					$ 125.0
Sirius International | DNB Bank ASA London Branch
Standby Letter of Credit Facilities
Borrowing capacity					$ 35.0
Sirius International | Standby Letters of Credit
Standby Letter of Credit Facilities
Number of standby letter of credit agreements renewed | agreement					2
Borrowing capacity					$ 160.0
Sirius International | Unsecured Standby Letters of Credit | DNB Bank ASA London Branch
Standby Letter of Credit Facilities
Borrowing capacity					$ 25.0
Sirius International | Other Secured Letter of Credit and Trust Arrangement
Standby Letter of Credit Facilities
Secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust	kr 2.7	$ 296.0	kr 2.9	$ 321.3

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Debt and standby letters of credit facilities - Revolving Credit Facility (Details) - Revolving Credit Facility - USD ($) $ in Millions	1 Months Ended
	Feb. 28, 2018	Mar. 31, 2019
Line of Credit Facility [Line Items]
Term of credit facility	3 years
Borrowing capacity	$ 300
Outstanding amount		$ 0

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Debt and standby letters of credit facilities - Interest (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Debt and standby letters of credit facilities
Total interest expense incurred	$ 7.6	$ 7.7
Total interest paid	$ 2.7	$ 2.9

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Income taxes (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Income taxes
Income tax expense	$ 17.2	$ 11.1
Pre-tax income	$ 121.3	$ 54.4
Effective tax rate (as a percent)	14.20%	20.30%
Statutory tax rate (as a percent)	21.40%	22.00%
Tax Cuts and Jobs Act of 2017, BEAT tax rate, 2019-2025 (as a percent)	10.00%
Tax Cuts and Jobs Act of 2017, BEAT tax rate, 2026 and thereafter (as a percent)	12.50%
Provision for income taxes related to BEAT	$ 0.0		$ 0.0
Provision for income taxes related to GILTI	$ 0.0		$ 0.0

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Income taxes - Deferred tax asset, net of valuation allowance and Uncertain tax positions (Details) $ in Millions	Mar. 31, 2019 USD ($)
Income taxes
Net deferred tax liability, net of valuation allowance	$ 59.0
Other net deferred tax liabilities	4.5
Uncertain tax positions
Total reserve for unrecognized tax benefits	63.3
Reversal of reserves for unrecognized tax benefits on permanent differences and interest and penalties	63.2
Reversal of reserves for unrecognized tax benefits on temporary differences	0.1
U.S. subsidiaries
Income taxes
Net deferred tax assets	33.1
Luxembourg subsidiaries
Income taxes
Net deferred tax assets	131.5
United Kingdom subsidiaries
Income taxes
Net deferred tax assets	11.5
Sweden subsidiaries
Income taxes
Net deferred tax assets	230.6
Swedish Tax Authority | Sweden subsidiaries
Uncertain tax positions
Reserve attributable to uncertain tax positions	$ 63.0

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Derivatives - Interest Rate Cap (Details) - Interest rate cap $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($) item
Derivatives
Number of financial institutions entered into derivative contracts | item	2
Derivatives not designated as hedging instruments
Derivatives
Collateral balances held	$ 0.2
Barclays Bank Plc | Derivatives not designated as hedging instruments | A
Derivatives
Collateral balances held	0.1
Nordea Bank Abp | Derivatives not designated as hedging instruments | AA-
Derivatives
Collateral balances held	$ 0.1

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Derivatives - Classification and Fair Value of Derivatives in Consolidated Balance Sheets (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Derivatives
Derivative assets	$ 0.8	$ 4.1
Derivative liabilities	5.3	5.1
Interest rate cap | Derivatives not designated as hedging instruments
Derivatives
Notional Value	250.0	250.0
Interest rate cap | Derivatives not designated as hedging instruments | Other assets
Derivatives
Derivative assets	0.1	0.2
Foreign currency swaps | Derivatives not designated as hedging instruments
Derivatives
Notional Value	90.0	45.0
Foreign currency swaps | Derivatives not designated as hedging instruments | Other liabilities
Derivatives
Derivative liabilities	3.8	4.6
Foreign currency forwards | Derivatives not designated as hedging instruments
Derivatives
Notional Value	15.0
Foreign currency forwards | Derivatives not designated as hedging instruments | Other assets
Derivatives
Derivative assets	0.2
Weather derivatives | Derivatives not designated as hedging instruments
Derivatives
Notional Value	121.6	150.5
Weather derivatives | Derivatives not designated as hedging instruments | Other assets
Derivatives
Derivative assets		3.9
Weather derivatives | Derivatives not designated as hedging instruments | Other liabilities
Derivatives
Derivative liabilities	1.3
Equity futures contracts | Derivatives not designated as hedging instruments
Derivatives
Notional Value	17.0
Equity futures contracts | Derivatives not designated as hedging instruments | Other liabilities
Derivatives
Derivative liabilities	0.2
Equity put options | Derivatives not designated as hedging instruments
Derivatives
Notional Value	10.9	6.2
Equity put options | Derivatives not designated as hedging instruments | Other assets
Derivatives
Derivative assets	$ 0.5
Equity put options | Derivatives not designated as hedging instruments | Other liabilities
Derivatives
Derivative liabilities		$ 0.5

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Derivatives - Classification and Fair Value of Derivatives in Consolidated of (Loss) Income Statements (Details) - Derivatives not designated as hedging instruments - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Interest rate cap | Other revenues
Derivatives
Gains (losses) recognized in earnings	$ (0.1)	$ 0.3
Foreign currency swaps | Net foreign exchange gains (losses)
Derivatives
Gains (losses) recognized in earnings	0.8	1.3
Foreign currency forwards | Net foreign exchange gains (losses)
Derivatives
Gains (losses) recognized in earnings	0.2
Weather derivatives | Other revenues
Derivatives
Gains (losses) recognized in earnings	(6.0)	$ 1.0
Equity futures contracts | Net realized investment gains (losses)
Derivatives
Gains (losses) recognized in earnings	(0.6)
Equity futures contracts | Net unrealized investment gains
Derivatives
Gains (losses) recognized in earnings	(0.2)
Equity put options | Net unrealized investment gains
Derivatives
Gains (losses) recognized in earnings	$ (0.4)

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Share-based compensation (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Share-based compensation
Unrecognized share-based compensation costs	$ 34.3	$ 0.0
Minimum
Share-based compensation
Expected period of recognition	2 years
Maximum
Share-based compensation
Expected period of recognition	3 years
Performance share units
Share-based compensation
Shares granted to employees (in shares)	401,311
Restricted share units
Share-based compensation
Shares granted to employees (in shares)	1,411,714
Stock options | Officer
Share-based compensation
Stock options granted to employees (in shares)	1,374,944

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Common shareholder's equity, mezzanine equity, and non controlling interests - Common shareholder's equity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Nov. 05, 2018
Common shareholder's equity
Common shares authorized	500,000,000
Common shares par value	$ 0.01
Preference shares authorized / designated	100,000,000
Preference shares par value	$ 0.01
Changes in common shareholders' equity
Shares issued beginning of the year	115,151,251	120,000,000
Shares outstanding beginning of the year	115,151,251	120,000,000
Issuance of shares to directors and employees (in shares)	111,052
Shares issued end of the year	115,262,303	120,000,000
Shares outstanding end of the year	115,262,303	120,000,000
Common dividends paid	$ 0.0	$ 0.0
Series B preference shares
Common shareholder's equity
Preference shares authorized / designated			15,000,000
Preference shares par value			$ 0.01

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Common shareholder's equity, mezzanine equity, and non controlling interests - Mezzanine equity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	Nov. 05, 2018
Mezzanine equity
Preference shares authorized / designated	100,000,000
Preference shares par value	$ 0.01
Redeemable preference shares with accrued dividend carrying value	$ 240.6	$ 232.2
Series B preference shares
Mezzanine equity
Preference shares authorized / designated			15,000,000
Preference shares par value			$ 0.01
Preferential rights, Minimum gross proceeds from the issuance of senior or pari passu shares	$ 100.0
Series B preference shares | Sirius Group Private Placement | Preference Share Investors
Mezzanine equity
Share subscriptions (in shares)			11,901,670
Series A redeemable preference shares
Mezzanine equity
Redeemable preference shares outstanding			100,000
Redemption amount of preference shares			$ 95.0
Gain on redemption of preference shares			$ 13.8
Series A redeemable preference shares | IMGAH
Mezzanine equity
Number of convertible preferred shares issued as a consideration	100,000
Preference shares authorized / designated	150,000
Redeemable preference share liquidation preference per share (in dollars per share)	$ 1,000

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Common shareholder's equity, mezzanine equity, and non controlling interests - Non-controlling interests (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Change in non-controlling interest
Balance at beginning	$ 1.7	$ 0.2
Net income attributable to non-controlling interests	0.4	0.2
Other, net	0.1	0.1
Balance at end	2.2	$ 0.5
Alstead Re
Change in non-controlling interest
Balance at beginning	1.7
Balance at end	$ 2.1

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Earnings per share - Basic earnings per share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Numerator:
Net income	$ 104.1	$ 43.3
Less: Income attributable to non-controlling interests	(0.4)	(0.2)
Less: Change in carrying value of Series B preference shares	(8.4)
Less: Accrued dividends on Series A redeemable preference shares		(2.6)
Net income available for dividends out of undistributed earnings	95.3	40.5
Net income available to Sirius Group common shareholders	$ 86.4	$ 38.8
Denominator:
Weighted average shares outstanding for basic earnings per share	115,182,331	120,000,000
Earnings per share
Basic earnings per share	$ 0.75	$ 0.32
Series B preference shares
Numerator:
Less: Earnings attributable to preference shares	$ (8.9)
Series A redeemable preference shares
Numerator:
Less: Earnings attributable to preference shares		$ (1.7)

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Earnings per share - Diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Numerator:
Net income (loss) available to Sirius Group common shareholders	$ 86.4	$ 38.8
Add: Change in carrying value of Series B preference shares	8.4
Net income available to Sirius Group common shareholders on a diluted basis	$ 94.8	$ 38.8
Denominator:
Weighted average shares outstanding for basic earnings per share	115,182,331	120,000,000
Add: Series B preference shares	11,901,670
Add: Unvested performance share units and restricted share units	251,313
Weighted average shares outstanding for diluted earnings per share	127,335,314	120,000,000
Earnings per share
Diluted earnings per share	$ 0.74	$ 0.32
Potentially dilutive securities excluded from the calculation of Diluted earnings per share	19,510,830	0

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Investments in unconsolidated entities - Other long-term investments (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Investments in unconsolidated entities
Other long-term investments	$ 389.7	$ 365.0
Investments in unconsolidated entities
Investments in unconsolidated entities
Other long-term investments	389.7	365.0
Equity method investments	0.0	0.0
Investments in unconsolidated entities | Equity method eligible investments
Investments in unconsolidated entities
Other long-term investments	167.5	169.4
Investments in unconsolidated entities | Equity method ineligible investments
Investments in unconsolidated entities
Other long-term investments	$ 222.2	$ 195.6

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Investments in unconsolidated entities - Equity method unconsolidated entities (Details) - Investments in unconsolidated entities - Equity method eligible investments	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
BE Reinsurance Limited
Investments in unconsolidated entities
Ownership interest	25.00%	25.00%
BioVentures Investors (Offshore) IV LP
Investments in unconsolidated entities
Ownership interest	73.00%	73.00%
Camden Partners Strategic Fund V (Cayman), LP
Investments in unconsolidated entities
Ownership interest	39.40%	36.40%
NEC Cypress Buyer LLC
Investments in unconsolidated entities
Ownership interest	23.50%	13.30%
New Energy Capital Infrastructure Credit Fund LP
Investments in unconsolidated entities
Ownership interest	18.30%	22.90%
New Energy Capital Infrastructure Offshore Credit Fund LP
Investments in unconsolidated entities
Ownership interest	12.20%	54.90%
Scion G7, LP
Investments in unconsolidated entities
Ownership interest	28.30%	28.80%
Tuckerman Capital V LP
Investments in unconsolidated entities
Ownership interest	48.30%	47.60%
Tuckerman Capital V Co-Investment I LP
Investments in unconsolidated entities
Ownership interest	49.50%	47.70%

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Variable interest entities (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Assets:
Fixed maturity investments, at fair value	$ 1,846.4	$ 1,949.2
Short-term investments	833.6	715.5
Cash	116.0	119.4
Insurance and reinsurance premiums receivable	818.7	630.6
Funds held by ceding companies	202.8	186.8
Deferred acquisition costs	152.6	141.6
Other assets	161.1	124.0
Total assets	6,307.0	6,007.7
Liabilities
Loss and loss adjustment expense reserves	1,976.3	2,016.7	$ 1,875.9	$ 1,898.5
Unearned insurance and reinsurance premiums	860.5	647.2
Other liabilities	173.1	150.5
Total liabilities	4,291.2	4,069.3
VIEs
Assets:
Fixed maturity investments, at fair value	3.9	4.0
Short-term investments	0.4	0.3
Cash	0.2	0.2
Total investments	4.5	4.5
Insurance and reinsurance premiums receivable	1.5	0.1
Funds held by ceding companies	4.7	3.7
Deferred acquisition costs	0.5	5.2
Other assets	0.1	0.9
Total assets	11.3	14.4
Liabilities
Loss and loss adjustment expense reserves	3.0	4.6
Unearned insurance and reinsurance premiums	1.7	3.7
Other liabilities	0.1
Total liabilities	$ 4.8	$ 8.3

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Variable interest entities - Unconsolidated VIE (Details) - USD ($) $ in Millions	Mar. 31, 2019	Dec. 31, 2018
Variable interest entities
Other long-term investments	$ 389.7	$ 365.0
Total assets	6,307.0	6,007.7
Unconsolidated VIE
Variable interest entities
Other long-term investments	220.6	209.1
Total assets	220.6	209.1
Other long-term investments
Variable interest entities
Other long term investments	143.8	135.1
Total assets	143.8	135.1
On-Balance Sheet
Variable interest entities
Other long term investments	118.5	103.1
Total assets	118.5	103.1
Off-Balance Sheet
Variable interest entities
Other long term investments	25.3	32.0
Total assets	$ 25.3	$ 32.0

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Transactions with related parties (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Transactions with related parties
Gross written premiums	$ 622.3	$ 615.2
Receivables due from affiliates	19.4		$ 14.3
Payables due to affiliates	0.7
Insurance and MGU affiliates, or their subsidiaries
Transactions with related parties
Gross written premiums	$ 24.1	$ 19.3

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Commitments and contingencies - Leases (Details) $ in Millions	3 Months Ended
	Mar. 31, 2019 USD ($)
Operating Leases Disclosure
Operating lease expense	$ 2.6
Operating lease right-of-use assets	$ 32.0
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	Other Assets
Lease liability	$ 33.9
Current lease liabilities	9.8
Non-current lease liabilities	24.1
Future annual minimum rental payments
2019	7.7
2020	8.9
2021	7.4
2022	6.6
2023	4.2
2024 and after	2.0
Total future annual minimum rental payments as at March 31, 2019	36.8
Less: present value discount	(2.9)
Total lease liability as at March 31, 2019	$ 33.9
Leased offices
Operating Leases Disclosure
Weighted average lease term (years) as at March 31, 2019:	7 years
Weighted average discount rate:	3.80%
Leased equipment
Operating Leases Disclosure
Weighted average lease term (years) as at March 31, 2019:	3 years
Weighted average discount rate:	3.40%