Sirius hit by Q3 losses but eyes ‘sweet spot’ post Third Point Re merger

Sirius International Insurance Group reported heavy losses in the third quarter and the first nine months of 2020, but said its efforts to reposition the company were working and it would benefit from hardening rates.

Sirius reported a net loss of $104 million for Q3 2020, having made a loss of $7.6 million in the same quarter in 2019. This included a $39 million pre-tax loss related to its COVID-19 exposures net of reinsurance and additional premiums due, while catastrophe losses for the quarter, net of reinsurance and reinstatement premiums, were $53 million.

For the nine months ended September 30, 2020 the re/insurer reported a net loss of $232.5 million, having made a profit of $104.7 million in the same period of 2019. That included losses related to COVID-19 of $192 million, net of reinsurance and additional premiums due, and catastrophe losses of $72 million, net of reinsurance and reinstatement premiums.

Sirius reported gross written premiums of $356 million for Q3 2020, compared to 413.7 million in the same period of 2019. For the first nine months of the year it generated gross written premiums of $1.5 billion, fractionally down on the $1.52 billion written in the same period of 2019.

Its combined ratio was 115.5 percent for Q3 and 112.5 percent for the first nine months of 2020, compared to 122.8 percent and 107.1 percent, respectively, in 2019.

Kip Oberting, president and chief executive officer of Sirius Group, noted it had been “an active quarter for catastrophes, and COVID-19 continues to impact our world.”

He stressed Sirius has taken actions over the past ten months to optimise its portfolio more aggressively than at any other time over the last decade. “The benefits of these actions began to materialise in the third quarter, with lighter catastrophe losses than Sirius Group would have experienced without such actions,” he added. “Looking ahead, the full extent of these optimizations have yet to materialise. More significantly, market demand for our capacity is increasing, which is driving terms and conditions to become much more appropriate than they had been during the past few years."

Oberting added: “Upon closing of the pending merger [with Third Point Re], our underwriting teams are poised to go on offense on behalf of a larger balance sheet — at just the right time in the market cycle. We are headed to a sweet spot. Finally.”