Sirius posts 'disappointing' Q3 results after listing, says CEO

Bermuda-based Sirius International Insurance Group CEO Allan Waters has called the third quarter 2018 results "disappointing" following the listing of the company on Nasdaq.

Sirius became a publicly listed company in November, trading on the Nasdaq, following the completion of its merger agreement with Easterly Acquisition.

For the three months ended Sept. 30, 2018, the net loss attributable to the common shareholder was $28 million. This compares to a net loss of $179 million for the third quarter of 2017.

Sirius Group's combined ratio was 111 percent for the third quarter of 2018 compared to 159 percent for the third quarter of 2017. The improvement in the combined ratio was driven by lower catastrophe losses and higher net favourable prior year loss reserve development, the company said.

Catastrophe losses, net of reinsurance and reinstatement premiums, amounted to $77 million in the quarter, primarily related to typhoon Jebi ($48 million), hurricane Florence ($9 million), and the Kerala floods ($7 million).

"Our first earnings report as a public company is disappointing due primarily to storm losses,” said CEO Allan Waters. “But our journey is a marathon, not a sprint. The Sirius management team is totally dedicated towards growing intrinsic value per share. If we accomplish that well, the stock price will take care of itself over time."

Chief financial officer Kip Oberting added: "Sirius Group had a tough quarter driven largely by catastrophe losses and elevated attritional losses. We also made the decision to exit certain underperforming accounts and re-underwrite certain lines. Our diversified portfolio, global platform, and solid capitalization combined with public company governance positions us well for the future."

Global Property produced an underwriting loss for the quarter of $51 million and a 130 percent combined ratio driven mainly by catastrophe losses and higher current accident year losses.

Global A&H produced $12 million of underwriting income, including net service fee income, and a combined ratio of 96 percent.

Specialty & Casualty produced a $2 million underwriting loss for the quarter and a combined ratio of 103 percent, driven mainly by losses in the discontinued London Marine book.

Runoff & Other produced $8 million of underwriting income mainly from favourable loss reserve movements. Sirius Global Solutions closed on the acquisition of WRM America in the third quarter.

Gross written premiums increased 11 percent year on year in the third quarter to $398 million, driven by top line growth in global property and specialty & casualty segments.

For the nine months ended September 30, 2018 net income attributable to the common shareholder was $110 million compared to a net loss of $172 million in the same period a year ago.

Sirius Group's combined ratio was 94% for the nine months ended September 30, 2018 compared to 114% for the nine months ended September 30, 2017. The decrease in the combined ratio was driven by lower catastrophe losses and higher net favourable prior year loss reserve development.