Sirius posts $67m loss as pandemic losses bite
Claims stemming from the Covid-19 pandemic and natural disasters drove Sirius International Group to a $67 million comprehensive loss in the third quarter.
The reinsurer, which has agreed to merge with fellow Bermudian firm Third Point Re, estimated $39 million of pre-tax losses associated with Covid-19, net of reinsurance and additional premiums due.
Catastrophe losses, net of reinsurance and reinstatement premiums, were $53 million in the quarter ended September 30. The main drivers were Hurricane Laura, ($29 million), an August Midwest derecho ($11 million) and California wildfires ($10 million).
Sirius Group recorded a combined ratio of 115 per cent for the third quarter, indicating an underwriting loss.
For the nine months ended September 30, the comprehensive loss was $202 million, compared to comprehensive income of $34 million for the corresponding period in 2019.
Kip Oberting, chief executive officer of Sirius Group, said: “It was an active quarter for catastrophes and Covid-19 continues to impact our world.
“We remain proactive in our support of our clients as they face, endure and surmount these challenges.
"We have taken actions over the past ten months to optimise our 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.
“Looking ahead, the full extent of these optimisations 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."
Mr Oberting said the merger with Third Point Re was well timed.
"Equally important, the successful completion of our strategic review process preserved Sirius Group’s franchise,“ he said.
“Upon closing of the pending merger, our underwriting teams are poised to go on offence on behalf of a larger balance sheet — at just the right time in the market cycle. We are headed to a sweet spot. Finally.”
Sirus said its book value per common share was $12.66 as of September 30, compared to $13.18 as of June 30, a decrease of 3.9 per cent for the quarter.