SiriusPoint Ltd

Good morning, ladies and gentlemen, and welcome to Serious Point Limited third quarter 2022 earnings conference call. Today's presentation, all parties will be in a listen-only mode. As a reminder, this conference call is being recorded. Now I'd like to turn the call over to Ms. Claire Carrington, head of investor relations for Serious Point. Please go ahead, ma'am.

Thank you, operator. Welcome to the Sirius Point Limited earnings call for the third quarter of 2022. Last night, we issued our earnings press release and financial supplement, which are available on our website, www.siriuspt.com. With me here today are Scott Egan, our Chief Executive Officer, and Steve Yendell, our Chief Financial Officer. Before we begin, I would like to remind you that many of the remarks today will contain forward-looking statements based on current expectations. Actual results may differ materially from those projected as a result of certain risks and uncertainties. These refer to the earnings press release and the company's other public filings, including the Form 10-K for the period ended December 31st, 2021, and Form 10-Q for the period ended September 30th, 2022, where you'll find risk factors that could cause actual results to differ materially from those forward-looking statements. In addition, management will refer to certain non-GAAP financial measures, which management believes allow for a more complete understanding of the company's financial results. A reconciliation of these non-GAAP measures to the most comparable GAAP measure is presented in the company's earnings press release that is available on our website. At this time, I will turn the call over to Scott.

Thank you Claire and good morning everyone. For those of you who don't know me, I'm Scott Egan and I joined Sirius Point as CEO six weeks ago. I'd like to begin by saying that I'm pleased to be here and really looking forward to leading Sirius Point to a higher level of performance in the next stage of its development. I have worked in the insurance industry now for 25 years and have significant leadership experience and expertise in risk and financial management much of it gained from steering businesses through transformation and growth. Prior to joining Sirius Point, I served on the board of FTSE 100 company Royal Sun Alliance Group for six years, most recently as CEO of their UK and international business and previously as their group chief financial officer. I've also held senior positions at companies including Aviva, Zurich Financial Services, Brit Insurance, and Towergate Broking. With that brief introduction and acknowledging that I've only been with the company for six weeks, I'd like to share some initial thoughts on Sirius Point and the work already underway. I'll then turn to our third quarter performance and details of the organizational changes that we announced in our earnings release last night. I believe that Sirius Point can be a high-performing organization, but the company's recent performance has not been. This is a company that can and should deliver higher levels of performance, and I look forward to building on the progress made since the merger last year. Our aim is firstly to stabilize and improve underwriting performance, lower our volatility, and shift our business profile to be more heavily weighted towards insurance. Good work has happened in this regard across the entire portfolio, with much of the focus being in reducing our property cap exposure, specifically on decreasing market share and exposure in the international property cap business. That said, myself and the team recognize there is much still to do. Given the impact from cap activity over the quarter, our QT earnings are a good first test against some of these actions. Steve will present these details in more detail, but let me provide an overview. Hurricane Ian was a major industry event, one of the largest ever insured, and our loss as a percentage of shareholder equity compares well against our peers based on their reported quarterly results. Our overall CAT losses for the quarter also benchmark well against the CAT losses posted by our peers in their results. Importantly, our combined ratio from our core operations has improved on a cap-normalized basis approximately 4% year-on-year across both our primary and reinsurance books. Both our reduced catastrophe volatility and improved non-catastrophe underwriting performance are reflective of the significant re-underwriting that has occurred since the merger last year, which has only been through one January renewal cycle since formation. Reinsurance remains an important part of our product offering, but will represent a smaller percentage of our overall portfolio going forward, as we remain focused on reducing our volatility from the global property cap business. At the same time, we are continuing to grow our book of A&H and specialty and casualty business within P&C, which we believe provides attractive risk-adjusted returns and lower overall volatility. We expect the impact of our actions in this regard to gain momentum and be reflected in our 2023 performance. In our insurance and services segment, accident and health continue to see strong growth across the portfolio in the quarter and is capitalizing on new opportunities to bolster the existing book of business. The improvement in year-on-year performance was driven by our wholly owned subsidiary company, International Medical Group, which continues to capitalize on global return to full travel and improved market dynamics. Armada, also a wholly owned subsidiary, also continues to outperform prior year. Overall, our MGAs and MGUs have performed well in the year, with our consolidated MGAs showing a premium growth of 71% year-on-year and with a year-to-date average margin of 15%. Turning now to our organisational priorities, with a significantly reduced We recognize the need to make changes to our operations and workforce to ensure Sirius Point remains fit for the future. As a result, we announced yesterday that Sirius Point is making changes to the structure and composition of our international branch network and will reduce the locations from which we underwrite property cap reinsurance. We will close our offices in Hamburg, Miami, and Singapore, and reduce headcount in Liege and Toronto. Following these anticipated changes and the rescaling of our operating platform, Sirius Point will continue to serve clients and underwrite property catastrophe reinsurance from two hubs, with the North American property cap business written from Bermuda and the international property cap business written from Stockholm, albeit with a revised appetite and focus. This shift in appetite only impacts 10% of our overall portfolio from a premium perspective, although a disproportionately larger amount of our volatility and operating complexity. Importantly, it addresses an underperforming part of our business. Our plan is to have a property cap portfolio which has lower volatility, less reliance on retro reinsurance, and more flexibility. The announcement made yesterday about the change has not been taken lightly, but I'm confident as a result of the actions we're taking now, Sirius Point will emerge as a stronger, more focused company than we were before. Looking forward, our business will be built around four strategic priorities. These are, number one, a focus on profitable underwriting and performance in both insurance, and reinsurance. Number two, leveraging a strong and complementary distribution footprint. Number three, leveraging our specialisms across our insurance, reinsurance, and distribution businesses. And finally, number four, having a customer-focused organization that operates efficiently. When we present our full year results next year, I plan to discuss these areas of focus and our plans in more detail. The strength of Sirius Point lies in our people, and I have complete confidence in them as we navigate this period of transition and drive the business on towards higher levels of performance. We are all working incredibly hard to achieve this. To this end, I'd like to focus on a few changes that we're also announcing with regard to my executive team. Firstly, Monica Kramer-Manahem, who leads out Sirius Point International Business, has made the decision to retire. Monica will remain in her role of President International Reinsurance and CEO of Sirius Point International and continue to be an active member of the executive leadership team as she works with me closely to appoint a successor. Monica has played a hugely significant role in the company over her 40-year career and I am incredibly grateful to her for her continued leadership as we navigate the change in our international platform. Secondly, David Goverin has assumed the expanded role of Global President of Sirius Point and Chief Underwriting Officer. David has outstanding experience in credentials in insurance and reinsurance and has been instrumental in driving the improved underwriting performance across the company. In addition, we welcome two new hires externally to the company. Drew Gallop will join as Head of Investor Relations and Chief Strategy Officer. And Karen Caddick will join the company as our Chief Human Resources Officer. And finally, Steve Yendell, who is beside me and who only joined the business three days ago, has joined us as our Chief Financial Officer. And with that, I'll pass across to Steve to both introduce himself and take you through the results in detail. Steve.