SiriusPoint Ltd

Good morning, ladies and gentlemen, and welcome to the Serious Point Limited Second Quarter 2023 Earnings Call. During today's presentation, all parties will be in a listen-only mode. As a reminder, this conference's call is being recorded. I would now like to turn the call over to Dhruv Gallo, Head of Investor Relations and Chief Strategy Officer for Serious Point. Please go ahead.

Thank you, Operator, and good morning, good afternoon to everyone listening. I welcome you to the Serious Point earnings call for the 2023 half-year and second quarter results. Last night, we issued our earnings press release and financial supplement, which are available on our website, www.seriouspt.com. Additionally, a webcast presentation will coincide with today's discussion and is available on our website. With me here today are Scott Egan, our Chief Executive Officer, and Steve Yandel, our Chief Financial Officer. Before we start, I would like to remind you that today's remarks contain forward-looking statements based on management's current expectations. Actual results may differ. Please refer to page two of our investor presentation for additional information and the company's latest public findings. At this time,

I will turn the call over to Scott. Thank you Dhruv and welcome everyone and thank you for joining our half year results call. Our second quarter has been another strong quarter for Sirius Point. We continue to make good progress against our strategic priorities, building on the progress made during the last three quarters. Before we get into the results, I would like to provide some comments on three other areas. Firstly, Bronic Masajada is now serving as chair of the company's board of directors, effective June 2nd, after joining our board as an independent director on May 2nd. Bronic is a proven industry leader with over 30 years of insurance experience, which will further strengthen our board. I'd like to take this opportunity to thank Sharon Ludlow, who joined the board in February 2021 and has been interim chair since May 2022 for her service over the past year. Sharon will continue to serve as a non-executive director and as chair of Sirius Point's Audit Committee. Secondly, and as widely reported at the beginning of Q2, the Sirius Point Board of Directors established a special committee of independent directors to review the proposal made by Mr Daniel Loeb in conjunction with his 13D filing regarding a potential transaction to acquire the company. On May the 12th, Mr Loeb and certain affiliates filed a subsequent 13D with their decision to conclude the exploratory discussions. Ultimately, the committee was unanimous in its belief that its current strategy is the best path to deliver enhanced long-term value for shareholders. Finally, culture is an important element of the series point transformation. I firmly believe our people and how we operate are a key differentiator. As part of making Sirius Point an underwriting first company, we've implemented a new underwriting model with the intention to achieve better results and drive higher performance and growth in each of our focus areas. We've also enhanced our vision, purpose and values as we look to improve employee engagement and behaviours. This is part of creating a high performing organisation. Our people are our most important asset. As we've communicated, management is focused on improving performance and has aligned rewards with shareholder value creation. As I said last quarter, the target bonus will only be paid if the combined ratio for the continuing operations is 95.7%, which is the combined ratio management is targeting in 2023 and is around 10 points better than last year on a like-for-like basis. As of quarter two, we're on track, but recognise there are two more quarters to go. There is no complacency. Moving now to results, I will share some of the key messages from the first half of 2023 before passing across to Steve, who will take you through the details. The key messages are outlined on slide five of our presentation and provide an update on our strong progress across our strategic initiatives. Overall, we are very pleased to report continuing performance improvement in the second quarter and another period of positive capital generation across all parts of our business, underwriting, MGAs and investments. Underwriting income for the first half of the year was strong as we delivered a combined ratio of 84.4% for our core business. This is inclusive of one-off reserve releases linked to our lost portfolio transaction, offset in part by the reallocation of $90 million of expenses to the combined ratio from outside of the underwriting result. Portfolio actions are coming through and we have aggressively cut our PMLs, which are reducing potential volatility in our underwriting results. We did not have any cat losses during the quarter, despite this being an above average cat quarter for the industry. And we expect a reduction in PMLs to help us navigate the hurricane season better than in previous years. PMLs for one in 100 year events are now down around 58% since Q2 2021. and around 10% since the start of 2023 and are supported by both exposure reduction and retro purchase at One One Renewals. At full year 2022, I said to expect greater than $50 million reduction in our cost base by 2024. We are pleased with our progress and are on track to deliver to our stated goal. Today, we have reduced our total cost base by more than 15% year over year as we create globally integrated functions and our total expense ratio, including acquisition costs, is now around 30%. Almost six points improvement on a like for like basis versus last year. Our headline cost savings are around $25 million, but underlying run rate improvement is higher in the range $35 to $40 million when we adjust for one-off items. One-off items for 2023 include restructuring and transaction-related costs of $27 million. We have provided additional details on costs on page eight of our presentation and we'll review the 2024 guidance later in the year, depending on the progress we make in the second half of this year. Our capital light fee income from our five consolidated MGAs gives us diversification and is growing strongly year on year. MGA revenues are up 9% versus last year, whilst the service margin is stable at around 22%. Investment results have been strong this quarter and on a run rate basis in line to meet the top end of our previously communicated full year guidance. The investment portfolio remains focused on high quality fixed income instruments with an average credit rating at AA and we remain well placed to manage market volatility. Our portfolio is performing well and we saw no defaults across the portfolio during the first half of 2023 and we have no exposure to commercial real estate. In summary, all three areas of our business are delivering strong results compared to prior years, and our balance sheet remains strong. We continue to maintain our prudent and conservative approach to reserving, and our book value was flat this quarter, but ex-AOCI it grew by around 3%. Regarding the simplification of our MGA portfolio, we continue to believe that MGA distribution is core to our strategy. We have many strong MGA relationships across the market where we are important capacity providers to them. We have taken steps to reduce our minority equity stakes in many MGAs in line with our focused philosophy for fewer and deeper investments, which we believe will drive better performance. Since quarter one, we've sold another two equity stakes, bringing us down to holding 28 non-consolidated stakes from 31 at year end. As a reminder, we consolidate the results of five MGAs into our results. The book value of our five consolidated MGAs is held in our accounts at $91 million as of June 30th, despite having a net service fee income of $28 million at the half year 2023, which is up 9% from last year. We believe the full value of these MGAs are not reflected in our book value, given their growth profile, earnings generation capability and attractive margins. Onto our balance sheet, which remains strong. Diluted book value per share was broadly unchanged during the quarter at $12.29 and impacted by mark to market on fixed income instruments, some of which has already reversed since the end of the quarter. The lost portfolio transfer closed in June the 30th, which released more than $150 million of capital under the S&P capital model. We also expect the lost portfolio transfer to add over 15 points to the BSCR, which was 219% at Q1 23. Our asset and debt leverage have remained stable, and we are exploring ways to optimize our capital structure. This was an important quarter for us, and I'm very proud of our results. I'm also grateful to my colleagues for the hard work that they continue to put in. These sort of results do not happen by accident. We have achieved a great deal in the past nine months, and more importantly, we think we can still do a lot more. We are on track to deliver against the 2023 and 2024 objectives set at the start of the year, and I look forward to sharing further updates and progress next quarter. With these remarks, I will pass it over across to Steve, who will take you through the financials. Steve.