AM Best Revises Outlooks to Positive for SiriusPoint Ltd. and Its Subsidiaries
AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a-" (Excellent) of the rated operating subsidiaries of SiriusPoint Ltd. (SiriusPoint) (Bermuda) (NYSE:SPNT). Additionally, AM Best has affirmed the Long-Term ICR of "bbb-" (Good) of SiriusPoint, which is a non-operating holding company. (See below for a detailed listing of the companies and Credit Ratings [ratings]).
The ratings reflect SiriusPoint's consolidated balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings of the group's operating subsidiaries factor in their strategic importance to SiriusPoint.
The revision of the outlooks to positive from stable reflects SiriusPoint's improved balance sheet strength fundamentals following actions taken by management including the derisking of the investment portfolio, reduction in catastrophe exposure, and the recent buy-back of shares and warrants previously held by CM Bermuda Ltd. AM Best expects that the group will maintain its risk-adjusted capitalisation comfortably at the strongest level, as measured by Best's Capital Adequacy Ratio (BCAR), supported by prudent capital management, effective underwriting exposure management and positive operating results.
SiriusPoint's balance sheet strength is underpinned by its risk-adjusted capitalisation, which was at the strongest level at year-end 2024, as measured by BCAR. In 2024, the group repurchased all common shares and warrants held by CM Bermuda Ltd. for a price of USD 733 million, which has eliminated all risks associated with the financial difficulties of the former shareholder. In turn, SiriusPoint's reported equity at year-end 2024 decreased to USD 1.9 billion (2023: USD 2.5 billion). Nevertheless, AM Best expects the group will quickly grow its capital base organically through full earnings retention. Furthermore, the balance sheet strength assessment also considers SiriusPoint's actions in recent years to derisk its investment portfolio significantly, which is composed predominantly of cash and high-quality fixed income securities at year-end 2024. A partially offsetting rating factor is the group's limited capital fungibility due to a significant, albeit reducing, portion of consolidated available capital being held as a safety reserve in the group's Sweden subsidiary.
SiriusPoint recorded positive underwriting results in 2023 and 2024. This represents a material improvement against the period prior to 2022, when the group's net combined ratios were consistently above 100%. AM Best expects SiriusPoint's prospective underwriting results to remain profitable with reduced volatility as its management continues to rebalance the business mix away from catastrophe-exposed property business toward less volatile accident and health and specialty lines of business. SiriusPoint reported a robust pre-tax profit of USD 233 million in 2024, benefiting from underwriting earnings, including approximately USD 108 million of reserve releases, and solid investment income, offsetting one-time expenses associated with the share repurchase transaction and the sale of some affiliated strategic investments.
SiriusPoint's neutral business profile assessment reflects its market position as a mid-tier global (re)insurer, which operates from platforms in Europe, the United States, Bermuda and at Lloyd's. The group reported gross written premium of USD 3.2 billion in 2024 and has a good level of diversification by line of business.
The FSR of A- (Excellent) and the Long-Term ICRs of "a-" (Excellent) have been affirmed with the outlooks revised to positive from stable for the following subsidiaries of SiriusPoint Ltd.:
- SiriusPoint America Insurance Company
- SiriusPoint Bermuda Insurance Company Ltd.
- SiriusPoint International Insurance Corporation (publ)
- SiriusPoint Specialty Insurance Corporation
This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper use of Best's Credit Ratings, Best's Performance Assessments, Best's Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best's Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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Todor Kitin, ACA
Senior Financial Analyst
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Jessica Botelho-Young, CA
Director, Analytics
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Associate Director, Public Relations
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Senior Public Relations Specialist
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