SiriusPoint's Q3 2025 Earnings Call: Contradictions Emerge on Insurance Loss Ratios, Casualty Strategy, and Tariff Impact

Date of Call: October 31, 2025

Financials Results

• Revenue: Gross written premium: up 26% YOY in Q3; Insurance & Services GWP $562M (up 49% YoY in the quarter); Reinsurance GWP $310M (down 2% YoY); YTD GWP up 16%.
• EPS: Operating net income per share $0.72, up 41% YOY; net income $87M vs $5M in Q3 2024.
• Gross Margin: Core combined ratio 89.1%, broadly in line with prior year; core attritional combined ratio 90.9% for first 9 months, improving 1.8 pts vs prior year.
• Operating Margin: Operating return on equity 17.9% for the quarter; 9-month operating ROE 16.1%, ahead of 12%–15% across-cycle target.

Guidance:

• Net investment income guidance: net interest income expected $265M–$275M for the full year.
• Expense ratio expectation reaffirmed at 6.5%–7% for the full year.
• Expect fourth-quarter premiums to be closer to year-to-date growth (i.e., slower than Q3 surge), subject to market conditions.
• Reaffirmed ROE target of 12%–15% across the cycle.
• Plan to use MGA sale proceeds to redeem $200M preference shares to reduce leverage and financing costs.

Business Commentary:

• Strong Underwriting Performance and Earnings Quality:
• SiriusPoint Ltd. reported a core combined ratio of 89.1%, delivering an 11% increase in underwriting income compared to the previous year.

• This performance was aided by a lack of catastrophic losses and a strong operating return on equity of 17.9%, exceeding the company's across-the-cycle target range of 12% to 15%.

• Premium Growth and Business Expansion:

• Gross premiums written grew by 26% year-over-year in the quarter, marking the sixth consecutive quarter of double-digit growth.

• This growth was driven primarily by the Insurance & Services business, particularly in Accident & Health, Surety, and attritional Property books of business.

• Investment and Financial Stability:

• Net investment income for the first 9 months was $206 million, supported by a high-quality fixed income securities portfolio with a yield in excess of 4.5%.

• The company's strong capital position remained stable with a third-quarter BSCR ratio improvement to 226%, providing ample liquidity and flexibility for strategic investments.

• Disciplined MGA Investment Strategy and Financial Impact:

• SiriusPoint announced agreements to sell its stakes in Armada and Arcadian for a combined total of $389 million, valuing them at around 15x EBITDA.
• Upon closure, this deal is expected to recognize over $200 million of off-balance sheet value in the company's book value, representing a per share increase of approximately $1.75.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted 'strong underwriting performance', core combined ratio of 89.1%, operating ROE of 17.9% (9-month 16.1%) ahead of 12%–15% target, announced MGA sale agreements for $389M proceeds, and noted an S&P outlook upgrade to positive — all signaling constructive execution and outlook.

Q&A:

• Question from Michael Phillips (Oppenheimer & Co. Inc., Research Division): As we think about continued mix shift into A&H, Surety and other growth areas and the attritional accident year loss ratio moving from mid-60s to now teasing low-60s, should we be modeling continued movement toward below 60% as we look forward?
  Response: Management: Do not expect material further movements now; recent improvement mainly reflects portfolio reshaping and mix shift—future changes will be driven by market conditions and underwriting/ROE discipline.

• Question from Michael Phillips (Oppenheimer & Co. Inc., Research Division): Given the significant jump in insurance growth this quarter, were there any anomalies in A&H or Surety that drove the growth, and how should we model premium growth going forward?
  Response: Management: Growth was not anomalous but driven by an expanding pipeline and new relationships; expect Q4 growth to be closer to YTD levels (i.e., slower than Q3), subject to market and underwriting conditions.

Contradiction Point 1

Insurance & Services Attritional Loss Ratio Improvements

It involves the company's expectations and strategy regarding attritional loss ratio improvements in the Insurance & Services segment, which are crucial for understanding the company's underwriting and risk management strategies.

Regarding the attritional loss ratio improvements in the Insurance & Services segment due to a mix shift, could the attritional accident year loss ratio potentially fall below 60% in the future? - Michael Phillips(Oppenheimer & Co. Inc., Research Division)

2025Q3: We've made significant progress reshaping the portfolio, and the current mix shift has contributed to the ratio improvements. While we aim to consistently improve, there may not be substantial changes going forward due to our strategic focus on maintaining a disciplined approach to underwriting and risk management. - Scott Egan(CEO)

How will new programs this year affect gross and net premiums over the next 18 months? - Michael Phillips(Oppenheimer & Company)

2025Q2: We expect new partnerships to boost growth on both gross and net premiums but not linearly. There's a tailwind of profitable growth, especially from our North American franchise, similar to Accident & Health. - James McKinney(CFO)

Contradiction Point 2

Casualty Underwriting Strategy

It highlights the company's approach to underwriting in the casualty segment, which has implications for their risk management and growth strategies.

Was this quarter's insurance growth due to anomalies in A&A or Surety, or strong performance and market conditions? - Michael Phillips(Oppenheimer & Co. Inc., Research Division)

2025Q3: We remain cautious in casualty, especially in commercial auto, where we don't see exciting trends. We're cautious but not against casualty as a whole. - Scott Egan(CEO)

Why write less casualty business despite favorable pricing? - Andrew Andersen (Jefferies)

2025Q2: We are cautious in casualty, especially in commercial auto, where we don't see exciting trends. - Scott Egan(CEO)

Contradiction Point 3

Attritional Loss Ratio Improvement and Future Expectations

It involves differing expectations regarding the future trajectory of attritional loss ratios, which are key performance indicators for insurance companies and impact investor expectations.

Regarding attritional loss ratio improvements in the Insurance & Services segment due to mix shifts, will the attritional accident year loss ratio potentially drop below 60% in the future? - Michael Phillips (Oppenheimer & Co. Inc., Research Division)

2025Q3: While we aim to consistently improve, there may not be substantial changes going forward due to our strategic focus on maintaining a disciplined approach to underwriting and risk management. - Scott Egan(CEO & Director)

Can you comment on the underwriting performance, particularly the combined ratio of 91% in 2024? - Scott Egan

2024Q4: We are now at a level where we believe that we have put the portfolio in position to deliver over 90% combined ratios over time or better. - Scott Egan(Chief Executive Officer)

Contradiction Point 4

A&A Reserve Profile and Development

It involves the company's reserve profile and development in the Accident & Health segment, which affects financial reporting and risk assessment.

Was the insurance growth this quarter driven by anomalies in A&A or Surety, or was it due to strong performance and market conditions? - Michael Phillips(Oppenheimer & Co. Inc., Research Division)

2025Q3: A&A has a 2- to 3-year seasoned book, with a stable track record of releases. We err on the side of caution in current years and let older years season. Casualty trends are 4 to 5 years. - Scott Egan(CEO)

What performance factors trigger retaining more premiums from Insurance & Services partnerships? - Anthony Mottolese (Dowling & Partners)

2025Q2: A&A has a shorter tail, allowing for more confident prior year development. Casualty takes longer, but we remain prudent. - James McKinney(CFO)

Contradiction Point 5

Impact of Tariffs

It highlights potential adjustments in pricing, risk appetite, and book positioning, which could impact operational strategies and financial performance.

Was the significant increase in insurance growth this quarter due to unusual factors in A&A or Surety, or was it driven by strong performance and market conditions? - Michael Phillips (Oppenheimer & Co. Inc., Research Division)

2025Q3: Our focus remains on optimizing and growing returns on capital deployment. The core principle of appropriate returns on capital is crucial, and we'll continue to focus on delivering our target ROE. - James McKinney(CFO)

Can you discuss tariffs' impact on your company and any adjustments you might make in response? - Questioner's Name (Company Name)

2025Q1: We continue to proactively monitor the impact that tariffs may have as the situation evolves. Uncertainty has increased, and we remain alert to any developments. We have a diverse portfolio in terms of risk type and geographies, which helps reduce volatility. While potential impacts from tariffs will vary, our level of diversification serves to reduce any volatility or inflation that could emerge in a single line of business. We are prepared to adjust our pricing, risk appetite, or book positioning if necessary. - Scott Egan(CEO)