Sirius Group, Q1 2019: Technical profit sustained by property business lines

Sirius Group reported comprehensive income of USD 76 million for the first quarter of 2019 compared to USD 30 million for the first quarter of 2018. Gross written premiums for the quarter were USD 622 million, reflecting an increase of 1%.


Key figures at March 31, 2019

  • Gross written premiums (GWP): USD 622 million (+1.2%, compared to 31 March 2018), of which:
    • GWP Property: USD 331 million (-4.6%)
    • GWP A&H: USD 169 million (+16.3%)
    • GWP Specialty & Casualty: USD 121 million (+4.7%)
    • GWP Other: USD 1.4 million (-81.3%)
  • Net written premiums: USD 485 million (+3.3%)
  • Technical profit: USD 74.1 million (-13.9%)
  • Underwriting income: USD 37.7 million (-23.4%)
  • Combined ratio: 90.6% (+3.7 pp)

Global Property produced USD 33 million of underwriting income for the quarter and a 76% combined ratio, driven mainly by low current year catastrophe losses partially offset by net unfavorable prior year loss reserve development. Global A&H produced USD 12 million of underwriting income for the quarter, including net service fee income from IMG and Armada, and a combined ratio of 101%, which was primarily a result of net unfavorable prior year loss reserve development. Specialty & Casualty produced a USD 3 million underwriting loss for the quarter and a combined ratio of 103%, mainly driven by poor Aviation (Ethiopian Airlines flight crash). Runoff & Other produced USD 5 million of underwriting (loss) for the quarter mainly from unfavorable prior year loss reserve development and operating expenses.

Pre-tax catastrophe losses, net of reinsurance and reinstatement premiums, amounted to USD 2 million in the quarter. Prior year catastrophe losses related to Hurricanes Irma, Michael, and Florence were increased by USD 17 million in the quarter.

The investment portfolio returned 2.0% in original currencies and 1.9% in U.S. Dollars. Net investment income increased USD 9 million or 82% for the first quarter of 2019 to USD 20 million, from USD 11 million for the first quarter of 2018, due to a higher interest rate environment. Net realized and unrealized investment gains were USD 83 million for the first quarter of 2019 compared to net realized and unrealized investment gains of USD 12 million for the first quarter of 2018. The increase was driven by unrealized gains arising from investments consistent with overall market performance, which were somewhat offset by foreign currency translation losses recognized through other comprehensive income of USD 42 million.

Common shareholders' equity ended the first quarter of 2019 at USD 1,773 million as compared to USD 1,705 million at December 31, 2018. The increase is primarily due to comprehensive income of USD 76 million. Adjusted book value ended the first quarter of 2019 at USD 2,014 million.

Sirius Group's combined ratio was 91% for the first quarter of 2019 compared to 87% for the first quarter of 2018. The increase in the combined ratio was driven by higher net unfavorable prior year loss reserve development mainly in the Global Property segment.

Kip OBERTING, President and Chief Executive Officer of Sirius Group, said:

"The first quarter was a strong one from a bottom line perspective, offering up a great start to the year. Our property segment benefited from low catastrophe loss activity and our accident and health operations continue to provide a meaningful return on our capital. Our growth in book value was also driven by gains in our investment portfolio, mainly a result of favorable investment markets. We also benefited from gains in the value of investment assets in our strategic investment portfolio."


Ralph Salamone, Chief Financial Officer, added:

"After taking increases in the fourth quarter of 2018, our Typhoon Jebi reserves have held up well in the first quarter of 2019 and we are seeing rate increases on loss impacted accounts in Japan. We did see loss increases on recent U.S. Hurricanes, namely Irma and Michael, where assignments of benefits seem to be taking their toll. Still, our Global Property segment performed well with USD 33 million of underwriting income and a 76% combined ratio in the quarter."



The full report can be found here:
Sirius Group first quarter 2019 results


Source: PRNewswire, Sirius International Insurance Group Ltd.



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