Segment reporting

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment reporting

5. Segment reporting

The determination of the Company’s business segments is based on the manner in which management monitors the performance of its operations. With recent changes in strategy and the new executive management team following the acquisition of Sirius Group, the Company has determined that it will report on two operating segments: Reinsurance and Insurance & Services. The Company's segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company's chief operating decision maker, the Chief Executive Officer ("CEO") and Chairman of the Company. The CEO assesses segment operating performance, allocates capital, and makes resource allocation decisions based on Segment income (loss). The Company does not manage its assets by segment; accordingly, total assets are not allocated to the segments.

Reinsurance

The Company is a leading global (re)insurer, which offers both treaty and facultative reinsurance worldwide through our network of local branches. The Company participates in the broker market for reinsurance treaties written in the United States and Bermuda primarily on a proportional and excess of loss basis. For the Company’s international business, the book consists of treaty, written on both a proportional and excess of loss basis, facultative, and primary business, primarily in Europe, Asia and Latin America.

The Reinsurance segment provides coverage in the following product lines:

Aviation & Space – Aviation covers loss of or damage to an aircraft and the aircraft operations' liability to passengers, cargo and hull as well as to third parties, and Space covers damage to a satellite during launch and in orbit.

Casualty – covers a cross section of all casualty lines, including general liability, umbrella, auto, workers compensation, professional liability, and other specialty classes.

Contingency – covers event cancellation and non-appearance. The Company offers this class on a treaty reinsurance basis on a selective basis for a few key clients.

Credit & Bond – covers traditional short-term commercial credit insurance, including pre-agreed domestic and export sales of goods and services with typical coverage periods of 60 to 120 days.

Marine & Energy – Marine covers damage to ships and goods in transit, marine liability lines as well as yacht-owner perils. Energy covers offshore energy industry insurance.

Mortgage – covers credit risks that compensates insureds for losses arising from mortgage loan defaults.

Property – consists of the Company’s underwriting lines of business that offer property catastrophe excess reinsurance, agriculture reinsurance and property risk and pro rata on a worldwide basis. Property catastrophe excess of loss reinsurance treaties cover losses from catastrophic events. Agriculture provides stop-loss reinsurance coverage, including to companies writing U.S. government-sponsored multi-peril crop insurance.

Insurance & Services

We provide insurance products to individuals and corporations directly, through agents/brokers or through delegated underwriting agreements with MGAs. We seek to work with MGAs that have strong underwriting expertise, deep understanding of the customer/product niches and/or technology-driven approaches, and a sustainable competitive moat.

Insurance & Services offers a comprehensive set of services for startup MGAs and insurance services companies including fronting services, risk capital and equity and debt financing. Furthermore, we offer expertise in underwriting, pricing and product development to businesses with whom we partner. We have a stringent screening process to identify and approve partner companies which includes alignment of interests, disciplined management and strong oversight, which we believe are critical for success. The Insurance & Services segment predominantly provides insurance coverage in addition to receiving fees for services provided within Insurance & Services and to third parties.

We make both controlling and non-controlling equity investments and debt investments in MGAs and other insurance-related business (collectively, “Strategic Investments”); we reflect the non-controlling investments at fair value.

The Insurance & Services segment provides coverage in the following product lines:

A&H – consists of accident and health coverage, and our MGA units (which include ArmadaCorp Capital, LLC (“Armada”) and International Medical Group, Inc. (“IMG”)). Armada’s products are offered in the United States while IMG offers accident, health and travel products on a worldwide basis.

Environmental – consists of an environmental insurance book in the U.S. comprised of 4 core products that revolve around pollution coverage, which are premises pollution liability, contractor's pollution/pollution liability and professional liability.

Workers' Compensation – consists of state-mandated insurance coverage that provides medical, disability, survivor, burial, and rehabilitation benefits to employees who are injured or killed due to a work-related injury or illness.

Other – consists of a cross section of property and casualty lines, including but not limited to property, general liability, excess liability, commercial auto, professional liability, directors and officers, cyber and other specialty classes.

Management uses segment income (loss) as the primary basis for assessing segment performance. Segment income (loss) is comprised of two components, underwriting income (loss) and net services income (loss). The Company calculates underwriting income (loss) by subtracting loss and loss adjustment expenses incurred, net, acquisition costs, net, and other underwriting expenses from net premiums earned. Net services income (loss) consists of services revenues (fee for service revenues), services expenses, services non-controlling (income) loss and net investment gains (losses) from Strategic Investments at fair value. This definition of segment income (loss) aligns with how business performance is managed and monitored. We continue to evaluate our segments as our business evolves and may further refine our segments and segment income (loss) measures. Certain items are presented in a different manner for segment reporting purposes than in the consolidated statements of income. These items are reconciled to the consolidated presentation in the segment measure reclass column below and include net investment gains (losses) from Strategic Investments at fair value where Insurance & Services holds private equity investments. Also included in Insurance & Services segment income (loss) are services noncontrolling loss (income) attributable to minority shareholders on non-wholly-owned subsidiaries. In addition, services revenues and services expenses are reconciled to other revenues and net corporate and other expenses, respectively.

Segment results are shown prior to corporate eliminations. Corporate eliminations are included in the elimination column below as necessary to reconcile to underwriting income (loss), net services income (loss), and segment income (loss) to the consolidated statements of income.

Corporate includes the results of all runoff business, which represent certain classes of business that we no longer actively underwrite, including those that have asbestos and environmental and other latent liability exposures and certain reinsurance contracts that have interest crediting features. In addition, revenue and expenses managed at the corporate level, including realized gains and losses (excluding net investment gains (losses) from Strategic Investments at fair value, which are allocated to the Segment results), net realized and unrealized investment gains from related party investment funds, other investment income, non services-related other revenues, non services-related net corporate and other expenses, intangible asset amortization, interest expense, foreign exchange (gains) losses and income tax (expense) benefit are reported within Corporate. The Chief Executive Officer does not manage segment results or allocate resources to segments when considering these items and they are therefore excluded from our definition of segment income (loss).

The following is a summary of the Company’s operating segment results for the years ended December 31, 2021, 2020 and 2019:

	2021
	Reinsurance			Insurance & Services			Core			Eliminations (2)		Corporate		Segment Measure Reclass		Total
Gross premiums written	$	1,350.4		$	897.9		$	2,248.3		$	—	$	(11.8)	$	—	$	2,236.5
Net premiums written	1,124.9			652.8			1,777.7			—		(43.5)		—		1,734.2
Net premiums earned	1,210.9			522.8			1,733.7			—		(16.7)		—		1,717.0
Loss and loss adjustment expenses incurred, net	999.6			320.6			1,320.2			(2.6)		8.9		—		1,326.5
Acquisition costs, net	302.7			149.7			452.4			(67.6)		3.0		—		387.8
Other underwriting expenses	105.5			29.2			134.7			—		24.1		—		158.8
Underwriting income (loss)	(196.9)			23.3			(173.6)			70.2		(52.7)		—		(156.1)
Services revenue	—			133.7			133.7			(82.6)		—		(51.1)		—
Services expenses	—			120.5			120.5			—		—		(120.5)		—
Net services fee income	—			13.2			13.2			(82.6)		—		69.4		—
Services noncontrolling loss	—			2.3			2.3			—		—		(2.3)		—
Net investment gains (losses) from Strategic Investments at fair value	0.3			(4.8)			(4.5)			—		—		4.5		—
Net services income	0.3			10.7			11.0			(82.6)		—		71.6		—
Segment income (loss)	(196.6)			34.0			(162.6)			(12.4)		(52.7)		71.6		(156.1)
Net realized and unrealized investment losses												(12.4)		(4.5)		(16.9)
Net realized and unrealized investment gains from related party investment funds												304.0		—		304.0
Other net investment income												25.4		—		25.4
Other revenues												100.1		51.1		151.2
Net corporate and other expenses												(146.1)		(120.5)		(266.6)
Intangible asset amortization												(5.9)		—		(5.9)
Interest expense												(34.0)		—		(34.0)
Foreign exchange gains												44.0		—		44.0
Income (loss) before income tax benefit	$	(196.6)		$	34.0		(162.6)			(12.4)		222.4		(2.3)		45.1
Income tax benefit							—			—		10.7		—		10.7
Net income (loss)							(162.6)			(12.4)		233.1		(2.3)		55.8
Net loss attributable to noncontrolling interests							—			—		—		2.3		2.3
Net income (loss) available to SiriusPoint							$	(162.6)		$	(12.4)	$	233.1	$	—	$	58.1
Underwriting Ratios: (1)
Loss ratio	82.6		%	61.3		%	76.1		%							77.3		%
Acquisition cost ratio	25.0		%	28.6		%	26.1		%							22.6		%
Other underwriting expenses ratio	8.7		%	5.6		%	7.8		%							9.2		%
Combined ratio	116.3		%	95.5		%	110.0		%							109.1		%

(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.

(2)Insurance and Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.

	2020
	Reinsurance			Insurance & Services			Core			Eliminations (2)		Corporate		Segment Measure Reclass		Total
Gross premiums written	$	534.1		$	25.5		$	559.6		$	—	$	28.9	$	—	$	588.5
Net premiums written	497.3			16.0			513.3			—		28.9		—		542.2
Net premiums earned	575.6			7.1			582.7			—		28.1		—		610.8
Loss and loss adjustment expenses incurred, net	459.5			5.9			465.4			—		(0.1)		—		465.3
Acquisition costs, net	160.4			1.4			161.8			(0.1)		25.4		—		187.1
Other underwriting expenses	24.0			0.2			24.2			—		5.9		—		30.1
Underwriting loss	(68.3)			(0.4)			(68.7)			0.1		(3.1)		—		(71.7)
Services revenue	—			1.7			1.7			(1.7)		—		—		—
Services expenses	—			1.0			1.0			—		—		(1.0)		—
Net services fee income	—			0.7			0.7			(1.7)		—		1.0		—
Services noncontrolling income	—			(0.3)			(0.3)			—		—		0.3		—
Net services income	—			0.4			0.4			(1.7)		—		1.3		—
Segment loss	(68.3)			—			(68.3)			(1.6)		(3.1)		1.3		(71.7)
Net realized and unrealized investment gains												69.2		—		69.2
Net realized and unrealized investment gains from related party investment funds												195.0		—		195.0
Other net investment income												14.7		—		14.7
Net corporate and other expenses												(40.9)		(1.0)		(41.9)
Interest expense												(8.2)		—		(8.2)
Foreign exchange losses												(5.2)		—		(5.2)
Income (loss) before income tax expense	$	(68.3)		$	—		(68.3)			(1.6)		221.5		0.3		151.9
Income tax expense							—			—		(8.1)		—		(8.1)
Net income (loss)							(68.3)			(1.6)		213.4		0.3		143.8
Net income attributable to noncontrolling interests							—			—		—		(0.3)		(0.3)
Net income (loss) available to SiriusPoint							$	(68.3)		$	(1.6)	$	213.4	$	—	$	143.5
Underwriting Ratios: (1)
Loss ratio	79.8		%	83.1		%	79.9		%							76.2		%
Acquisition cost ratio	27.9		%	19.7		%	27.8		%							30.6		%
Other underwriting expenses ratio	4.2		%	2.8		%	4.2		%							4.9		%
Combined ratio	111.9		%	105.6		%	111.9		%							111.7		%

(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.

(2)Insurance and Services MGAs recognize fees for service using revenue from contracts with customers accounting standards, whereas insurance companies recognize acquisition expenses using insurance contract accounting standards. While ultimate revenues and expenses recognized will match, there will be recognition timing differences based on the different accounting standards.

	2019
	Reinsurance			Insurance & Services (2)			Core			Corporate		Total
Gross premiums written	$	575.3		$	5.5		$	580.8		$	87.6	$	668.4
Net premiums written	563.9			5.5			569.4			87.6		657.0
Net premiums earned	606.8			4.7			611.5			88.6		700.1
Loss and loss adjustment expenses incurred, net	404.3			3.9			408.2			(4.7)		403.5
Acquisition costs, net	204.2			0.4			204.6			91.0		295.6
Other underwriting expenses	24.9			0.2			25.1			9.1		34.2
Underwriting loss	(26.6)			0.2			(26.4)			(6.8)		(33.2)
Net realized and unrealized investment gains										15.3		15.3
Net realized and unrealized investment gains from related party investment funds										249.6		249.6
Other net investment income										17.6		17.6
Net corporate and other expenses										(36.2)		(36.2)
Interest expense										(8.2)		(8.2)
Foreign exchange gains										(3.6)		(3.6)
Income (loss) before income tax expense	$	(26.6)		$	0.2		(26.4)			227.7		201.3
Income tax expense							—			(0.7)		(0.7)
Net income (loss) available to SiriusPoint							$	(26.4)		$	227.0	$	200.6
Underwriting Ratios: (1)
Loss ratio	66.6		%	83.0		%	66.8		%			57.6		%
Acquisition cost ratio	33.7		%	8.5		%	33.5		%			42.2		%
Other underwriting expenses ratio	4.1		%	4.3		%	4.1		%			4.9		%
Combined ratio	104.4		%	95.8		%	104.4		%			104.7		%

(1)Underwriting ratios are calculated by dividing the related expense by net premiums earned.

(2)There were no Insurance & Services MGAs during the year ended December 31, 2019.

The following tables provide a breakdown of net premiums written by client location and underwriting location by reportable segment for the years ended December 31, 2021, 2020 and 2019:

	2021
	Reinsurance		Insurance & Services		Corporate		Total
Net written premiums by client location:
United States and Canada	$	579.1	$	560.3	$	1.6	$	1,141.0
Europe	309.5		36.4		(45.8)		300.1
Bermuda, the Caribbean and Latin America	114.3		13.7		—		128.0
Asia and Other	122.0		42.4		0.7		165.1
Total net written premiums by client location	$	1,124.9	$	652.8	$	(43.5)	$	1,734.2
Net written premiums by underwriting location:
United States and Canada	$	447.1	$	408.9	$	1.6	$	857.6
Europe	379.8		93.0		(17.5)		455.3
Bermuda, the Caribbean and Latin America	246.1		150.9		(27.9)		369.1
Asia and Other	51.9		—		0.3		52.2
Total net written premiums by underwriting location	$	1,124.9	$	652.8	$	(43.5)	$	1,734.2
	2020
	Reinsurance		Insurance & Services		Corporate		Total
Net written premiums by client location:
United States and Canada	$	300.1	$	13.8	$	—	$	313.9
Europe	83.7		1.9		28.9		114.5
Bermuda, the Caribbean and Latin America	108.6		—		—		108.6
Asia and Other	4.9		0.3		—		5.2
Total net written premiums by client location	$	497.3	$	16.0	$	28.9	$	542.2
Net written premiums by underwriting location:
United States and Canada	$	236.3	$	4.9	$	—	$	241.2
Bermuda, the Caribbean and Latin America	261.0		11.1		28.9		301.0
Total net written premiums by underwriting location	$	497.3	$	16.0	$	28.9	$	542.2
	2019
	Reinsurance		Insurance & Services		Corporate		Total
Net written premiums by client location:
United States and Canada	$	349.3	$	5.3	$	—	$	354.6
Europe	73.9		0.1		87.6		161.6
Bermuda, the Caribbean and Latin America	137.3		—		—		137.3
Asia and Other	3.4		0.1		—		3.5
Total net written premiums by client location	$	563.9	$	5.5	$	87.6	$	657.0
Net written premiums by underwriting location:
United States and Canada	$	267.0	$	5.1	$	—	$	272.1
Bermuda, the Caribbean and Latin America	296.9		0.4		87.6		384.9
Total net written premiums by underwriting location	$	563.9	$	5.5	$	87.6	$	657.0

No contract contributed more than 10% of gross premiums written for the years ended December 31, 2021 and 2020. In the year ended December, 31 2019, the largest contract contributed 14.4% of gross premiums written.