Executive Summary / Key Takeaways

• Sustained Underwriting Excellence: SiriusPoint has achieved 11 consecutive quarters of underwriting profit, driven by a core combined ratio of 89.5% in Q2 2025 and a 1.8-point improvement in its attritional loss ratio, demonstrating a successful shift to disciplined, profitable underwriting.
• Strategic Capital Optimization: The company completed a major reshaping in 2024, including significant share repurchases and debt management, returning over $1 billion to investors. This has simplified its structure, enhanced shareholder value, and is expected to meaningfully increase future ROE and EPS.
• Targeted Growth in High-Margin Segments: SPNT is pursuing disciplined premium growth, with Q2 2025 gross written premiums up 10% and net premiums in Insurance & Services growing 15%. This growth is strategically focused on profitable areas like Accident & Health and Other Specialties, with increased retention on maturing MGA partnerships.
• Undervalued Balance Sheet and Strong Liquidity: Management asserts the balance sheet is undervalued, particularly noting significant off-balance sheet value in consolidated MGAs. The company maintains robust capital (Q2 BSCR 223%) and ample liquidity ($682 million HoldCo cash), supported by positive outlook revisions from Fitch and AM Best.
• Outlook for Continued Profitability: SiriusPoint is on track to deliver an underlying ROE within its 12%-15% target range for 2025, with full-year net investment income guided at $265 million-$275 million and a stable expense ratio of 6.5%-7%, signaling confidence in its operational momentum despite market challenges.

The Reshaping of a Specialty Underwriter

SiriusPoint Ltd., incorporated in Bermuda in 2011 as Third Point Reinsurance Ltd., embarked on a transformative journey in February 2021 with the acquisition of Sirius International Insurance Group, Ltd. This pivotal merger, which expanded its global multi-line insurance and reinsurance offerings, also introduced complexity and volatility to its balance sheet. Recognizing these challenges, the company initiated a decisive restructuring in 2022, strategically repositioning its property catastrophe portfolio to reduce exposure and volatility. This move proved highly effective, shifting its catastrophe loss ratio from among the highest to one of the lowest in its peer group by 2023 and 2024, a clear testament to its new, lower-volatility risk appetite.

The period of 2023 and 2024 marked an intensive phase of reshaping and operational refinement. SiriusPoint executed significant loss portfolio transfers (LPTs), including a $1.3 billion reserve transfer in 2023 and a $400 million workers' compensation LPT in 2024, which freed up capital. The deconsolidation of Arcadian Risk Capital Ltd. in June 2024 unlocked $96 million in off-balance sheet capital, further streamlining its structure. A key transaction in Q3 2024 involved the repurchase and retirement of $125 million of CMIG's common stock and the full settlement of Series A preference shares, addressing merger-related uncertainties and reducing future income statement volatility. By the close of 2024, SiriusPoint declared its major reshaping complete, having significantly improved its balance sheet, simplified corporate governance, and returned over $1 billion to investors. This comprehensive overhaul laid the groundwork for a renewed focus on core business performance.

SiriusPoint operates as an "underwriting first" company, aiming for a simplified, fully-integrated, and globally connected business model. Its core strategy centers on applying underwriting talent and expertise to cultivate a profitable book of business and identify value-creating opportunities. The company's approach is nimble and reactive to market dynamics, allocating capital selectively to profitable opportunities while adhering to specified risk tolerances. This disciplined philosophy is foundational to its two primary operating segments: Insurance Services and Reinsurance.

The company's strategic use of data capabilities in the MGA space represents a key technological differentiator. While not a proprietary hardware or chemical process, this investment in advanced data analytics is designed to provide a significant competitive edge in a rapidly evolving distribution channel. By enhancing its data capabilities, SiriusPoint aims to improve risk selection, refine pricing models, and optimize underwriting decisions for its MGA partnerships. This strategic focus on data-driven insights allows the company to "season" MGA relationships, gaining confidence in their profitability and track record before increasing net premium retention. This analytical rigor is crucial for maintaining underwriting discipline and achieving superior risk-adjusted returns, particularly against larger, more diversified competitors who may lack such specialized data-driven agility in niche MGA programs. The broader industry trend of AI-driven data center demand also presents opportunities for specialized insurance needs, which SPNT's data-centric approach could position it to address.

Competitive Landscape and Strategic Positioning

SiriusPoint operates in a competitive global insurance and reinsurance market, contending with major players like AIG (AIG), Chubb Limited (CB), Berkshire Hathaway (BRK.A) (through its insurance operations), and Arch Capital Group (ACGL). These competitors often boast greater scale, broader diversification, and substantial capital resources. For instance, AIG's extensive global network and diversified product portfolio provide resilience, while Chubb's strong underwriting discipline and global distribution network give it an edge in commercial and specialty lines. Berkshire Hathaway's vast capital and long-term investment strategy offer unparalleled financial stability. Arch Capital, a specialty insurer itself, is known for its innovation and risk management in high-return specialty lines.

Against these formidable rivals, SiriusPoint strategically carves out its niche through specialized expertise and an "underwriting first" ethos. Its offerings in segments like aviation, environmental risks, and Accident & Health (A&H) are more targeted, potentially allowing for greater efficiency in risk assessment and pricing compared to the broader operations of its larger peers. The company's MGA distribution strategy is a significant competitive advantage. By focusing on deepening relationships with existing, proven partners and maintaining strict selection criteria (rejecting over 80% of opportunities), SiriusPoint builds a network of high-performing delegated authority businesses. This approach, coupled with profit-sharing arrangements, aligns incentives and fosters underwriting excellence, as evidenced by its "Program Insurer of the Year" award.

While SPNT's smaller scale can be a vulnerability, potentially leading to higher costs per policy compared to larger competitors, its agility and specialized focus allow for faster adaptation to emerging risks and market opportunities. For example, in the hardening Space market, SPNT has seen double-digit price increases due to capacity exits, a trend it is well-positioned to capitalize on. In contrast, the Marine market has seen softening rates, where SPNT's specialized expertise helps navigate these pressures. The company's A&H business is a unique differentiator, acting as a "volatility shock-absorber" and providing a stable source of underwriting profit that diversifies its portfolio against the more cyclical nature of traditional reinsurance. This strategic balance is crucial for delivering consistent returns in a volatile industry.

Financial Momentum and Operational Discipline

The strategic reshaping and underwriting-first focus have translated into robust financial performance. SiriusPoint achieved its 11th consecutive quarter of underwriting profit in Q2 2025, delivering a core combined ratio of 89.5%. This represents a significant 3.8-point improvement year-over-year, driven by strong premium growth and a decrease in catastrophe losses. For the first half of 2025, the core combined ratio stood at 92.4%, a slight improvement despite elevated Q1 catastrophe losses from the California wildfires.

Underlying profitability metrics underscore this success. The company's Q2 2025 underlying return on equity (ROE) reached 17%, surpassing its 12%-15% across-the-cycle target range. Year-to-date, underlying ROE was 15.4%, landing at the upper end of this target, even with first-half aviation losses and the Q1 California wildfires. This consistent performance is a direct result of improved underwriting quality, with the attritional loss ratio showing its sixth consecutive quarter of year-over-year improvement, contributing 1.8 points to the Q2 combined ratio improvement. The first half saw the core attritional combined ratio improve by 2.3 points to 90.9%, reflecting broad improvements across attritional loss, acquisition, and other underwriting expense ratios.

Premium growth remains targeted and disciplined. Gross written premiums increased 10% in Q2 2025, marking the fifth straight quarter of double-digit growth. Net premiums written grew 8% in Q2 and 14% in H1 2025. Notably, net premium growth in the Insurance & Services segment (15% in Q2) outpaced gross premiums, a deliberate strategy to retain more profitable business from maturing MGA partnerships. The Insurance & Services segment saw gross premiums written increase 18% to $1.2 billion in H1 2025, driven by strong growth in A&H, Surety, and international Property & Casualty. Conversely, the Reinsurance segment's gross premiums written increased a modest 2% to $724.5 million in H1 2025, reflecting a cautious approach and reallocation of capital, particularly with a 10% decrease in Casualty premiums.

SiriusPoint's prudent reserving philosophy is evident in its 17th consecutive quarter of favorable prior year loss reserve development. In Q2 2025, this amounted to $13.8 million for the core business and $9 million on a consolidated basis, primarily from Property (catastrophe event releases) and A&H (lower than expected attritional losses). This track record of consistent releases, exceeding the average duration of its insurance liabilities of 3.1 years, highlights robust financial management.

Investment income continues to be a stable contributor. Net investment income for Q2 2025 was $68 million, contributing to $139 million for H1 2025. This is tracking in line with the full-year guidance of $265 million-$275 million, benefiting from a supportive yield environment with reinvestment rates greater than 4.5%. The portfolio remains focused on high-quality, low-volatility fixed income securities, with 79% of the portfolio in fixed income and 97% investment grade, boasting an average AA- rating.

The company's balance sheet is robust, with a Q2 2025 estimated Bermuda Solvency Capital Requirement (BSCR) ratio of 223%, well within its target range. The debt-to-capital ratio fell to 24.4% in Q2 2025, remaining within targets and projected to decrease further throughout the year. SiriusPoint maintains strong liquidity, with $682 million available to the HoldCo after the final $483 million payment for the CM Bermuda share repurchase in Q1 2025. The establishment of a $400 million senior unsecured revolving credit facility in December 2024 further enhances its financial flexibility. These strengths have been recognized by rating agencies, with Fitch and AM Best revising SiriusPoint's outlook to Positive from Stable in March and April 2025, respectively.

Outlook and Risks

SiriusPoint's outlook for 2025 is one of continued profitable growth and operational excellence. The company is on track to deliver an underlying ROE within its 12%-15% across-the-cycle target. Full-year net investment income is guided at $265 million-$275 million, assuming 1-2 Federal Reserve interest rate cuts in the second half of the year. Management anticipates a full-year expense ratio of 6.5%-7%, benefiting from increased earned premiums and operating leverage. Double-digit net premium growth is expected for fiscal year 2025, with the Insurance business projected to grow more than Reinsurance. Attritional loss ratios are expected to remain at lower levels, with potential for further improvement.

Despite this positive outlook, several risks warrant attention. Global economic uncertainty, particularly heightened inflation and the changing tariff landscape, could impact underwriting profitability by increasing loss costs or affecting investment valuations. While SiriusPoint's diversified portfolio offers some mitigation, management remains vigilant, ready to adjust pricing and risk appetite. The casualty market remains challenging due to social inflation, litigation financing, and nuclear verdict pressures, leading SPNT to maintain a cautious stance and reduce exposures in certain lines. Heightened first-half losses in aviation, including a $9 million impact from the Air India crash, highlight ongoing volatility in this segment, with pricing adjustments expected to fully materialize by Q4. Competitive pressures persist in the reinsurance market, especially in catastrophe excess of loss placements, which have seen double-digit rate decreases in non-loss-impacted areas. However, recent catastrophe events are expected to moderate these pressures.

The introduction of a 15% corporate income tax in Bermuda starting in 2025 is expected to increase the effective tax rate to 19%. However, existing deferred tax assets are anticipated to provide cash savings, offsetting some of this impact. The company is also monitoring the longer-term implications of the One Big Beautiful Bill Act (OBBBA) enacted in July 2025.

Conclusion

SiriusPoint has demonstrably completed a profound transformation, evolving from a complex and volatile entity into a disciplined, underwriting-first specialty insurer. The strategic reshaping efforts of 2023 and 2024, culminating in significant capital optimization and a streamlined corporate structure, have laid a robust foundation for sustainable value creation. This is clearly reflected in its 11 consecutive quarters of underwriting profit, a Q2 2025 underlying ROE of 17%, and consistent double-digit premium growth in its core segments.

The company's competitive edge is sharpened by its specialized underwriting expertise, a highly selective MGA distribution strategy, and a commitment to data-driven insights, particularly in its growing Accident & Health and Other Specialties segments. While operating in a landscape dominated by larger, more diversified players, SiriusPoint's agility and focused risk management allow it to capitalize on niche opportunities and maintain underwriting discipline. With a strong balance sheet, ample liquidity, and a clear strategic roadmap, SiriusPoint is well-positioned to continue its trajectory of delivering stable and consistent returns. The market's current valuation, particularly the perceived off-balance sheet value in its consolidated MGAs, suggests a compelling investment thesis for those seeking a specialty insurer with a proven track record of operational excellence and a clear path to enhanced shareholder value.