AM Best has affirmed the financial strength rating of A- (Excellent) and the long-term Issue Credit Ratings (ICR) of “a-” (Excellent) for the rated operating subsidiaries of (re)insurance provider SiriusPoint.
Additionally, AM Best has also affirmed the long-term issuer credit ratings (ICR) of “bbb-” (Good) of SiriusPoint, which is a non-operating holding company. The outlook of these ratings is stable.
These ratings reflect SirusPoint’s consolidated balance sheet strength — which AM Best assesses very strong — as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.
AM Best says "the ratings of the group’s subsidiaries factor in their strategic importance to SiriusPoint.”
SiriusPoint’s balance sheet strength is underpinned by its risk-adjusted capitalisation, as measured by Best’s capital adequacy ratio. AM Best’s assessment also considers the de-risking of SiriusPoint’s asset-based in 2022, owing to the redemption of US$0.6 billion from part-related investment funds and reinvestment of the proceeds into fixed-income securities.
As a result, cash and fixed-income investments comprised 92 per cent of SiriusPoint’s investment portfolio in 2022, up from 78 per cent in 2021. A partially offsetting rating factor is the group’s somewhat limited capital fungibility due, to a significant portion of consolidated available capital being held as a safety reserve in the group’s Swedish subsidiary.
AM Best expects SiriusPoint to report adequate operating performance over the underwriting cycle. However, recent technical performance has been weak, demonstrated by combined ratios of 120 per cent and 107 per cent (as calculated by AM Best) in 2021 and 2022, respectively.
AM Best also expects underwriting profitability to improve and be more stable as SiriusPoint’s management continues to move the group’s business away from catastrophe-exposed property business towards less volatile accident and health and specialty lines.
The group has a good level of diversification by line of business, which AM best predicts will improve further as it executes its business plan.
SiriusPoint’s subsidiaries include SiriusPoint America Insurance, SiriusPoint Bermuda Insurance, SiriusPoint International Insurance and SiriusPoint Specialty Insurance.
