Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | Sirius International Insurance Group, Ltd. | |
Entity Central Index Key | 0001744894 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 115,262,303 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Fixed maturity investments, trading, at fair value (Amortized cost 2019: $1,814.8; 2018: $1,952.9) | $ 1,846.4 | $ 1,949.2 |
Short-term investments, at fair value (Amortized cost 2019: $830.5; 2018: $716.1) | 833.6 | 715.5 |
Equity securities, trading, at fair value (Cost 2019: $398.4; 2018: $409.4) | 394.4 | 380 |
Other long-term investments, at fair value (Cost 2019: $351.7; 2018: $337.6) | 389.7 | 365 |
Cash | 116 | 119.4 |
Restricted cash | 13 | 12.8 |
Total investments and cash | 3,593.1 | 3,541.9 |
Accrued investment income | 12.7 | 14.1 |
Insurance and reinsurance premiums receivable | 818.7 | 630.6 |
Reinsurance recoverable on unpaid losses | 349.3 | 350.2 |
Reinsurance recoverable on paid losses | 50.5 | 55 |
Funds held by ceding companies | 202.8 | 186.8 |
Ceded unearned insurance and reinsurance premiums | 200.5 | 159.8 |
Deferred acquisition costs | 152.6 | 141.6 |
Deferred tax asset | 171.6 | 202.5 |
Accounts receivable on unsettled investment sales | 1.7 | 5 |
Goodwill | 400.7 | 400.6 |
Intangible assets | 191.7 | 195.6 |
Other assets | 161.1 | 124 |
Total assets | 6,307 | 6,007.7 |
Liabilities | ||
Loss and loss adjustment expense reserves | 1,976.3 | 2,016.7 |
Unearned insurance and reinsurance premiums | 860.5 | 647.2 |
Ceded reinsurance payable | 231.3 | 206.9 |
Funds held under reinsurance treaties | 123.4 | 110.6 |
Deferred tax liability | 230.6 | 237.4 |
Debt | 686.1 | 696.8 |
Accounts payable on unsettled investment purchases | 9.9 | 3.2 |
Other liabilities | 173.1 | 150.5 |
Total liabilities | 4,291.2 | 4,069.3 |
Commitments and contingencies (see Note 18) | ||
Mezzanine equity | ||
Series B preference shares | 240.6 | 232.2 |
Common shareholders' equity | ||
Common shares (shares issued and outstanding, 2019:115,262,303; 2018: 115,151,251) | 1.2 | 1.2 |
Additional paid-in surplus | 1,090.2 | 1,089.1 |
Retained earnings | 911.8 | 816.6 |
Accumulated other comprehensive (loss) | (230.2) | (202.4) |
Total common shareholders' equity | 1,773 | 1,704.5 |
Non-controlling interests | 2.2 | 1.7 |
Total equity | 1,775.2 | 1,706.2 |
Total liabilities, mezzanine equity, and equity | $ 6,307 | $ 6,007.7 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | ||
Fixed maturity investments, trading, at fair value, Amortized cost (in dollars) | $ 1,814.8 | $ 1,952.9 |
Short-term investments, amortized cost (in dollars) | 830.5 | 716.1 |
Equity securities, at cost (in dollars) | 398.4 | 409.4 |
Other long-term investments, at fair value, Cost (in dollars) | $ 351.7 | $ 337.6 |
Shares issued | 115,262,303 | 115,151,251 |
Shares outstanding | 115,262,303 | 115,151,251 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Net earned insurance and reinsurance premiums | $ 311.9 | $ 284.5 |
Net investment income | 20.1 | 10.8 |
Net realized investment gains (losses) | 9 | (3.7) |
Net unrealized investment gains | 74 | 16 |
Net foreign exchange gains (losses) | 5.1 | (3.5) |
Other revenue | 19.6 | 23.4 |
Total revenues | 439.7 | 327.5 |
Expenses | ||
Loss and loss adjustment expenses | 183.9 | 141 |
Insurance and reinsurance acquisition expenses | 63.3 | 63 |
Other underwriting expenses | 35.3 | 43.2 |
General and administrative expenses | 24.4 | 14.3 |
Intangible asset amortization expenses | 3.9 | 3.9 |
Interest expense on debt | 7.6 | 7.7 |
Total expenses | 318.4 | 273.1 |
Pre-tax income | 121.3 | 54.4 |
Income tax (expense) | (17.2) | (11.1) |
Net income | 104.1 | 43.3 |
Less: income attributable to non-controlling interests | (0.4) | (0.2) |
Net income attributable to Sirius Group | 103.7 | 43.1 |
Less: Change in carrying value of Series B preference shares | (8.4) | |
Less: Accrued dividends on Series A redeemable preference shares | (2.6) | |
Net income attributable to Sirius Group's common shareholders | $ 95.3 | $ 40.5 |
Net income per common share and common share equivalent | ||
Basic earnings per common share and common share equivalent | $ 0.75 | $ 0.32 |
Diluted earnings per common share and common share equivalent | $ 0.74 | $ 0.32 |
Weighted average number of common shares and common share equivalents outstanding | ||
Basic weighted average number of common shares and common share equivalents outstanding | 115,182,331 | 120,000,000 |
Diluted weighted average number of common shares and common share equivalents outstanding | 127,335,314 | 120,000,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Comprehensive income | ||
Net income | $ 104.1 | $ 43.3 |
Other comprehensive (loss) | ||
Change in foreign currency translation, net of tax | (27.8) | (13.4) |
Total other comprehensive (loss) | (27.8) | (13.4) |
Comprehensive income | 76.3 | 29.9 |
Net (income) attributable to non-controlling interests | (0.4) | (0.2) |
Comprehensive income attributable to Sirius Group | $ 75.9 | $ 29.7 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Millions | Common shares | Additional paid-in surplus | Retained earnings | Accumulated other comprehensive (loss) | Non-controlling interests | Total |
Accumulated net foreign currency translation (losses) | ||||||
Non-controlling interests | $ 0.2 | |||||
Total common shareholders' equity at Dec. 31, 2017 | $ 1.2 | $ 1,197.9 | $ 858.4 | $ (140.5) | ||
Capital contribution from former parent | 1.4 | |||||
Net income | 43.3 | |||||
Income attributable to non-controlling interests | (0.2) | |||||
Accrued dividends on Series A redeemable preference shares | (2.6) | (2.6) | ||||
Other, net | (0.1) | |||||
Balance at beginning of year at Dec. 31, 2017 | (140.5) | |||||
Accumulated net foreign currency translation (losses) | ||||||
Net change in foreign currency translation | (13.4) | |||||
Balance at end of year at Mar. 31, 2018 | (153.9) | |||||
Total common shareholders' equity at Mar. 31, 2018 | 1,199.3 | 900.4 | (153.9) | 1,947 | ||
Cumulative effect of an accounting change | 1.6 | |||||
Accumulated net foreign currency translation (losses) | ||||||
Non-controlling interests | $ 0.5 | 0.5 | ||||
Total equity | 860 | 1,947.5 | ||||
Non-controlling interests | 1.7 | |||||
Total common shareholders' equity at Dec. 31, 2018 | $ 1.2 | 1,089.1 | 816.6 | (202.4) | 1,704.5 | |
Share-based compensation | 1.2 | |||||
Other, net | (0.1) | |||||
Net income | 104.1 | |||||
Income attributable to non-controlling interests | (0.4) | |||||
Change in carrying value of Series B preference shares | (8.4) | |||||
Other, net | (0.1) | |||||
Balance at beginning of year at Dec. 31, 2018 | (202.4) | |||||
Accumulated net foreign currency translation (losses) | ||||||
Net change in foreign currency translation | (27.8) | |||||
Balance at end of year at Mar. 31, 2019 | (230.2) | |||||
Total common shareholders' equity at Mar. 31, 2019 | $ 1,090.2 | 911.8 | $ (230.2) | 1,773 | ||
Accumulated net foreign currency translation (losses) | ||||||
Non-controlling interests | $ 2.2 | 2.2 | ||||
Total equity | $ 816.6 | $ 1,775.2 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operations: | ||
Net income | $ 104.1 | $ 43.3 |
Adjustments to reconcile net income to net cash provided from operations: | ||
Net realized and unrealized investment gains (losses) | (83) | (12.3) |
Amortization of premium on fixed maturity investments | (0.8) | 4.4 |
Amortization of intangible assets | 3.9 | 3.9 |
Depreciation and other amortization | 2.2 | 2.5 |
Share-based compensation | 1.2 | |
Other operating items: | ||
Net change in loss and loss adjustment expense reserves | (1.1) | (4.2) |
Net change in reinsurance recoverable on paid and unpaid losses | (8.7) | (17.8) |
Net change in funds held by ceding companies | (20.1) | (12.2) |
Net change in unearned insurance and reinsurance premiums | 232.4 | 271.8 |
Net change in ceded reinsurance payable | 37.7 | 47.6 |
Net change in ceded unearned insurance and reinsurance premiums | (47.6) | (71.6) |
Net change in insurance and reinsurance premiums receivable | (208.8) | (192.2) |
Net change in deferred acquisition costs | (14.2) | (31.8) |
Net change in funds held under reinsurance treaties | 15.4 | 10.4 |
Net change in current and deferred income taxes, net | 9.1 | 2.2 |
Net change in other assets and liabilities, net | 2.9 | (21.6) |
Net cash provided from operations | 24.6 | 22.4 |
Cash flows from investing activities: | ||
Net change in short-term investments | (120.1) | (180) |
Sales of fixed maturities and convertible fixed maturity investments | 135.1 | 566.2 |
Maturities, calls, and paydowns of fixed maturity and convertible fixed maturity investments | 59.3 | 24 |
Sales of common equity securities | 45.9 | 111.7 |
Distributions and redemptions of other long-term investments | 15.3 | 52.4 |
Contributions to other long-term investments | (25) | (64.4) |
Purchases of common equity securities | (39.8) | (179.8) |
Purchases of fixed maturities and convertible fixed maturity investments | (105.1) | (486.8) |
Net change in unsettled investment purchases and sales | 10 | 97.2 |
Other, net | 0.3 | (0.9) |
Net cash (used for) investing activities | (24.1) | (60.4) |
Cash flows from financing activities: | ||
Change in collateral held on Interest Rate Cap | (0.1) | |
Capital contribution from former parent | 1.4 | |
Net cash (used for) provided from financing activities | (0.1) | 1.4 |
Effect of exchange rate changes on cash | (3.6) | (2.5) |
Net (decrease) in cash during year | (3.2) | (39.1) |
Cash and restricted cash balance at beginning of year | 132.2 | 230.6 |
Cash and restricted cash balance at end of year | $ 129 | $ 191.5 |
General
General | 3 Months Ended |
Mar. 31, 2019 | |
General | |
General | Note 1. General Sirius International Insurance Group, Ltd. (the “Company”) is a Bermuda exempted company whose principal businesses are conducted through its wholly- and majority-owned insurance subsidiaries (collectively with the Company, “Sirius Group”). Sirius Group provides insurance, reinsurance, and insurance services on a worldwide basis. |
Summary of significant accounti
Summary of significant accounting policies | 3 Months Ended |
Mar. 31, 2019 | |
Summary of significant accounting policies | |
Summary of significant accounting policies | Note 2. Summary of significant accounting policies Basis of presentation The accompanying Unaudited Consolidated Financial Statements at March 31, 2019, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. The accompanying Unaudited Consolidated Financial Statements present the consolidated results of operations, financial condition, and cash flows of the Company and its subsidiaries and those entities in which the Company has control and a majority economic interest as well as those variable interest entities (“VIEs”) that meet the requirements for consolidation. All intercompany transactions have been eliminated in consolidation. These Unaudited Consolidated Financial Statements do not include all disclosures normally included in annual financial statements prepared in accordance with GAAP and should be read in conjunction with the Audited Consolidated Financial Statements and the related notes for the year ended December 31, 2018. The consolidated financial information as of December 31, 2018 included herein has been derived from the Audited Consolidated Financial Statements as of December 31, 2018. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying Unaudited Consolidated Financial Statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. Tabular dollar amounts are in millions, with the exception of share and per share amounts. All amounts are reported in U.S. dollars, except where noted otherwise. Recently adopted changes in accounting principles Leases Effective January 1, 2019, Sirius Group adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Accounting Standards Codification (“ASC”) 842) which requires lessees to recognize lease assets and liabilities on the balance sheet for both operating and financing leases, with the exception of leases with an original term of 12 months or less. Under previous guidance, recognition of lease assets and liabilities was not required for operating leases. The new guidance requires that lease assets and liabilities to be recognized and measured initially based on the present value of the lease payments. Sirius Group adopted the new guidance using the simplified transition option that allows companies to apply the new lease standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Sirius Group also made the following elections: · Sirius Group elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases upon transition. · Sirius Group did not elect the hindsight practical expedient upon transition, for all leases. · Sirius Group elected the short-term lease measurement and recognition exemption, resulting in lease payments being recorded as an expense on a straight-line basis over the lease term. · Sirius Group elected to include both lease and non-lease components as a single component for all leases. · Sirius Group did not elect the land easement practical expedient as it was not applicable. As a result of the adoption of the new guidance, Sirius Group recognized a lease liability of $36.8 million, which represents the present value of our remaining lease payments and a right-of-use asset of $34.4 million as of January 1, 2019. The adoption of this guidance did not materially impact our results of operations or cash flows. Due to the adoption of the standard using the retrospective cumulative-effect adjustment method, there are no changes to our previously reported results prior to January 1, 2019. Lease expense is not expected to change materially as a result of the adoption of the new guidance. (See Note 18.) Premium amortization on callable debt securities Effective January 1, 2019, Sirius Group adopted ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities (ASC 310-20), which changes the amortization period for certain purchased callable debt securities. Under the new guidance, for investments in callable debt securities held at a premium, the premium will be amortized over the period to the earliest call date. The new guidance does not change the amortization period for callable debt securities held at a discount. The adoption of this guidance did not have significant effect on our financial statements. Recent accounting pronouncements Credit losses In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (ASC 326), which establishes new guidance for the recognition of credit losses for financial assets measured at amortized cost. The new guidance, which applies to financial assets that have the contractual right to receive cash, including reinsurance receivables and recoverables, requires reporting entities to estimate the credit losses expected over the life of a credit exposure using historical information, current information and reasonable and supportable forecasts that affect the collectability of the financial asset. The new guidance is effective for annual and interim periods beginning after December 15, 2019. Sirius Group is evaluating the expected impact of this new guidance. |
Significant transactions
Significant transactions | 3 Months Ended |
Mar. 31, 2019 | |
Significant transactions | |
Significant transactions | Note 3. Significant transactions Easterly Acquisition Corp. On November 5, 2018, the Company completed the transactions contemplated by the definitive Agreement and Plan of Merger (“Merger Agreement”). Under the terms of the Merger Agreement, Easterly Acquisition Corp. (“Easterly”) merged with Sirius Acquisitions Holding Company III and became a wholly-owned subsidiary of the Company (the “Merger”). Upon the closing of the Merger, Easterly’s common stock was exchanged for the Company’s common shares at an exchange ratio (the “Exchange Ratio”) calculated as (i) the amount of cash per public share of Easterly common stock in Easterly’s trust account (the “Trust Account”) immediately prior to the closing of the Merger divided by (ii) (x) 1.05 multiplied by (y) Sirius Group’s adjusted diluted book value per common share as of September 30, 2018 (“Sirius Group September 30 Adjusted DBVPS”). Based on the Sirius Group September 30 Adjusted DBVPS, estimated as of September 30, 2018, and funds in the Trust Account on November 5, 2018, the Exchange Ratio was equal to 0.609. Following the Merger, the Company’s common shares are traded on the Nasdaq Global Select Market under the symbol “SG.” Easterly held a special meeting of Easterly stockholders on November 2, 2018 to approve the completion of the transactions contemplated by the Merger Agreement. Easterly Acquisition Sponsor, LLC (the “Sponsor”) and Easterly’s other stockholders approved each of the proposals presented at the special meeting. After the special meeting, but prior to the consummation of the Merger, certain Easterly public stockholders exercised their redemption rights as provided for by Easterly’s charter. In total, out of the Trust Account balance of $149.0 million, there were $109.7 million of redemptions by Easterly public stockholders, which decreased the amount of cash in the Trust Account available for general corporate purposes following the Merger. After the redemption of shares held by Easterly’s public stockholders, there was $39.3 million in the Trust Account. This resulted in the issuance of 2,280,241 common shares to Easterly public stockholders. Pursuant to the letter agreement among Easterly, the Sponsor and the Company (the “Sponsor Letter”), the private placement warrants issued to the Sponsor at the closing of the Merger were cancelled. Pursuant to the Merger Agreement, each issued and outstanding public warrant was converted into a warrant exercisable for Company common shares. The number of Company common shares subject to converted warrants was equal to the number of shares of Easterly common stock subject to each Easterly warrant immediately prior to the closing of the Merger multiplied by the Exchange Ratio, and each converted warrant had an exercise price per Company common share equal to the exercise price per share of Easterly common stock subject to such Easterly warrant immediately prior to the closing of the Merger divided by the Exchange Ratio. This resulted in the issuance of 6,088,535 converted warrants. Sirius Group Private Placement In connection with the closing of the Merger, the Company completed a private placement of Series B preference shares, common shares, and warrants (the “Sirius Group Private Placement”) at a price per share equal to (i) 1.05 multiplied by (ii) the Sirius Group September 30 Adjusted DBVPS, or $17.22447. Investors in the Sirius Group Private Placement included affiliated funds of Gallatin Point Capital, The Carlyle Group, Centerbridge Partners, L.P. and Bain Capital Credit (the "Preference Share Investors"), together with certain employees, directors and “friends & family. The Sirius Group Private Placement raised proceeds of $226.1 million, resulting in the purchase of: · 11,901,670 Series B preference shares with a cost basis of $195.8 million, · 1,225,954 of Common shares with a cost basis of $20.8 million, · 5,418,434 warrants that are exercisable for common shares for a period of five years after the Merger at a strike price equal to 125% of the per share purchase price, or $21.53 with a cost basis of $9.6 million. · Issuance costs of $2.0 million ESPP In connection with the Merger, Sirius Group implemented the Employee Share Purchase Plan (“ESPP”), which provided all employees of Sirius Group with a one-time opportunity to purchase between 100 and 1,000 Company common shares at a price equal to 85% of market value for the first 100 shares and 100% of market value for the next 900 shares. For this purpose, market value of the Company common shares was equal to 1.05 times the Sirius Group September 30 Adjusted DBVPS. Employees had the option of paying for the shares upfront or, in the case of employees who are not executive officers, through a loan that is repaid over a two-year period through payroll deductions. Through the ESPP, 405 employees purchased 149,236 Company common shares prior to the consummation of the Merger, with a cost basis of $2.6 million. Gross proceeds of the cash in the Easterly Trust Account assumed by Sirius Group upon the closing of the Merger, the Sirius Group Private Placement, and the ESPP sum to $268.0 million. Common shares redemption agreement In connection with the Merger, the Company and CM Bermuda Ltd. (“CM Bermuda”), the sole holder of the Company’s common shares prior to the Merger, entered into a redemption agreement, dated November 2, 2018 (the “CM Bermuda Redemption Agreement”), pursuant to which, effective as of the closing of the Merger, the Company redeemed 9,519,280 of the Company’s common shares at a price per share equal to $17.22447 for $164.0 million, which was paid on November 16, 2018. Also in connection with the Merger, on November 16, 2018 the Company completed a post-closing adjustment of $1.6 million that was settled in cash with CM Bermuda based on the reported book value per share of $16.44 as of September 30, 2018, pursuant to the Merger Agreement. Sirius Group incurred certain contractual costs associated with the Merger of $9.0 million and $7.1 million of various legal, advisory, and other consulting costs for the Merger and the Private Placement that were charged to Additional paid-in surplus. Series A preference shares redemption agreement In connection with the Merger, the Company, IMG Acquisition Holdings, LLC (“IMGAH”) and Sirius Acquisitions Holding Company II completed the transactions contemplated by its previously announced redemption agreement and the Company redeemed all of the outstanding Series A redeemable preference shares, which were held by IMGAH, for $95.0 million in cash. Effective as of the completion of the redemption, the parties terminated the registration rights agreement and the shareholder’s agreement between the Company and IMGAH. In addition, the parties agreed that any remaining contingent consideration in respect of the IMG acquisition, will be paid in cash, not in Series A redeemable preference shares as previously contemplated in the agreement in respect of the IMG acquisition. WRM America Indemnity Company, Inc. On August 16, 2018, Sirius Group acquired 100% ownership of WRM America Indemnity Company, Inc. (“WRM America”) from WRM America Indemnity Holding Company, LLC for $16.9 million in cash. WRM America is a New York-domiciled insurer with a run-off book of business mainly comprised of general liability, educator’s legal liability, automobile liability and physical damage, property and excess catastrophe liability. As part of the purchase of WRM America, Sirius Group acquired $3.1 million of indefinite lived intangible assets related to insurance licenses. |
Segment information
Segment information | 3 Months Ended |
Mar. 31, 2019 | |
Segment information | |
Segment information | Note 4. Segment information Sirius Group classifies its business into four reportable segments – Global Property, Global A&H, Specialty & Casualty , and Runoff & Other. The accounting policies of the reportable segments are the same as those used for the preparation of the Company’s consolidated financial statements. The Company’s Global Property, Global A&H, Specialty & Casualty, and Runoff & Other reportable 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”) of the Company. The CEO assesses segment operating performance, allocates capital, and makes resource allocation decisions based on Technical profit (loss), Underwriting profit (loss), and Underwriting profit (loss), including net service fee revenue. Segment results are shown prior to corporate eliminations. Corporate eliminations are shown to reconcile to consolidated Technical profit (loss), consolidated Underwriting profit (loss) and consolidated Underwriting profit (loss), including net service fee revenue. Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets, and, accordingly, investment income is not allocated to each segment. Global Property Global Property consists of Sirius Group’s underwriting lines of business which offer other property insurance and reinsurance, property catastrophe excess reinsurance, and agriculture reinsurance on a worldwide basis: Other Property —Sirius Group participates in the broker market for property reinsurance treaties written on a proportional and excess of loss basis. For Sirius Group’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. In the United States, the book predominantly centers on significant participations on proportional and excess of loss treaties mostly in the excess and surplus lines segment of the market. Property Catastrophe Excess —Property catastrophe excess of loss reinsurance treaties cover losses from catastrophic events. Sirius Group writes a worldwide book with the largest concentration of exposure in Europe and the United States. The U.S. book written in Bermuda has a national account focus supporting principally the lower and/or middle layers of large capacity programs. Additionally, Stockholm writes a U.S. book mainly consisting of select small regional and standard lines carriers. The exposures written in the international book are diversified across many countries, regions, perils and layers. Agriculture —Sirius Group provides stop-loss reinsurance coverage to companies writing U.S. government-sponsored multi-peril crop insurance (“MPCI”). Sirius Group’s participation is net of the government’s stop-loss reinsurance protection. Sirius Group also provides coverage for crop-hail and certain named perils when bundled with MPCI business. Sirius Group also writes agriculture business outside of the United States. Global A&H The Global A&H operating segment consists of Sirius Group’s insurance, reinsurance, and managing general underwriting (“MGU”) units (which include Armada and IMG) that offer accident and health products on a worldwide basis: Accident and Health insurance and reinsurance —Sirius Group is an insurer of accident and health insurance business in the United States, either on an admitted or surplus lines basis, as well as international business written through wholly-owned IMG. Armada business is written on an admitted basis. Sirius Group also writes proportional and excess reinsurance treaties covering employer medical stop-loss for per person (specific) and per employer (aggregate) exposures. In addition, Sirius Group writes some medical, health, travel and personal accident coverages written on a treaty, facultative and primary basis. Specialty & Casualty Specialty & Casualty consists of Sirius Group’s insurance and reinsurance underwriting units which offer specialty & casualty product lines on a worldwide basis. Specialty lines represent unique risks where the more difficult and unusual risks are underwritten. Because specialty lines tend to be the more unusual or higher risks, much of the market is characterized by a high degree of specialization: Aviation & Space provides aviation insurance that covers loss of or damage to an aircraft and the aircraft operations’ liability to passengers, cargo and hull as well as to third parties. Additionally, liability arising out of non-aircraft operations such as hangars, airports and aircraft products can be covered. Space insurance primarily covers loss of or damage to a satellite during launch and in orbit. The book consists of treaty, written on both a proportional and excess of loss basis, facultative, and primary business. Marine provides marine reinsurance, primarily written on an excess of loss and proportional basis. Coverage offered includes damage to ships and goods in transit, marine liability lines, and offshore energy industry insurance. Sirius Group also writes yacht business, both on reinsurance and a primary basis. The marine portfolio is diversified across many countries and regions. Trade Credit writes credit and bond reinsurance worldwide. The bulk of the business is traditional short-term commercial credit insurance, covering pre-agreed domestic and export sales of goods and services with typical coverage periods of 60 to 120 days. Losses under these policies are correlated to adverse changes in a respective country’s gross national product. Contingency underwrites contingency insurance for event cancellation and non-appearance, primarily on a primary policy and facultative reinsurance basis. Additionally, coverage for liabilities arising from contractual bonus, prize redemption and over-redemption is also offered. The contingency portfolio is diversified across many countries and regions. Casualty underwrites a cross section of all casualty lines, including general liability, umbrella, auto, workers compensation, professional liability, and other specialty classes, written on a proportional, excess of loss, and primary basis. Surety underwrites commercial surety bonds, including non-construction contract bonds, in a broad range of business segments in the United States. Environmental underwrites a pure environmental insurance book in the United States consisting of four core products that revolve around pollution coverage, which are premises pollution liability, contractor’s pollution liability, contractor’s pollution and professional liability. Runoff & Other Runoff & Other consists of asbestos risks, environmental risks and other long-tailed liability exposures, and underwriting results from Sirius Global Solutions Holding Company (“Sirius Global Solutions”) and its subsidiaries. Sirius Global Solutions is a Connecticut-based division of Sirius Group specializing in the acquisition and management of runoff liabilities for insurance and reinsurance companies, both in the United States and internationally. The following tables summarize the segment results for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, 2019 Global Global Specialty & Runoff & Corporate (Millions) Property A&H Casualty Other Elimination Total Gross written premiums $ 330.7 $ 169.3 $ 120.9 $ 1.4 $ — $ 622.3 Net written premiums $ 241.3 $ 134.9 $ 108.2 $ 0.4 $ — $ 484.8 Net earned insurance and reinsurance premiums $ 139.7 $ 96.1 $ 75.7 $ 0.4 $ — $ 311.9 Loss and allocated LAE (1) (62.6) (63.2) (47.6) (1.1) — (174.5) Insurance and reinsurance acquisition expenses (25.8) (26.6) (20.5) (0.7) 10.3 (63.3) Technical profit (loss) 51.3 6.3 7.6 (1.4) 10.3 74.1 Unallocated LAE (2) (2.1) (1.5) (1.9) (0.5) (3.4) (9.4) Other underwriting expenses (16.2) (6.1) (8.2) (2.1) (2.7) (35.3) Underwriting (loss) income 33.0 (1.3) (2.5) (4.0) 4.2 29.4 Service fee revenue (3) — 36.3 — — (11.0) 25.3 Managing general underwriter unallocated LAE (4) — (4.1) — — 4.1 — Managing general underwriter other underwriting expenses (5) — (2.7) — — 2.7 — General and administrative expenses, MGU + Runoff & Other (6) — (16.2) — (0.8) — (17.0) Underwriting (loss) income, including net service fee income 33.0 12.0 (2.5) (4.8) — 37.7 Net investment income 20.1 Net realized investment gains (losses) 9.0 Net unrealized investment gains 74.0 Net foreign exchange gains (losses) 5.1 Other revenue (7) (5.7) General and administrative expenses (8) (7.4) Intangible asset amortization expenses (3.9) Interest expense on debt (7.6) Pre-tax income $ 121.3 Underwriting Ratios Loss ratio 46.3 % 67.3 % 65.4 % NM NM 59.0 % Acquisition expense ratio 18.5 % 27.7 % 27.1 % NM NM 20.3 % Other underwriting expense ratio 11.6 % 6.3 % 10.8 % NM NM 11.3 % Combined ratio (9) 76.4 % 101.3 % 103.3 % NM NM 90.6 % Goodwill and intangible assets (10) $ — $ 584.2 $ — $ 8.1 $ — $ 592.3 (1) Loss and allocated loss adjustment expenses (“LAE”) are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income). (2) Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income). (3) Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income). (4) Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other. (5) Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process. (6) General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income). (7) Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11 ) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income). (8) General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income). (9) Ratios considered not meaningful (“NM”) to Runoff & Other and Corporate Elimination. (10) Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets. For the three months ended March 31, 2018 Global Global Specialty & Runoff & Corporate (Millions) Property A&H Casualty Other Elimination Total Gross written premiums $ 346.6 $ 145.6 $ 115.5 $ 7.5 $ — $ 615.2 Net written premiums $ 247.2 $ 115.5 $ 100.6 $ 6.1 $ — $ 469.4 Net earned insurance and reinsurance premiums $ 136.1 $ 88.0 $ 54.4 $ 6.0 $ — $ 284.5 Loss and allocated LAE (1) (70.4) (45.8) (21.6) 2.4 — (135.4) Insurance and reinsurance acquisition expenses (29.3) (29.2) (14.1) (0.7) 10.3 (63.0) Technical profit 36.4 13.0 18.7 7.7 10.3 86.1 Unallocated LAE (2) (1.9) (1.6) (1.2) (0.9) — (5.6) Other underwriting expenses (17.4) (8.0) (8.0) (1.4) (8.4) (43.2) Underwriting income 17.1 3.4 9.5 5.4 1.9 37.3 Service fee revenue (3) — 32.8 — — (10.3) 22.5 Managing general underwriter unallocated LAE (4) — — — — — — Managing general underwriter other underwriting expenses (5) — (8.4) — — 8.4 — General and administrative expenses, MGU + Runoff & Other (6) — (9.5) — (1.1) — (10.6) Underwriting income (loss), including net service fee income 17.1 18.3 9.5 4.3 — 49.2 Net investment income 10.8 Net realized investment gains (losses) (3.7) Net unrealized investment gains 16.0 Net foreign exchange gains (losses) (3.5) Other revenue (7) 0.9 General and administrative expenses (8) (3.7) Intangible asset amortization expenses (3.9) Interest expense on debt (7.7) Pre-tax income $ 54.4 Underwriting Ratios Loss ratio 53.1 % 53.9 % 41.9 % NM NM 49.6 % Acquisition expense ratio 21.5 % 33.2 % 25.9 % NM NM 22.1 % Other underwriting expense ratio 12.8 % 9.1 % 14.7 % NM NM 15.2 % Combined ratio (9) 87.4 % 96.2 % 82.5 % NM NM 86.9 % Goodwill and intangible assets (10) $ — $ 608.6 $ — $ 5.0 $ — $ 613.6 (1) Loss and allocated loss adjustment expenses (“LAE”) are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income). (2) Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income). (3) Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income). (4) Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other. (5) Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process. (6) General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income). (7) Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11 ) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income). (8) General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income). (9) Ratios considered not meaningful (“NM”) to Runoff & Other and Corporate Elimination. (10) Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets. The following tables provide summary information regarding net premiums written by client location and underwriting location by reportable segment for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, 2019 Global Global Specialty & Runoff & (Millions) Property A&H Casualty Other Total Net written premiums by client location: United States $ 61.9 $ 111.1 $ 68.4 $ 0.2 $ 241.6 Europe 124.8 8.0 24.8 0.1 157.7 Canada, the Caribbean, Bermuda and Latin America 24.5 5.0 4.4 - 33.9 Asia and Other 30.1 10.8 10.6 0.1 51.6 Total net written premium by client location $ 241.3 $ 134.9 $ 108.2 $ 0.4 $ 484.8 Net written premiums by underwriting location: United States $ 8.0 $ 40.3 $ 12.4 $ 0.2 $ 60.9 Europe 154.6 63.6 54.6 0.1 272.9 Canada, the Caribbean, Bermuda and Latin America 62.4 30.7 40.2 — 133.3 Asia and Other 16.3 0.3 1.0 0.1 17.7 Total written premiums by underwriting location $ 241.3 $ 134.9 $ 108.2 $ 0.4 $ 484.8 For the three months ended March 31, 2018 Global Global Specialty & Runoff & (Millions) Property A&H Casualty Other Total Net written premiums by client location: United States $ 87.0 $ 87.5 $ 37.3 $ 6.1 $ 217.9 Europe 106.3 11.6 50.3 — 168.2 Canada, the Caribbean, Bermuda and Latin America 23.2 4.8 2.6 — 30.6 Asia and Other 30.7 11.6 10.4 — 52.7 Total net written premium by client location $ 247.2 $ 115.5 $ 100.6 $ 6.1 $ 469.4 Net written premiums by underwriting location: United States $ 5.3 $ 21.0 $ (0.1) $ 6.1 $ 32.3 Europe 136.5 68.6 72.0 — 277.1 Canada, the Caribbean, Bermuda and Latin America 89.8 25.7 27.5 — 143.0 Asia and Other 15.6 0.2 1.2 — 17.0 Total written premiums by underwriting location $ 247.2 $ 115.5 $ 100.6 $ 6.1 $ 469.4 |
Reserves for unpaid losses and
Reserves for unpaid losses and loss adjustment expenses | 3 Months Ended |
Mar. 31, 2019 | |
Reserves for unpaid losses and loss adjustment expenses | |
Reserves for unpaid losses and loss adjustment expenses | Note 5. Reserves for unpaid losses and loss adjustment expenses The following table summarizes the loss and LAE reserve activities of Sirius Group for the three months ended March 31, 2019 and 2018: Three Months Ended March 31, (Millions) 2019 2018 Gross beginning balance $ 2,016.7 $ 1,898.5 Less beginning reinsurance recoverable on unpaid losses (350.2) (319.7) Net loss and LAE reserve balance 1,666.5 1,578.8 Losses and LAE incurred relating to: Current year losses 167.3 143.5 Prior years losses 16.6 (2.5) Total net incurred losses and LAE 183.9 141.0 Foreign currency translation adjustment to net loss and LAE reserves (3.4) 6.7 Loss and LAE paid relating to: Current year losses 36.2 31.3 Prior years losses 183.8 147.1 Total loss and LAE payments 220.0 178.4 Net ending balance 1,627.0 1,548.1 Plus ending reinsurance recoverable on unpaid losses 349.3 327.8 Gross ending balance $ 1,976.3 $ 1,875.9 Loss and LAE development - Three Months Ended March 31, 2019 For the three months ended March 31, 2019, Sirius Group had net unfavorable loss reserve development of $16.6 million. The most significant increases in loss reserve estimates were recorded in Global Property ($11.6 million) and Global A&H ($5.1 million). The unfavorable loss reserve development in Global Property was primarily attributable to higher than expected reporting from prior year catastrophe events ($15.6 million) mainly Hurricanes Irma, Michael, and Florence. Unfavorable loss reserve development in Runoff & Other ($1.2 million) was more than offset by favorable loss reserve development in Specialty & Casualty ($1.3 million). Loss and LAE development - Three Months Ended March 31, 2018 For the three months ended March 31, 2018, Sirius Group had net favorable loss reserve development of $2.5 million. The major reductions in loss reserve estimates were recorded in Runoff & Other ($8.9 million),Specialty & Casualty ($7.1 million), and Global A&H ($3.7 million). Favorable loss reserve development for Runoff & Other included reduction in World Trade Center claims in response to revised information received by the Company. These reductions were partially offset by increases in Global Property loss reserve development of $17.2 million resulting from higher than expected reporting from recent accident years, including $6.4 million of increases from natural catastrophes, including the 2017 North American natural catastrophes. Also, in Other Property, there was loss deterioration from recent accident years reported in client account statements received in the first quarter, which accounted for the remainder of Global Property unfavorable loss development in the first quarter 2018. |
Third party reinsurance
Third party reinsurance | 3 Months Ended |
Mar. 31, 2019 | |
Third party reinsurance | |
Third party reinsurance | Note 6. Third party reinsurance In the normal course of business, Sirius Group seeks to protect its businesses from losses due to concentration of risk and losses arising from catastrophic events by reinsuring with third-party reinsurers. Sirius Group remains liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts. At March 31, 2019, Sirius Group had reinsurance recoverables on paid losses of $50.5 million and reinsurance recoverables of $349.3 million on unpaid losses. At December 31, 2018, Sirius Group had reinsurance recoverables on paid losses of $55.0 million and reinsurance recoverables of $350.2 million on unpaid losses. Because retrocessional reinsurance contracts do not relieve Sirius Group of its obligation to its insureds, the collectability of balances due from Sirius Group’s reinsurers is important to its financial strength. Sirius Group monitors the financial strength and ratings of retrocessionaires on an ongoing basis. Uncollectible amounts historically have not been significant. |
Investment securities
Investment securities | 3 Months Ended |
Mar. 31, 2019 | |
Investment securities | |
Investment securities | Note 7. Investment securities Sirius Group’s invested assets consist of investment securities and other long-term investments held for general investment purposes. The portfolio of investment securities includes fixed maturity investments, short-term investments, equity securities, and other long-term investments, which are all classified as trading securities. Realized and unrealized investment gains and losses on trading securities are reported in pre-tax revenues. Net investment income Sirius Group’s net investment income is comprised primarily of interest income along with associated amortization of premium and accretion of discount on Sirius Group’s fixed maturity investments, dividend income from its equity investments, and interest income from its short-term investments. Net investment income for the three months ended March 31, 2019 and 2018 consisted of the following: For the three months ended March 31, (Millions) 2019 2018 Fixed maturity investments $ 16.8 $ 9.9 Short-term investments 0.4 0.8 Equity securities 2.7 1.2 Other long-term investments 3.9 1.2 Total investment income 23.8 13.1 Investment expenses (3.7) (2.3) Net investment income $ 20.1 $ 10.8 Net realized investment gains (losses) and unrealized investment gains Net realized investment gains (losses) and unrealized investment gains for the three months ended March 31, 2019 and 2018 consisted of the following: For the three months ended March 31, (Millions) 2019 2018 Gross realized gains $ 14.1 $ 8.4 Gross realized (losses) (5.1) (12.1) Net realized gains (losses) on investments (1) 9.0 (3.7) Net unrealized gains on investments (2) 74.0 16.0 Net realized and unrealized investment gains on investments $ 83.0 $ 12.3 (1) Includes $10.9 and $(1.1) of realized gains (losses) due to foreign currency during 2019 and 2018, respectively. (2) Includes $25.0 and $18.9 of unrealized gains due to foreign currency during 2019 and 2018, respectively. Net realized investment gains (losses) Net realized investment gains (losses) for the three months ended March 31, 2019 and 2018 consisted of the following: For the three months ended March 31, (Millions) 2019 2018 Fixed maturity investments $ 6.8 $ (2.8) Short-term investments 0.1 — Equity securities (0.6) (1.5) Other long-term investments 3.3 0.6 Derivative instruments (1) (0.6) — Net realized investment gains (losses) $ 9.0 $ (3.7) (1) See Note 11. Net unrealized investment gains Net unrealized investment gains for the three months ended March 31, 2019 and 2018 consisted of the following: For the three months ended March 31, (Millions) 2019 2018 Fixed maturity investments $ 29.7 $ 3.0 Short-term investments 2.7 — Equity securities 25.1 6.4 Other long-term investments 17.1 6.6 Derivative instruments (1) (0.6) — Net unrealized investment gains $ 74.0 $ 16.0 (1) See Note 11. The following table summarizes the amount of total gains included in earnings attributable to unrealized investment gains for Level 3 investments for the three months ended March 31, 2019 and 2018: For the three months ended March 31, (Millions) 2019 2018 Other long-term investments $ 8.8 $ 0.4 Total unrealized investment gains - Level 3 investments $ 8.8 $ 0.4 Investment holdings Fixed maturity investments The cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses), and fair value of Sirius Group’s fixed maturity investments as of March 31, 2019 and December 31, 2018, were as follows: March 31, 2019 Net foreign Cost or Gross Gross currency amortized unrealized unrealized gains Fair (Millions) cost gains losses (losses) value Corporate debt securities $ 614.6 $ 3.0 $ (2.7) $ 13.2 $ 628.1 Asset-backed securities 476.7 0.3 (3.9) 3.8 476.9 Residential mortgage-backed securities 415.1 5.2 (3.9) 9.4 425.8 U.S. government and government agency 151.9 0.3 (0.2) 6.4 158.4 Commercial mortgage-backed securities 113.6 0.4 (1.6) 1.2 113.6 Non-U.S. government and government agency 37.8 — (0.1) 0.8 38.5 Preferred stocks 2.5 0.1 — (0.1) 2.5 U.S. States, municipalities and political subdivision 2.6 — — — 2.6 Total fixed maturity investments $ 1,814.8 $ 9.3 $ (12.4) $ 34.7 $ 1,846.4 December 31, 2018 Net foreign Cost or Gross Gross currency amortized unrealized unrealized gains Fair (Millions) cost gains losses (losses) value Corporate debt securities $ 694.1 $ 1.4 $ (7.3) $ 7.6 $ 695.8 Asset-backed securities 496.3 0.1 (3.8) 1.9 494.5 Residential mortgage-backed securities 413.0 1.7 (7.1) 5.9 413.5 U.S. government and government agency 163.9 0.3 (0.5) 4.2 167.9 Commercial mortgage-backed securities 117.7 0.2 (2.7) 0.7 115.9 Non-U.S. government and government agency 50.6 — (0.2) (0.1) 50.3 Preferred stocks 14.5 0.6 (6.8) 0.2 8.5 U.S. States, municipalities and political subdivision 2.8 — — — 2.8 Total fixed maturity investments $ 1,952.9 $ 4.3 $ (28.4) $ 20.4 $ 1,949.2 The weighted average duration of Sirius Group’s fixed income portfolio as of March 31, 2019 was approximately 1.6 years, including short-term investments, and approximately 2.2 years excluding short-term investments. The cost or amortized cost and fair value of Sirius Group’s fixed maturity investments as of March 31, 2019 and December 31, 2018 are presented below by contractual maturity. Actual maturities could differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties. March 31, 2019 December 31, 2018 Cost or Fair Cost or Fair (Millions) amortized cost value amortized cost value Due in one year or less $ 241.7 $ 250.0 $ 249.6 $ 254.6 Due after one year through five years 554.3 566.8 635.6 636.4 Due after five years through ten years 10.9 10.8 26.2 25.7 Due after ten years — — 0.1 0.1 Mortgage-backed and asset-backed securities 1,005.4 1,016.3 1,026.9 1,023.9 Preferred stocks 2.5 2.5 14.5 8.5 Total $ 1,814.8 $ 1,846.4 $ 1,952.9 $ 1,949.2 The following table summarizes the ratings and fair value of fixed maturity investments held in Sirius Group’s investment portfolio as of March 31, 2019 and December 31, 2018: (Millions) March 31, 2019 December 31, 2018 AAA $ 575.6 $ 602.0 AA 799.8 818.0 A 254.2 290.5 BBB 154.4 167.4 Other 62.4 71.3 Total fixed maturity investments (1) $ 1,846.4 $ 1,949.2 (1) Credit ratings are assigned based on the following hierarchy: 1) Standard & Poor's (“S&P”) and 2) Moody's Investors Service (“Moody’s”). At March 31, 2019, the above totals included $37.6 million of sub-prime securities. Of this total, $12.7 million was rated AAA, $11.5 million rated AA, $4.4 million rated A, $4.1 million rated BBB and $4.9 million classified as Other. At December 31, 2018, the above totals included $42.6 million of sub-prime securities. Of this total, $17.1 million was rated AAA, $9.8 million rated AA, $6.0 million rated A, $4.7 million rated BBB and $5.0 million classified as Other. Equity securities and Other long-term investments The cost or amortized cost, gross unrealized investment gains and losses, net foreign currency gains and losses, and fair values of Sirius Group’s equity securities and other long-term investments as of March 31, 2019 and December 31, 2018, were as follows: March 31, 2019 Cost or Gross Gross Net foreign amortized unrealized unrealized currency Fair (Millions) cost gains losses gains value Equity securities $ 398.4 $ 26.2 $ (38.7) $ 8.5 $ 394.4 Other long-term investments $ 351.7 $ 48.3 $ (20.5) $ 10.2 $ 389.7 December 31, 2018 Cost or Gross Gross Net foreign amortized unrealized unrealized currency Fair (Millions) cost gains losses gains value Equity securities $ 409.4 $ 17.8 $ (50.8) $ 3.6 $ 380.0 Other long-term investments $ 337.6 $ 32.6 $ (13.5) $ 8.3 $ 365.0 Other long-term investments at fair value consisted of the following as at March 31, 2019 and December 31, 2018: (Millions) March 31, 2019 December 31, 2018 Hedge funds and private equity funds $ 301.7 $ 301.4 Limited liability companies and private equity securities 88.0 63.6 Total other long-term investments $ 389.7 $ 365.0 Hedge Funds and Private Equity Funds Sirius Group holds investments in hedge funds and private equity funds, which are included in other long-term investments. The fair value of these investments has been estimated using the net asset value of the funds. As of March 31, 2019, Sirius Group held investments in 9 hedge funds and 28 private equity funds. The largest investment in a single fund was $50.8 million as of March 31, 2019 and $54.8 million as of December 31, 2018. T he following table summarizes investments in hedge funds and private equity interests by investment objective and sector as of March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 Unfunded Unfunded (Millions) Fair Value Commitments Fair Value Commitments Hedge funds: Long/short multi-sector $ 49.5 $ — $ 41.0 $ — Distressed mortgage credit 50.8 — 54.8 — Private Credit 20.3 — 20.0 — Other 2.5 — 2.5 — Total hedge funds 123.1 — 118.3 — Private equity funds: Energy infrastructure & services 87.5 30.7 93.7 54.2 Multi-sector 9.2 0.7 9.0 0.7 Healthcare 31.7 15.6 31.7 15.6 Life settlement 23.9 — 23.7 — Manufacturing/Industrial 23.6 3.1 23.6 10.4 Private equity secondaries 1.1 1.1 1.1 1.1 Real estate 0.3 — 0.3 — Other 1.3 2.0 — — Total private equity funds 178.6 53.2 183.1 82.0 Total hedge and private equity funds included in other long-term investments $ 301.7 $ 53.2 $ 301.4 $ 82.0 Redemption of investments in certain hedge funds is subject to restrictions including lock-up periods where no redemptions or withdrawals are allowed, restrictions on redemption frequency, and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period. The following summarizes the March 31, 2019 fair value of hedge funds subject to restrictions on redemption frequency and advance notice period requirements for investments in active hedge funds: Notice Period Redemption Frequency 30-59 days 60-89 days 90-119 days 120+ days (Millions) notice notice notice notice Total Monthly $ — $ 32.7 $ — $ — $ 32.7 Quarterly 0.8 — — — 0.8 Semi-annual — 0.8 — — 0.8 Annual — 16.9 51.6 20.3 88.8 Total $ 0.8 $ 50.4 $ 51.6 $ 20.3 $ 123.1 Certain of the hedge fund and private equity fund investments in which Sirius Group is invested are no longer active and are in the process of disposing of their underlying investments. Distributions from such funds are remitted to investors as the fund’s underlying investments are liquidated. As of March 31, 2019, no distributions were outstanding from these investments. Investments in private equity funds are generally subject to a “lock-up” period during which investors may not request a redemption. Distributions prior to the expected termination date of the fund may be limited to dividends or proceeds arising from the liquidation of the fund’s underlying investments. In addition, certain private equity funds provide an option to extend the lock-up period at either the sole discretion of the fund manager or upon agreement between the fund and the investors. As of March 31, 2019, investments in private equity funds were subject to lock-up periods as follows: (Millions) 1 - 3 years 3 – 5 years 5 – 10 years Total Private Equity Funds – expected lock-up period remaining $ 12.6 $ 4.3 $ 161.7 $ 178.6 Investments held on deposit or as collateral As of March 31, 2019 and December 31, 2018 investments of $764.9 million and $792.4 million, respectively, were held in trusts required to be maintained in relation to various reinsurance agreements. Sirius Group’s reinsurance operations are required to maintain deposits with certain insurance regulatory agencies in order to maintain their insurance licenses. The fair value of such deposits that are included within total investments totaled $779.5 million and $801.2 million as of March 31, 2019 and December 31, 2018, respectively. As of March 31, 2019, Sirius Group held $0.2 million of collateral in the form of short-term investments associated with Interest Rate Cap agreements. (See Note 11 .) Unsettled investment purchases and sales As of March 31, 2019 and December 31, 2018, Sirius Group reported $9.9 million and $3.2 million, respectively, in Accounts payable on unsettled investment purchases. As of March 31, 2019 and December 31, 2018, Sirius Group reported $1.7 million and $5.0 million, respectively, in Accounts receivable on unsettled investment sales. |
Fair value measurements
Fair value measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair value measurements | |
Fair value measurements | Note 8. Fair value measurements Fair value measurements are categorized into a hierarchy that distinguishes between inputs based on market data from independent sources (“observable inputs”) and a reporting entity's internal assumptions based upon the best information available when external market data is limited or unavailable (“unobservable inputs”). Quoted prices in active markets for identical assets or liabilities have the highest priority (“Level 1”), followed by observable inputs other than quoted prices, including prices for similar but not identical assets or liabilities (“Level 2”), and unobservable inputs, including the reporting entity's estimates of the assumptions that market participants would use, having the lowest priority (“Level 3”). The availability of observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety factors including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment. Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This may lead the Company to change the selection of the valuation technique (for example, from market to cash flow approach) or to use multiple valuation techniques to estimate the fair value of a financial instrument. These circumstances could cause an instrument to be reclassified between levels within the fair value hierarchy. Investments valued using Level 1 inputs include fixed maturity investments, primarily investments in U.S. Treasuries Bills and Notes, equity securities, and short-term investments. Investments valued using Level 2 inputs are primarily comprised of fixed maturity investments, which have been disaggregated into classes, including U.S. government and government agency, corporate debt securities, mortgage-backed and asset-backed securities, non-U.S. government and government agency, U.S. state and municipalities and political sub division and preferred stocks. Investments valued using Level 2 inputs also include certain exchange-traded funds that track U.S. stock indices such as the S&P 500 but are traded on foreign exchanges. Fair value estimates for investments that trade infrequently and have few or no observable market prices are classified as Level 3 measurements. Sirius Group determines when transfers between levels have occurred as of the beginning of the period. Valuation techniques Sirius Group uses outside pricing services to assist in determining fair values for its investments. For investments in active markets, Sirius Group uses the quoted market prices provided by outside pricing services to determine fair value. The outside pricing services Sirius Group uses have indicated that they will only provide prices where observable inputs are available. In circumstances where quoted market prices are unavailable or are not considered reasonable, Sirius Group estimates the fair value using industry standard pricing models and observable inputs such as benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, prepayment speeds, reference data including research publications, and other relevant inputs. Given that many fixed maturity investments do not trade on a daily basis, the outside pricing services evaluate a wide range of fixed maturity investments by regularly drawing parallels from recent trades and quotes of comparable securities with similar features. The characteristics used to identify comparable fixed maturity investments vary by asset type and take into account market convention. The valuation process above is generally applicable to all of Sirius Group’s fixed maturity investments. The techniques and inputs specific to asset classes within Sirius Group’s fixed maturity investments for Level 2 securities that use observable inputs are as follows: U.S. government and government agency U.S. government and government agency securities consist primarily of debt securities issued by the U.S. Treasury and mortgage pass-through agencies such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. Fixed maturity investments included in U.S. government and government agency securities are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources and integrate other observations from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The fair value of each security is individually computed using analytical models that incorporate option-adjusted spreads and other daily interest rate data. Non-U.S. government and government agency Non-U.S. government and government agency securities consist of debt securities issued by non-U.S. governments and their agencies along with supranational organizations (also known as sovereign debt securities). Securities held in these sectors are primarily priced by pricing services that employ proprietary discounted cash flow models to value the securities. Key quantitative inputs for these models are daily observed benchmark curves for treasury, swap, and high issuance credits. The pricing services then apply a credit spread for each security, which is developed by in-depth and real-time market analysis. For securities in which trade volume is low, the pricing services utilize data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets. Corporate debt securities Corporate debt securities consist primarily of investment-grade debt of a wide variety of U.S. and non-U.S. corporate issuers and industries. The corporate fixed maturity investments are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources regarding the issuer of the security and obtain credit data, as well as other observations, from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features that may influence risk. Mortgage-backed and asset-backed securities The fair value of mortgage and asset-backed securities is primarily priced by pricing services using a pricing model that utilizes information from market sources and leveraging similar securities. Key inputs include benchmark yields, reported trades, underlying tranche cash flow data and collateral performance, plus new issue data, as well as broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including issuer, vintage, loan type, collateral attributes, prepayment speeds, default rates, recovery rates, cash flow stress testing, credit quality ratings, and market research publications. U.S. states, municipalities and political subdivisions The U.S. states, municipalities and political subdivisions portfolio contains debt securities issued by U.S. domiciled state and municipal entities. These securities are generally priced by independent pricing services using the techniques described for U.S. government and government agency securities described above. Preferred stocks The fair value of preferred stocks is generally priced by independent pricing services using an evaluated pricing model that calculates the appropriate spread over a comparable security for each issue. Key inputs include exchange prices (underlying and common stock of the same issuer), benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including sector, coupon, credit quality ratings, duration, credit enhancements, early redemption features, and market research publications. Level 3 investments Level 3 valuations are generated from techniques that use assumptions not observable in the market. These unobservable assumptions reflect Sirius Group’s assumptions about what market participants would use in valuing the investment. Generally, certain securities may start out as Level 3 when they are originally issued but, as observable inputs become available in the market, they may be reclassified to Level 2. Sirius Group employs a number of procedures to assess the reasonableness of the fair value measurements for its other long-term investments, including obtaining and reviewing the audited annual financial statements of hedge funds and private equity funds and periodically discussing each fund’s pricing with the fund manager. However, since the fund managers do not provide sufficient information to evaluate the pricing inputs and methods for each underlying investment, the inputs are considered to be unobservable. The fair values of Sirius Group’s investments in private equity securities and private debt instruments have been classified as Level 3 measurements. They are carried at fair value and are initially valued based on transaction price. Their valuation is subsequently estimated based on available evidence such as a market transaction in similar instruments and other financial information for the issuer. Investments measured using net asset value The fair value of Sirius Group’s investments in hedge funds and private equity funds has been determined using net asset value (“NAV”). The hedge fund’s administrator provides quarterly updates of fair value in the form of Sirius Group’s proportional interest in the underlying fund’s NAV, which is deemed to approximate fair value, generally with a three month delay in valuation. The fair value of investment in hedge funds is measured using the NAV practical expedient and therefore has been not categorized within the fair value hierarchy. The private equity funds provide quarterly or semi-annual partnership capital statements with a three or six month delay which are used as a basis for valuation. These private equity investments vary in investment strategies and are not actively traded in any open markets. Due to a lag in reporting, some of the fund managers, fund administrators, or both, are unable to provide final fund valuations as of the Company’s reporting date. In these circumstances, Sirius Group estimates the return of the current period and uses all credible information available. This includes utilizing preliminary estimates reported by its fund managers and using other information that is available to Sirius Group with respect to the underlying investments, as necessary. Fair value measurements by level The following tables summarize Sirius Group’s financial assets and liabilities measured at fair value as of March 31, 2019 and December 31, 2018 by level: March 31, 2019 Fair Level 1 Level 2 Level 3 (Millions) Value Inputs Inputs Inputs Assets measured at fair value Fixed maturity investments: U.S. Government and government agency $ 158.4 $ 157.0 $ 1.4 $ — Corporate debt securities 628.1 — 628.1 — Residential mortgage-backed securities 425.8 — 425.8 — Asset-backed securities 476.9 — 476.9 — Commercial mortgage-backed securities 113.6 — 113.6 — Non-U.S. government and government agency 38.5 33.9 4.6 — Preferred stocks 2.5 — 2.5 — U.S. States, municipalities, and political subdivision 2.6 — 2.6 — Total fixed maturity investments 1,846.4 190.9 1,655.5 — Short-term investments 833.6 792.5 41.1 — Equity securities 394.4 393.5 0.9 — Other long-term investments(1) 88.0 — — 88.0 Total investments $ 3,162.4 $ 1,376.9 $ 1,697.5 $ 88.0 Derivative instruments 0.8 0.5 — 0.3 Total assets measured at fair value $ 3,163.2 $ 1,377.4 $ 1,697.5 $ 88.3 Liabilities measured at fair value Contingent consideration liabilities $ 28.8 $ — $ — $ 28.8 Derivative instruments 5.3 0.2 — 5.1 Total liabilities measured at fair value $ 34.1 $ 0.2 $ — $ 33.9 (1) Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient. December 31, 2018 Fair Level 1 Level 2 Level 3 (Millions) Value inputs inputs inputs Assets measured at fair value Fixed maturity investments: U.S. Government and government agency $ 167.9 $ 164.7 $ 3.2 $ — Corporate debt securities 695.8 — 695.8 — Asset-backed securities 494.5 — 494.5 — Residential mortgage-backed securities 413.5 — 413.5 — Commercial mortgage-backed securities 115.9 — 115.9 — Non-U.S. government and government agency 50.3 42.9 7.4 — Preferred stocks 8.5 — 3.1 5.4 U.S. States, municipalities, and political subdivision 2.8 — 2.8 — Total fixed maturity investments 1,949.2 207.6 1,736.2 5.4 Short-term investments 715.5 679.3 36.2 — Equity securities 380.0 380.0 — — Other long-term investments(1) 63.6 — — 63.6 Total investments $ 3,108.3 $ 1,266.9 $ 1,772.4 $ 69.0 Derivative instruments 4.1 — — 4.1 Total assets measured at fair value $ 3,112.4 $ 1,266.9 $ 1,772.4 $ 73.1 Liabilities measured at fair value Contingent consideration liabilities $ 28.8 $ — $ — $ 28.8 Derivative instruments 5.1 0.5 — 4.6 Total liabilities measured at fair value $ 33.9 $ 0.5 $ — $ 33.4 (1) Excludes fair value of $301.4 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient. Rollforward of Level 3 fair value measurements The following tables present changes in Level 3 for financial instruments measured at fair value for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, 2019 Derivative Other instruments Contingent Fixed long-term assets & consideration (Millions) Maturities investments (1) (liabilities) (liabilities) Balance at January 1, 2018 $ 5.4 $ 63.6 $ (0.5) $ (28.8) Total realized and unrealized gains — 9.3 (5.1) — Foreign currency losses through Other Comprehensive Income — (0.7) — — Purchases — 15.8 — — Sales/Settlements (5.4) — 0.8 — Balance at March 31, 2019 $ — $ 88.0 $ (4.8) $ (28.8) (1) Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient. For the Three Months Ended March 31, 2018 Derivative Other instruments Contingent Fixed long-term assets & consideration (Millions) Maturities investments (1) (liabilities) (liabilities) Balance at January 1, 2018 $ 8.0 $ 64.2 $ (6.1) $ (42.8) Total realized and unrealized gains — 0.8 — — Foreign currency losses through Other Comprehensive Income — (0.3) — — Purchases 0.6 0.4 — — Sales/Settlements — (0.2) — — Balance at March 31, 2018 $ 8.6 $ 64.9 $ (6.1) $ (42.8) (1) Excludes fair value of $221.9 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient. Fair value measurements – transfers between levels There were no transfers between Level 3 and Level 2 measurements during the three months ended March 31, 2019 and 2018. Significant unobservable inputs The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments as of March 31, 2019 and December 31, 2018, and includes only those instruments for which information about the inputs is reasonably available to Sirius Group, such as data from independent third-party valuation service providers and from internal valuation models. (Millions, except share prices) March 31, 2019 Description Valuation Technique(s) Fair Value Unobservable Input Private equity securities (1) Share price of recent transaction $ 32.5 Purchase share price $ 40.63 Preferred stock (1) Share price of recent transaction $ 17.5 Purchase price $ 7.74 Private equity securities (1) Multiple of GAAP book value $ 16.8 Book value multiple 1.0X Private debt instrument (1) Purchase price of recent transaction $ 7.8 Purchase price $ 9.0 Private debt instrument (1) Purchase price of recent transaction $ 6.0 Purchase price $ 6.0 Private equity securities (1) Share price of recent transaction $ 5.1 Purchase price $ 7.74 Private equity securities (1) Purchase price of recent transaction $ 1.0 Purchase price $ 10.0 Private equity securities (1) Purchase price of recent transaction $ 0.8 Purchase price $ 0.8 Private equity securities (1) Purchase price of recent transaction $ 0.3 Purchase price $ 0.3 Private debt instrument (1) Purchase price of recent transaction $ 0.2 Purchase price $ 0.2 Currency forwards (2) Third party appraisal $ 0.2 Broker quote $ 0.2 Interest rate cap (2) Third party appraisal $ 0.1 Broker quote $ 0.1 Weather derivatives (2) Third party appraisal $ (1.3) Broker quote $ (1.3) Currency swaps (2) Third party appraisal $ (3.8) Broker quote $ (3.8) Contingent consideration External valuation model $ (28.8) Discounted future payments $ (28.8) (1) As of March 31, 2019, each asset type consists of one security . (2) See Note 11 for discussion of derivative instruments . (Millions) December 31, 2018 Description Valuation technique(s) Fair value Unobservable input Private equity securities (1) Share price of recent transaction $ 32.5 Purchase share price $ 40.63 Private equity securities (1) Multiple of GAAP book value $ 14.7 Book value multiple 0.9X Private debt instrument (1) Purchase price of recent transaction $ 9.0 Purchase price $ 9.0 Private debt instrument (1) Purchase price of recent transaction $ 6.0 Purchase price $ 6.0 Preferred stock (1) Share price of recent transaction $ 4.6 Purchase price $ 1.88 Weather derivatives (2) Third party appraisal $ 3.9 Broker quote $ 3.9 Private equity securities (1) Purchase price of recent transaction $ 0.9 Purchase price $ 1.88 Preferred stock (1) Share price of recent transaction $ 0.8 Purchase price $ 0.8 Private equity securities (1) Share price of recent transaction $ 0.3 Purchase price $ 10.0 Private debt instrument (1) Purchase price of recent transaction $ 0.2 Purchase price $ 0.2 Interest rate cap (2) Third party appraisal $ 0.2 Broker quote $ 0.2 Currency swaps (2) Third party appraisal $ (4.6) Broker quote $ (4.6) Contingent consideration External valuation model $ (28.8) Discounted future payments $ (28.8) (1) As of December 31, 2018, each asset type consists of one security . (2) See Note 11 for discussion of derivative instruments . Financial instruments disclosed, but not carried at fair value Sirius Group uses various financial instruments in the normal course of its business. The carrying values of Cash, Accrued investment income, certain other assets, Accounts payable on unsettled investment purchases, certain other liabilities, and other financial instruments not included in the table below approximated their fair values at March 31, 2019 and December 31, 2018, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 3. The following table includes financial instruments for which the carrying value differs from the estimated fair values at March 31, 2019 and December 31, 2018: March 31, 2019 December 31, 2018 (Millions) Fair Value (1) Carrying Value Fair Value (1) Carrying Value Liabilities, Mezzanine equity, and Non-controlling interest: 2017 SEK Subordinated Notes $ 297.0 $ 292.7 $ 309.5 $ 303.6 2016 SIG Senior Notes $ 361.7 $ 393.4 $ 347.6 $ 393.2 Series B preference shares $ 200.2 $ 240.6 $ 191.7 $ 232.2 (1) Fair value estimated by internal pricing and considered a Level 3 measurement. |
Debt and standby letters of cre
Debt and standby letters of credit facilities | 3 Months Ended |
Mar. 31, 2019 | |
Debt and standby letters of credit facilities | |
Debt and standby letters of credit facilities | Note 9. Debt and standby letters of credit facilities Sirius Group’s debt outstanding as of March 31, 2019 and December 31, 2018 consisted of the following: March 31, Effective December 31, Effective (Millions) Rate (1) Rate (1) 2017 SEK Subordinated Notes, at face value $ 296.6 3.7 % $ 307.6 3.8 % Unamortized issuance costs (3.9) (4.0) 2017 SEK Subordinated Notes, carrying value 292.7 303.6 2016 SIG Senior Notes, at face value 400.0 4.7 % 400.0 4.7 % Unamortized discount (2.5) (2.6) Unamortized issuance costs (4.1) (4.2) 2016 SIG Senior Notes, carrying value 393.4 393.2 Total debt $ 686.1 $ 696.8 (1) Effective rate considers the effect of the debt issuance costs . 2017 SEK Subordinated Notes On September 22, 2017, Sirius Group issued floating rate callable subordinated notes denominated in Swedish kronor (“SEK”) in the amount of SEK 2,750.0 million (or $346.1 million on date of issuance) at a 100% issue price (“2017 SEK Subordinated Notes”). The 2017 SEK Subordinated Notes were issued in an offering that was exempt from the registration requirements of the Securities Act of 1933 (the “Securities Act”). The 2017 SEK Subordinated Notes bear interest on their principal amount at a floating rate equal to the applicable Stockholm Interbank Offered Rate (“STIBOR”) for the relevant interest period plus an applicable margin, payable quarterly in arrears on March 22, June 22, September 22, and December 22 in each year commencing on December 22, 2017, until maturity in September 2047. Beginning on September 22, 2022, the 2017 SEK Subordinated Notes may be redeemed, in whole or in part, at Sirius Group’s option. In addition, within 90 days following the occurrence of a Specified Event (as defined below), the 2017 SEK Subordinated Notes may be redeemed, in whole but not in part, at Sirius Group’s option. “Specified Event” means (a) an “Additional Amounts Event” in connection with a change in laws, rules or regulations as a result of which Sirius Group is obligated to pay additional amounts on the notes in respect of any withholding or deduction for taxes, (b) a “Tax Event” in connection with a change in laws, rules or regulations as a result of which interest on the notes is no longer fully deductible by Sirius Group for income tax purposes in the applicable jurisdiction (to the extent that such interest was so deductible as of the time of such Tax Event), (c) a “Rating Methodology Event” in connection with a change in, or clarification to, the rating methodology of Standard & Poor’s or Fitch that results in a materially unfavorable capital treatment of the notes, or (d) a “Regulatory Event” in connection with a change in, or clarification to, applicable supervisory regulations that results in the notes no longer qualifying as Tier 2 Capital. Sirius Group incurred $4.6 million in expenses related to the issuance of the 2017 SEK Subordinated Notes (including SEK 27.5 million, or $3.5 million, in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2017 SEK Subordinated Notes. For the three months ended March 31, 2019 and 2018, Sirius Group recognized $11.0 million and $5.8 million, respectively, of foreign currency exchange gains on the remeasurement of the 2017 SEK Subordinated Notes into U.S. dollars (“USD”) from SEK. Taking into effect the amortization of all underwriting and issuance expenses, and applicable STIBOR, the 2017 SEK Subordinated Notes yield an annualized effective rate of approximately 3.7% and 3.5% for the three months ended March 31, 2019 and 2018, respectively. Sirius Group recorded $2.8 million and $2.9 million of interest expense, inclusive of amortization of issuance costs on the 2017 SEK Subordinated Notes for the three months ended March 31, 2019 and 2018, respectively. 2016 SIG Senior Notes On November 1, 2016, Sirius Group issued $400.0 million face value of senior unsecured notes (“2016 SIG Senior Notes”) at an issue price of 99.209% for net proceeds of $392.4 million after taking into effect both deferrable and non-deferrable issuance costs. The 2016 SIG Senior Notes were issued in an offering that was exempt from the registration requirements of the Securities Act. The 2016 SIG Senior Notes bear an annual interest rate of 4.6%, payable semi-annually in arrears on May 1, and November 1, in each year commencing on May 1, 2017, until maturity in November 2026. Sirius Group incurred $5.1 million in expenses related to the issuance of the 2016 SIG Senior Notes (including $3.4 million in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2016 SIG Senior Notes. Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the 2016 SIG Senior Notes yield an effective rate of approximately 4.7% per annum. Sirius Group recorded $4.8 million, inclusive of amortization of issuance costs on the 2016 SIG Senior Notes, for both of the three month periods ended March 31, 2019 and 2018, respectively. Standby letter of credit facilities On November 9, 2018, Sirius International renewed two standby letter of credit facility agreements totaling $160 million to provide capital support for Lloyd's Syndicate 1945. The first letter of credit is a renewal of a $125 million facility with Nordea Bank Finland Abp, London Branch, which is issued on an unsecured basis. The second letter of credit is a $35 million facility with DNB Bank ASA, Sweden Branch, $25 million of which is issued on an unsecured basis. Each facility is renewable annually. The above referenced facilities are subject to various affirmative, negative and financial covenants that the Company considers to be customary for such borrowings, including certain minimum net worth, maximum debt to capitalization standards , and change in control provisions. Sirius International has other secured letter of credit and trust arrangements with various financial institutions to support its insurance operations. As of March 31, 2019 and December 31, 2018, these secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust of SEK 2.7 billion and SEK 2.9 billion, respectively, or $296.0 million and $321.3 million , respectively (based on the March 31, 2019 and December 31, 2018 SEK to USD exchange rates). As of March 31, 2019 and December 31, 2018, Sirius America Insurance Company’s trust arrangements were collateralized by pledged assets and assets in trust of $56.7 million and $56.2 million, respectively. As of March 31, 2019 and December 31, 2018, Sirius Bermuda’s trust arrangements were collateralized by pledged assets and assets in trust of $347.2 million and $319.7 million, respectively. Revolving credit facility In February 2018, Sirius Group, through its indirectly wholly-owned subsidiary Sirius International Group, Ltd. entered into a three-year, $300 million senior unsecured revolving credit facility (the "Facility"). The Facility provides access to loans for working capital and general corporate purposes, and letters of credit to support obligations under insurance and reinsurance agreements and retrocessional agreements. The Facility is subject to various affirmative, negative and financial covenants that Sirius Group considers to be customary for such borrowings, including certain minimum net worth, maximum debt to capitalization, financial strength rating standards , and change in control provisions. As of March 31, 2019, there were no outstanding borrowings under the Facility. Debt and standby letter of credit facility covenants As of March 31, 2019, Sirius Group was in compliance with all of the covenants under the 2017 SEK Subordinated Notes, the 2016 SIG Senior Notes, the Nordea Bank Finland Abp, London Branch facility, and the DNB Bank ASA, Sweden Branch facility. In addition, as of March 31, 2019, Sirius Group was in compliance with all of the covenants under the Facility. Interest Total interest expense incurred by Sirius Group for its indebtedness for the three months ended March 31, 2019 and 2018 was $7.6 million and $7.7 million, respectively. Total interest paid by Sirius Group for its indebtedness for the three months ended March 31, 2019 and 2018 was $2.7 million and $2.9 million, respectively. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income taxes | |
Income taxes | Note 10. Income taxes The Company and its Bermuda-domiciled subsidiaries are not subject to Bermuda income tax under current Bermuda law. In the event there is a change in the current law such that taxes are imposed, the Company and its Bermuda-domiciled subsidiaries would be exempt from such tax until March 31, 2035, pursuant to the Bermuda Exempted Undertakings Tax Protection Act of 1966. The Company has subsidiaries and branches that operate in various other jurisdictions around the world that are subject to tax in the jurisdictions in which they operate. The jurisdictions in which the Company’s subsidiaries and branches are subject to tax are Australia, Belgium, Canada, Denmark, Germany, Gibraltar, Hong Kong (China), Luxembourg, Malaysia, the Netherlands, Shanghai (China), Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States. Sirius Group reported an income tax expense of $17.2 million and $11.1 million during the three months ended March 31, 2019 and 2018, respectively, on pre-tax income of $121.3 and $54.4 million, respectively. The effective tax rate for the three months of 2019 was 14.2%, which was lower than the Swedish statutory rate of 21.4% (the rate at which the majority of Sirius Group’s worldwide operations are taxed) primarily because of income recognized in jurisdictions with lower rates than Sweden. The effective tax rate for the three months ended March 31, 2018 was 20.3%, which was lower than the Swedish statutory rate of 22% primarily because of income recognized in jurisdictions with lower rates than Sweden and non-recurring adjustments to Sirius Group’s deferred tax assets which resulted from various internal restructurings. In arriving at the effective tax rate for the three months ended March 31, 2019 and 2018, Sirius Group forecasted all income and expense items including the change in unrealized investment gains (losses) and realized investment gains (losses) for the years ending December 31, 2019 and 2018. The Tax Cuts and Jobs Act (the “TCJA”) was enacted into law in the U.S. in December 2017. The Company previously applied Staff Accounting Bulletin 118 (“SAB 118”), which provided guidance on accounting for the tax effects of the TCJA. SAB 118 addresses situations where accounting for certain income tax effects of the TCJA under ASC 740, Income Taxes (“ASC 740”), may be incomplete upon issuance of an entity’s financial statements and provides a one-year measurement period from the enactment date to complete the accounting under ASC 740. The Company has completed its accounting for all material tax effects of the TCJA and recognized adjustments as of December 31, 2018. The TCJA includes a new Base Erosion and Anti-Abuse Minimum Tax (“BEAT”) provision, which is essentially a minimum tax that is potentially applicable to certain otherwise deductible payments made by U.S. entities to non-U.S. affiliates, including cross-border interest payments and reinsurance premiums. The statutory BEAT rate is 10% in 2019-2025, and then rises to 12.5% in 2026 and thereafter. The TCJA also includes provisions for Global Intangible Low-Taxed Income (“GILTI”) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries. Consistent with accounting guidance, Sirius Group will treat BEAT as an in period tax charge when incurred in future periods for which no deferred taxes need to be provided and has made an accounting policy election to treat GILTI taxes in a similar manner. No provision for income taxes related to BEAT or GILTI was recorded as of March 31, 2019 and December 31, 2018. Sirius Group has capital and liquidity in many of its subsidiaries, some of which may reflect undistributed earnings. If such capital or liquidity were to be paid or distributed to the Company or Sirius Group’s subsidiaries, as dividends or otherwise, they may be subject to income or withholding taxes. Sirius Group generally intends to operate, and manage its capital and liquidity, in a tax-efficient manner. However, the applicable tax laws in relevant countries are still evolving, including in response to guidance from the Organisation for Economic Cooperation and Development. Accordingly, such payments or earnings may be subject to income or withholding tax in jurisdictions where they are not currently taxed or at higher rates of tax than currently taxed, and the applicable tax authorities could attempt to apply income or withholding tax to past earnings or payments. Deferred tax asset, net of valuation allowance Sirius Group’s net deferred tax liability, net of the valuation allowance as of March 31, 2019 was $59.0 million. Of the $59.0 million, $33.1 million relates to net deferred tax assets in U.S. subsidiaries, $131.5 million relates to net deferred tax assets in Luxembourg subsidiaries, $11.5 million relates to net deferred tax assets in United Kingdom subsidiaries, $230.6 million relates to net deferred tax liabilities in Sweden subsidiaries, and $4.5 million relates to other net deferred tax liabilities. Sirius Group records a valuation allowance against deferred tax assets if it becomes more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in income tax expense in the period of change. In determining whether or not a valuation allowance, or change therein, is warranted, Sirius Group considers factors such as prior earnings history, expected future earnings, carryback and carryforward periods and strategies that if executed would result in the realization of a deferred tax asset. It is possible that certain planning strategies or projected earnings in certain subsidiaries may not be feasible to utilize the entire deferred tax asset, which could result in material changes to Sirius Group’s deferred tax assets and tax expense. Uncertain tax positions Recognition of the benefit of a given tax position is based upon whether a company determines that it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. In evaluating the more likely than not recognition threshold, Sirius Group must presume that the tax position will be subject to examination by a taxing authority with full knowledge of all relevant information. If the recognition threshold is met, then the tax position is measured at the largest amount of benefit that is more than 50% likely of being realized upon ultimate settlement. As of March 31, 2019, the total reserve for unrecognized tax benefits is $63.3 million. If Sirius Group determines in the future that its reserves for unrecognized tax benefits on permanent differences and interest and penalties are not needed, the reversal of $63.2 million of such reserves as of March 31, 2019 would be recorded as an income tax benefit and would impact the effective tax rate. If Sirius Group determines in the future that its reserves for unrecognized tax benefits on temporary differences are not needed, the reversal of $0.1 million of such reserves as of March 31, 2019 would not impact the effective tax rate due to deferred tax accounting but would accelerate the payment of cash to the taxing authority. Most of Sirius Group’s reserves for unrecognized tax benefits on permanent differences relate to interest deductions denied by the Swedish Tax Authority (“STA”), as described further below. The Swedish Tax Authority ("STA") has denied deductions claimed by two of the Company's Swedish subsidiaries in certain tax years for interest paid on intra-group debt instruments. Sirius Group has challenged the STA's denial in court based on the technical merits. In October 2018, one of the Swedish subsidiaries received an adverse decision from Sweden's Administrative Court, which Sirius Group has appealed. Sirius Group has taken into account this and other relevant developments in applicable Swedish tax law and has established a reserve for this uncertain tax position. As of March 31, 2019, the total amount of such reserve was $63.0 million. In connection with this matter, Sirius Group has also taken into account the Stock Purchase Agreement (“SPA”) by which Sirius Group was sold to CMIG International Holding Pte. Ltd (‘‘CMIG International’’) in 2016 and has recorded an indemnification asset. Pursuant to the SPA, the seller agreed to indemnify the buyer and Sirius Group for, among other things, (1) any additional tax liability in excess of Sirius Group’s accounting for uncertain tax positions for tax periods prior to the sale of Sirius Group to CMIG International, and (2) an impairment in Sirius Group’s net deferred tax assets resulting from a final determination by a tax authority. While Sirius Group intends to continue challenging the STA’s denial based on the technical merits (including appealing the adverse court decision received in October 2018), the ultimate resolution of these tax disputes is uncertain and no assurance can be given that there will be no material changes to Sirius Group’s operating results or balance sheet in connection with these uncertain tax positions or the related indemnification. With few exceptions, Sirius Group is no longer subject to U.S. federal, state or non-U.S. income tax examinations by tax authorities for years before 2014. |
Derivatives
Derivatives | 3 Months Ended |
Mar. 31, 2019 | |
Derivatives | |
Derivatives | Note 11. Derivatives Interest Rate Cap Sirius Group entered into an interest rate swap (“Interest Rate Cap”) with two financial institutions where it paid an upfront premium and in return receives a series of quarterly payments based on the 3-month London Interbank Offered Rate (“LIBOR”) at the time of payment. The Interest Rate Cap does not qualify for hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Other revenue. The fair value of the interest rate cap has been estimated using a single broker quote and, accordingly, has been classified as a Level 3 measurement as of March 31, 2019 and December 31, 2018. Collateral held is recorded within short-term investments with an equal amount recognized as a liability to return collateral. Sirius Group’s liability to return that collateral is based on the amounts provided by the counterparties and investment earnings thereon. The following table summarizes the Interest Rate Cap collateral balances held by Sirius Group and ratings by counterparty: March 31, 2019 Collateral Balances S & P (Millions) Held Rating (1) Barclays Bank Plc $ 0.1 A Nordea Bank Abp 0.1 AA- Total $ 0.2 (1) Standard & Poor's ratings as detailed above are: "AA-" (Very Strong, which is the fourth highest of twenty-three creditworthiness ratings) and "A" (Strong, which is the sixth highest of twenty-three credit worthiness ratings). Foreign currency swaps Sirius Group executes foreign currency swaps to manage foreign currency exposure. The foreign currency swaps have not been designated or accounted for under hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Net foreign exchange gains (losses). The fair value of the foreign currency swaps has been estimated using a single broker quote and, accordingly, has been classified as a Level 3 measurement as of March 31, 2019 and December 31, 2018. Sirius Group does not provide or hold any collateral associated with the swaps. Foreign currency forward Sirius Group executes foreign currency forwards to manage currency exposure against a foreign currency investment. The foreign currency forwards are not designated or accounted for under hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Net foreign exchange gains (losses). The fair value of the foreign currency forwards are estimated using a single broker quote and accordingly, classified as a Level 3 measurement. Sirius Group did not provide or hold any collateral associated with the forwards. Weather derivatives Sirius Group holds assets and assumes liabilities related to weather and weather contingent risk management products. Weather and weather contingent derivative contracts are entered into with the objective of generating profits in normal climatic conditions. Accordingly, Sirius Group’s weather and weather contingent derivatives are not designed to meet the criteria for hedge accounting under GAAP. Sirius Group receives payment of premium at the contract inception in exchange for bearing the risk of variations in a quantifiable weather index. Changes in fair value are recognized as unrealized gains or losses and are presented within Other revenue. The fair value of the weather derivatives was estimated using a broker quote. Because of the significance of the unobservable inputs used to estimate the fair value of Sirius Group’s weather risk contracts, the fair value measurements of the contracts are deemed to be Level 3 measurements in the fair value hierarchy as of March 31, 2019 and December 31, 2018. Sirius Group does not provide or hold any collateral associated with the weather derivatives. Equity futures contracts Sirius Group executes trades in equity futures contracts to hedge against long positions in Common equities. The equity futures contracts are not designated or accounted for under hedge accounting. Changes in fair value are presented within Net realized investment gains (losses). The fair value of the equity put options is widely available and have quoted prices in active markets and accordingly, were classified as a Level 1 measurement. Equity put options Sirius Group executes trades in equity put options to hedge against long positions in Common equities. The equity put options are not designated or accounted for under hedge accounting. Changes in fair value are presented within Net unrealized investment (losses) gains. The fair value of the equity put options is widely available and have quoted prices in active markets and accordingly, were classified as a Level 1 measurement. The following tables summarize information on the classification and amount of the fair value of derivatives not designated as hedging instruments within the Company’s Consolidated Balance Sheets as at March 31, 2019 and December 31, 2018: (Millions) March 31, 2019 December 31, 2018 Asset Liability Asset Liability derivative derivative derivative derivative Notional at fair at fair Notional at fair at fair Derivatives not designated as hedging instruments Value value (1) value (2) Value value (1) value (2) Interest rate cap $ 250.0 $ 0.1 $ — $ 250.0 $ 0.2 $ — Foreign currency swaps $ 90.0 $ — $ 3.8 $ 45.0 $ — $ 4.6 Foreign currency forwards $ 15.0 $ 0.2 $ — $ — $ — $ — Weather derivatives $ 121.6 $ — $ 1.3 $ 150.5 $ 3.9 $ — Equity futures contracts $ (17.0) $ — $ 0.2 $ — $ — $ — Equity put options $ 10.9 $ 0.5 $ — $ 6.2 $ — $ 0.5 (1) Asset derivatives are classified within Other assets within the Company’s Consolidated Balance Sheets at March 31, 2019 and December 31, 2018. (2) Liability derivatives are classified within Other liabilities within the Company’s Consolidated Balance Sheets at March 31, 2019 and December 31, 2018. The following table summarizes information on the classification and net impact on earnings, recognized in the Company’s Consolidated Statements of (Loss) Income relating to derivatives during the three months ended March 31, 2019 and 2018: For the three months ended (Millions) March 31, Derivatives not designated as Classification of gains hedging instruments (losses) recognized in earnings Interest rate cap Other revenues $ (0.1) $ 0.3 Foreign currency swaps Net foreign exchange gains (losses) $ 0.8 $ 1.3 Foreign currency forwards Net foreign exchange gains (losses) $ 0.2 $ — Weather derivatives Other revenues $ (6.0) $ 1.0 Equity futures contracts Net realized investment gains (losses) $ (0.6) $ — Equity futures contracts Net unrealized investment gains $ (0.2) $ — Equity put options Net unrealized investment gains $ (0.4) $ — |
Share-based compensation
Share-based compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-based compensation | |
Share-based compensation | Note 12. Share-based compensation Sirius Group’s employee compensation plans include grants for various types of share-based and non share-based compensation awards to key employees of Sirius Group. As at March 31, 2019, Sirius Group’s share-based compensation awards consist of performance shares units, restricted share units, and options. For the three months ended March 31, 2019, Sirius Group granted employees 401,311 performance share units, 1,411,714 restricted share units, and 1,374,944 of officer stock options. As at March 31, 2019 there were $34.3 million of unrecognized share-based compensation costs, which are expected to be recognized over the next two to 3 years. There were no unrecognized share-based compensation costs as at March 31, 2018. |
Common shareholder equity's, me
Common shareholder equity's, mezzanine equity, and non-controlling interests | 3 Months Ended |
Mar. 31, 2019 | |
Common shareholder's equity, mezzanine equity, and non-controlling interests | |
Common shareholder's equity, mezzanine equity, and non-controlling interests | Note 13. Common shareholder’s equity, mezzanine equity, and non-controlling interests Common shareholder’s equity The authorized share capital of the Company consists of 500,000,000 Common shares, $0.01 par value per share, and 100,000,000 Preference shares, $0.01 par value per share. The following table presents changes in the Company’s issued and outstanding Common shares as at March 31, 2019 and 2018, respectively: Three Months Ended March 31, (Millions) Common shares: Shares issued and outstanding, beginning of period 115,151,251 120,000,000 Issuance of shares to directors and employees 111,052 — Shares issued and outstanding, end of period 115,262,303 120,000,000 Dividends The Company did not pay dividends to common shareholders during the three months ended March 31, 2019 and 2018. Mezzanine equity Series B Preference Shares On November 5, 2018, in connection with the closing of the Merger, Sirius Group issued 11,901,670 of the 15,000,000 designated Series B preference shares, with a par value of $0.01 per share, as part of the Sirius Group Private Placement. (See Note 3.) The Series B preference shares rank senior to common shares with respect to dividend rights, rights of liquidation, winding-up, or dissolution of the Company and junior to all of the Company’s existing and future policyholder obligations and debt obligations. Without the consent of the holders of the Series B preference shares, the Company may not issue any class or series of shares that rank senior or pari passu with the Series B preference shares as to the payment of dividends or as to distribution of assets upon any voluntary or involuntary liquidation, winding-up or dissolution of the Company, if the aggregate gross proceeds from the issuance of all such senior or pari passu shares equals or exceeds $100 million. The Company adjusts the carrying value of the Series B preference shares to equal the redemption value at the end of each reporting period. At March 31, 2019 and December 31, 2018, the balance of the Series B preference shares was $240.6 million and $232.2 million, respectively. Series A Redeemable Preference Shares In connection with the acquisition of IMG, the Company issued mandatorily convertible stock in the form of Series A redeemable preference shares as a portion of the consideration paid. The Company issued 100,000 of the 150,000 authorized Series A redeemable preference shares to the seller of IMG. Each Series A redeemable preference share has a liquidation preference per share of $1,000. On November 5, 2018, in connection with the closing of the Merger, the Company redeemed the 100,000 outstanding shares of Series A redeemable preference shares for $95.0 million. Sirius Group recorded a $13.8 million gain on the redemption of the Series A redeemable preference shares. Non-controlling interests Non-controlling interests consist of the ownership interests of non-controlling shareholders in consolidated entities and are presented separately on the balance sheet. At March 31, 2019 and December 31, 2018 Sirius Group’s balance sheet included $2.2 million and $1.7 million, respectively, in non-controlling interests. The following tables show the change in non-controlling interest for the three months ended March 31, 2019 and 2018: (Millions) Total Non-controlling interests as of December 31, 2018 $ 1.7 Net income attributable to non-controlling interests 0.4 Other, net 0.1 Non-controlling interests as of March 31, 2019 $ 2.2 (Millions) Total Non-controlling interests as of December 31, 2017 $ 0.2 Net income attributable to non-controlling interests 0.2 Other, net 0.1 Non-controlling interests as of March 31, 2018 $ 0.5 Alstead Re As of March 31, 2019 and December 31, 2018, Sirius Group recorded non-controlling interest of $2.1 million and $1.7 million, respectively, in Alstead Re Insurance Company (“Alstead Re”). (See Note 16. ) |
Earnings per share
Earnings per share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings per share | |
Earnings per share | Note 14. Earnings per share Basic earnings per share is computed by dividing net income available to Sirius Group common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) available to Sirius Group common shareholders on a diluted basis by the weighted-average number of common shares outstanding adjusted to give effect to potentially dilutive securities. The Series B preference shares and the Series A redeemable preference shares both qualify as participating securities, which requires the application of the two-class method to compute both basic and diluted earnings per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common shareholders. The Series B preference shares and the Series A redeemable preference shares have no obligation to absorb losses of the Company in periods of net loss. The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended March 31, 2019 and 2018: For the three months ended March 31, (Millions, except share and per share information) Basic earnings per share Numerator: Net income $ 104.1 $ 43.3 Less: Income attributable to non-controlling interests (0.4) (0.2) Less: Change in carrying value of Series B preference shares (8.4) — Less: Accrued dividends on Series A redeemable preference shares — (2.6) Net income available for dividends out of undistributed earnings $ 95.3 $ 40.5 Less: Earnings attributable to Series B preference shares (8.9) — Less: Earnings attributable to Series A redeemable preference shares — (1.7) Net income available to Sirius Group common shareholders $ 86.4 $ 38.8 Denominator: Weighted average shares outstanding for basic earnings per share 115,182,331 120,000,000 Basic earnings per share $ 0.75 $ 0.32 Diluted earnings per share Numerator: Net income available to Sirius Group common shareholders $ 86.4 $ 38.8 Add: Change in carrying value of Series B preference shares 8.4 — Net income available to Sirius Group common shareholders on a diluted basis $ 94.8 $ 38.8 Denominator: Weighted average shares outstanding for basic earnings per share 115,182,331 120,000,000 Add: Series B preference shares 11,901,670 — Add: Unvested performance share units and restricted share units 251,313 — Weighted average shares outstanding for diluted earnings per share(1) 127,335,314 120,000,000 Diluted earnings per share $ 0.74 $ 0.32 (1) As at March 31, 2019, there were a total of 19,510,830 of potentially dilutive securities excluded from the calculation of Diluted earnings per share. As at March 31, 2018, there were no potentially dilutive securities excluded from the calculation of Diluted earnings per share. |
Investments in unconsolidated e
Investments in unconsolidated entities | 3 Months Ended |
Mar. 31, 2019 | |
Investments in unconsolidated entities | |
Investments in unconsolidated entities | Note 15. Investments in unconsolidated entities Sirius Group’s investments in unconsolidated entities are included within Other long-term investments and consist of investments in common equity securities or similar instruments, which give Sirius Group the ability to exert significant influence over the investee’s operating and financial policies (“equity method eligible unconsolidated entities”). Such investments may be accounted for under either the equity method or, alternatively, Sirius Group may elect to account for them under the fair value option. The following table presents the components of Other long-term investments as of March 31, 2019 and December 31, 2018: (Millions) March 31, 2019 December 31, 2018 Equity method eligible unconsolidated entities, at fair value $ 167.5 $ 169.4 Other unconsolidated investments, at fair value (1) 222.2 195.6 Total Other long-term investments (2) $ 389.7 $ 365.0 (1) Includes Other long-term investments that are not equity method eligible . (2) There were no investments accounted for using the equity method as of March 31, 2019 and December 31, 2018. Equity method eligible unconsolidated entities, at fair value Sirius Group has elected the fair value option to account for its equity method eligible investments accounted for as part of Other long-term investments for consistency of presentation with the rest of its investment portfolio. The following table presents Sirius Group’s investments in equity method eligible unconsolidated entities as of March 31, 2019 and December 31, 2018 with ownership interest greater than 20%: Ownership interest at March 31, December 31, Investee Instrument Held BE Reinsurance Limited 25.0 % 25.0 % Common shares BioVentures Investors (Offshore) IV LP 73.0 % 73.0 % Units Camden Partners Strategic Fund V (Cayman), LP 39.4 % 36.4 % Units NEC Cypress Buyer LLC 23.5 % 13.3 % Units New Energy Capital Infrastructure Credit Fund LP(1) 18.3 % 22.9 % Units New Energy Capital Infrastructure Offshore Credit Fund LP(1) 12.2 % 54.9 % Units Scion G7, LP 28.3 % 28.8 % Units Tuckerman Capital V LP 48.3 % 47.6 % Units Tuckerman Capital V Co-Investment I LP 49.5 % 47.7 % Units (1) The ownership percentage of New Energy Capital Infrastructure Credit Fund LP and New Energy Capital Infrastructure Offshore Credit Fund LP was greater than 20% at December 31, 2018 but was less than 20% at March 31, 2019 and is included in the table for comparative purposes. |
Variable interest entities
Variable interest entities | 3 Months Ended |
Mar. 31, 2019 | |
Variable interest entities | |
Variable interest entities | Note 16. Variable interest entities Sirius Group consolidates the results of operations and financial position of every voting interest entity (“VOE”) in which it has a controlling financial interest and VIEs in which it is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VOE or VIE, depends on the facts and circumstances surrounding each entity. Sirius Group has determined that Alstead Re is a VIE for which Sirius Group is the primary beneficiary and is required to consolidate it. The following table presents Alstead Re’s assets and liabilities, as classified in the Consolidated Balance Sheets as at March 31, 2019 and December 31, 2018: ( Millions ) March 31, 2019 December 31, 2018 Assets: Fixed maturity investments, trading at fair value $ 3.9 $ 4.0 Short-term investments, at fair value 0.4 0.3 Cash 0.2 0.2 Total investments 4.5 4.5 Insurance and reinsurance premiums receivable 1.5 0.1 Funds held by ceding companies 4.7 3.7 Deferred acquisition costs 0.5 5.2 Other assets 0.1 0.9 Total assets $ 11.3 $ 14.4 Liabilities Loss and loss adjustment expense reserves $ 3.0 $ 4.6 Unearned insurance and reinsurance premiums 1.7 3.7 Other liabilities 0.1 — Total liabilities $ 4.8 $ 8.3 Sirius Group is a passive investor in certain third-party-managed hedge and private equity funds, some of which are VIEs. Sirius Group is not involved in the design or establishment of these VIEs, nor does it actively participate in the management of the VIEs. The exposure to loss from these investments is limited to the carrying value of the investments at the balance sheet date. Sirius Group calculates maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of VIE assets or liabilities where Sirius Group has also provided credit protection to the VIE with the VIE as the referenced obligation, and (iii) other commitments and guarantees to the VIE. Sirius Group does not have any VIEs that it sponsors nor any VIEs where it has recourse to it or has provided a guarantee to the VIE interest holders. The following table presents total assets of unconsolidated VIEs in which Sirius Group holds a variable interest, as well as the maximum exposure to loss associated with these VIEs: Maximum Exposure to Loss Total VIE On-Balance Off-Balance (Millions) Assets Sheet Sheet Total March 31, 2019 Other long-term investments (1) $ 220.6 $ 118.5 $ 25.3 $ 143.8 Total at March 31, 2019 $ 220.6 $ 118.5 $ 25.3 $ 143.8 December 31, 2018 Other long-term investments (1) $ 209.1 $ 103.1 $ 32.0 $ 135.1 Total at December 31, 2018 $ 209.1 $ 103.1 $ 32.0 $ 135.1 (1) Comprised primarily of hedge funds and private equity funds. |
Transactions with related parti
Transactions with related parties | 3 Months Ended |
Mar. 31, 2019 | |
Transactions with related parties | |
Transactions with related parties | Note 17. Transactions with related parties (Re)insurance contracts In the normal course of business, Sirius Group enters into insurance and reinsurance contracts with certain of its insurance and MGU affiliates, or their subsidiaries. During the three months ended March 31, 2019 and 2018, these contracts resulted in gross written premiums of $24.1 million and $19.3 million, respectively. As at March 31, 2019 and December 31, 2018, Sirius Group had total receivables due from affiliates of $19.4 million and 14.3 million, respectively. As at March 31, 2019, Sirius Group had total payables due to affiliates of $0.7 million. As at December 31, 2018 Sirius Group did not have any payables due to affiliates. Other Meyer “Sandy” Frucher is the Company’s Interim Chairman of the board of directors and is also Vice Chairman of Nasdaq, Inc. The Company is traded on the Nasdaq Global Select Market and has business transactions that are related to its listing on the exchange under the normal course of business. (See Note 3 .) |
Commitments and contingencies
Commitments and contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and contingencies | |
Commitments and contingencies | Note 18. Commitments and contingencies Legal Proceedings Sirius Group, and the insurance and reinsurance industry in general, are routinely subject to claims related litigation and arbitration in the normal course of business, as well as litigation and arbitration that do not arise from, or are directly related to, claims activity. Sirius Group estimates of the costs of settling matters routinely encountered in claims activity are reflected in the reserves for unpaid loss and LAE. (See Note 5. ) Sirius Group considers the requirements of ASC 450, Contingencies (“ASC 450”) , when evaluating its exposure to non-claims related litigation and arbitration. ASC 450 requires that accruals be established for litigation and arbitration if it is probable that a loss has been incurred and it can be reasonably estimated. ASC 450 also requires that litigation and arbitration be disclosed if it is probable that a loss has been incurred or it there is a reasonable possibility that a loss may have been incurred. Leases Sirius Group leases office space and equipment under various noncancellable operating lease agreements. The average life of the office leases is 7 years and the equipment leases is 3 years. During the three months ended March 31, 2019, Sirius Group recognized operating lease expense of $2.6 million, including property taxes and routine maintenance expense as well as rental expenses related to short term leases. As at March 31, 2019, Sirius Group had $32.0 million operating lease right-of-use assets included in Other assets. As at March 31, 2019, Sirius Group had $33.9 million operating lease liability included in Other liabilities. The following table presents the lease balances within the Consolidated Balance Sheets as at March 31, 2019: ( millions ) Balance Sheet Classification March 31, 2019 Operating lease right-of-use assets Other assets $ 32.0 Current lease liabilities Other liabilities $ 9.8 Non-current lease liabilities Other liabilities $ 24.1 The following table presents weighted average remaining lease term and weighted average discount rate as at March 31, 2019: Weighted average lease term (years) as at March 31, 2019: Leased offices 7.0 years Leased equipment 3.0 years Weighted average discount rate: Leased offices 3.8 % Leased equipment 3.4 % The following table presents future annual minimum rental payments required under non-cancellable leases and the present value discount to arrive at total lease liability as at March 31, 2019: (Millions) Future Payments 2019 $ 7.7 2020 8.9 2021 7.4 2022 6.6 2023 4.2 2024 and after 2.0 Total future annual minimum rental payments as at March 31, 2019 36.8 Less: present value discount (2.9) Total lease liability as at March 31, 2019 $ 33.9 As of March 31, 2019, the Company's future operating lease obligations that have not yet commenced are immaterial. |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Summary of significant accounting policies | |
Basis of presentation | Basis of presentation The accompanying Unaudited Consolidated Financial Statements at March 31, 2019, have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) for interim financial information. The accompanying Unaudited Consolidated Financial Statements present the consolidated results of operations, financial condition, and cash flows of the Company and its subsidiaries and those entities in which the Company has control and a majority economic interest as well as those variable interest entities (“VIEs”) that meet the requirements for consolidation. All intercompany transactions have been eliminated in consolidation. These Unaudited Consolidated Financial Statements do not include all disclosures normally included in annual financial statements prepared in accordance with GAAP and should be read in conjunction with the Audited Consolidated Financial Statements and the related notes for the year ended December 31, 2018. The consolidated financial information as of December 31, 2018 included herein has been derived from the Audited Consolidated Financial Statements as of December 31, 2018. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the accompanying Unaudited Consolidated Financial Statements reflect all adjustments (consisting of normally recurring accruals) necessary for a fair statement of results on an interim basis. Tabular dollar amounts are in millions, with the exception of share and per share amounts. All amounts are reported in U.S. dollars, except where noted otherwise. |
Recently adopted changes in accounting principles | Recently adopted changes in accounting principles Leases Effective January 1, 2019, Sirius Group adopted Accounting Standards Update (“ASU”) 2016-02, Leases (Accounting Standards Codification (“ASC”) 842) which requires lessees to recognize lease assets and liabilities on the balance sheet for both operating and financing leases, with the exception of leases with an original term of 12 months or less. Under previous guidance, recognition of lease assets and liabilities was not required for operating leases. The new guidance requires that lease assets and liabilities to be recognized and measured initially based on the present value of the lease payments. Sirius Group adopted the new guidance using the simplified transition option that allows companies to apply the new lease standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. Sirius Group also made the following elections: · Sirius Group elected the package of practical expedients to not reassess prior conclusions related to contracts containing leases, lease classification and initial direct costs for all leases upon transition. · Sirius Group did not elect the hindsight practical expedient upon transition, for all leases. · Sirius Group elected the short-term lease measurement and recognition exemption, resulting in lease payments being recorded as an expense on a straight-line basis over the lease term. · Sirius Group elected to include both lease and non-lease components as a single component for all leases. · Sirius Group did not elect the land easement practical expedient as it was not applicable. As a result of the adoption of the new guidance, Sirius Group recognized a lease liability of $36.8 million, which represents the present value of our remaining lease payments and a right-of-use asset of $34.4 million as of January 1, 2019. The adoption of this guidance did not materially impact our results of operations or cash flows. Due to the adoption of the standard using the retrospective cumulative-effect adjustment method, there are no changes to our previously reported results prior to January 1, 2019. Lease expense is not expected to change materially as a result of the adoption of the new guidance. (See Note 18.) Premium amortization on callable debt securities Effective January 1, 2019, Sirius Group adopted ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities (ASC 310-20), which changes the amortization period for certain purchased callable debt securities. Under the new guidance, for investments in callable debt securities held at a premium, the premium will be amortized over the period to the earliest call date. The new guidance does not change the amortization period for callable debt securities held at a discount. The adoption of this guidance did not have significant effect on our financial statements. |
Recent accounting pronouncements | Recent accounting pronouncements Credit losses In June 2016, the Financial Accounting Standards Board issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (ASC 326), which establishes new guidance for the recognition of credit losses for financial assets measured at amortized cost. The new guidance, which applies to financial assets that have the contractual right to receive cash, including reinsurance receivables and recoverables, requires reporting entities to estimate the credit losses expected over the life of a credit exposure using historical information, current information and reasonable and supportable forecasts that affect the collectability of the financial asset. The new guidance is effective for annual and interim periods beginning after December 15, 2019. Sirius Group is evaluating the expected impact of this new guidance. |
Segment information (Tables)
Segment information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment information | |
Summary of segment results | The following tables summarize the segment results for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, 2019 Global Global Specialty & Runoff & Corporate (Millions) Property A&H Casualty Other Elimination Total Gross written premiums $ 330.7 $ 169.3 $ 120.9 $ 1.4 $ — $ 622.3 Net written premiums $ 241.3 $ 134.9 $ 108.2 $ 0.4 $ — $ 484.8 Net earned insurance and reinsurance premiums $ 139.7 $ 96.1 $ 75.7 $ 0.4 $ — $ 311.9 Loss and allocated LAE (1) (62.6) (63.2) (47.6) (1.1) — (174.5) Insurance and reinsurance acquisition expenses (25.8) (26.6) (20.5) (0.7) 10.3 (63.3) Technical profit (loss) 51.3 6.3 7.6 (1.4) 10.3 74.1 Unallocated LAE (2) (2.1) (1.5) (1.9) (0.5) (3.4) (9.4) Other underwriting expenses (16.2) (6.1) (8.2) (2.1) (2.7) (35.3) Underwriting (loss) income 33.0 (1.3) (2.5) (4.0) 4.2 29.4 Service fee revenue (3) — 36.3 — — (11.0) 25.3 Managing general underwriter unallocated LAE (4) — (4.1) — — 4.1 — Managing general underwriter other underwriting expenses (5) — (2.7) — — 2.7 — General and administrative expenses, MGU + Runoff & Other (6) — (16.2) — (0.8) — (17.0) Underwriting (loss) income, including net service fee income 33.0 12.0 (2.5) (4.8) — 37.7 Net investment income 20.1 Net realized investment gains (losses) 9.0 Net unrealized investment gains 74.0 Net foreign exchange gains (losses) 5.1 Other revenue (7) (5.7) General and administrative expenses (8) (7.4) Intangible asset amortization expenses (3.9) Interest expense on debt (7.6) Pre-tax income $ 121.3 Underwriting Ratios Loss ratio 46.3 % 67.3 % 65.4 % NM NM 59.0 % Acquisition expense ratio 18.5 % 27.7 % 27.1 % NM NM 20.3 % Other underwriting expense ratio 11.6 % 6.3 % 10.8 % NM NM 11.3 % Combined ratio (9) 76.4 % 101.3 % 103.3 % NM NM 90.6 % Goodwill and intangible assets (10) $ — $ 584.2 $ — $ 8.1 $ — $ 592.3 (1) Loss and allocated loss adjustment expenses (“LAE”) are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income). (2) Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income). (3) Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income). (4) Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other. (5) Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process. (6) General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income). (7) Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11 ) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income). (8) General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income). (9) Ratios considered not meaningful (“NM”) to Runoff & Other and Corporate Elimination. (10) Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets. For the three months ended March 31, 2018 Global Global Specialty & Runoff & Corporate (Millions) Property A&H Casualty Other Elimination Total Gross written premiums $ 346.6 $ 145.6 $ 115.5 $ 7.5 $ — $ 615.2 Net written premiums $ 247.2 $ 115.5 $ 100.6 $ 6.1 $ — $ 469.4 Net earned insurance and reinsurance premiums $ 136.1 $ 88.0 $ 54.4 $ 6.0 $ — $ 284.5 Loss and allocated LAE (1) (70.4) (45.8) (21.6) 2.4 — (135.4) Insurance and reinsurance acquisition expenses (29.3) (29.2) (14.1) (0.7) 10.3 (63.0) Technical profit 36.4 13.0 18.7 7.7 10.3 86.1 Unallocated LAE (2) (1.9) (1.6) (1.2) (0.9) — (5.6) Other underwriting expenses (17.4) (8.0) (8.0) (1.4) (8.4) (43.2) Underwriting income 17.1 3.4 9.5 5.4 1.9 37.3 Service fee revenue (3) — 32.8 — — (10.3) 22.5 Managing general underwriter unallocated LAE (4) — — — — — — Managing general underwriter other underwriting expenses (5) — (8.4) — — 8.4 — General and administrative expenses, MGU + Runoff & Other (6) — (9.5) — (1.1) — (10.6) Underwriting income (loss), including net service fee income 17.1 18.3 9.5 4.3 — 49.2 Net investment income 10.8 Net realized investment gains (losses) (3.7) Net unrealized investment gains 16.0 Net foreign exchange gains (losses) (3.5) Other revenue (7) 0.9 General and administrative expenses (8) (3.7) Intangible asset amortization expenses (3.9) Interest expense on debt (7.7) Pre-tax income $ 54.4 Underwriting Ratios Loss ratio 53.1 % 53.9 % 41.9 % NM NM 49.6 % Acquisition expense ratio 21.5 % 33.2 % 25.9 % NM NM 22.1 % Other underwriting expense ratio 12.8 % 9.1 % 14.7 % NM NM 15.2 % Combined ratio (9) 87.4 % 96.2 % 82.5 % NM NM 86.9 % Goodwill and intangible assets (10) $ — $ 608.6 $ — $ 5.0 $ — $ 613.6 (1) Loss and allocated loss adjustment expenses (“LAE”) are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income). (2) Unallocated LAE are part of Loss and loss adjustment expenses on the Consolidated Statements of Income (the sum of Loss and allocated LAE and Unallocated LAE is equal to Loss and loss adjustment expenses on the Consolidated Statements of Income). (3) Service fee revenue is part of Other revenue on the Consolidated Statements of Income (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income). (4) Managing general underwriter unallocated LAE represents IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the claims process. In prior periods, all Armada and IMG expenses were disclosed within General and administrative expenses, MGU + Runoff & Other. (5) Managing general underwriter other underwriting expenses represent IMG and Armada generated operating expenses following their integration with the Accident and Health insurance and reinsurance underwriting unit, representing costs associated with the underwriting process. (6) General and administrative expenses, MGU + Runoff & Other is part of General and administrative expenses on the Consolidated Statements of Income (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income). (7) Other revenue is presented net of Service fee revenue and is comprised mainly of gains (losses) from derivatives (see Note 11 ) (the sum of Service fee revenue and Other revenue is equal to Other revenue on the Consolidated Statements of Income). (8) General and administrative expenses are presented net of General and administrative expenses, MGU + Runoff & Other (the sum of General and administrative expenses, MGU + Runoff & Other and General and administrative expenses is equal to General and administrative expenses on the Consolidated Statements of Income). (9) Ratios considered not meaningful (“NM”) to Runoff & Other and Corporate Elimination. (10) Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets. |
Summary information regarding net premiums written by client location and underwriting location by reportable segment | The following tables provide summary information regarding net premiums written by client location and underwriting location by reportable segment for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, 2019 Global Global Specialty & Runoff & (Millions) Property A&H Casualty Other Total Net written premiums by client location: United States $ 61.9 $ 111.1 $ 68.4 $ 0.2 $ 241.6 Europe 124.8 8.0 24.8 0.1 157.7 Canada, the Caribbean, Bermuda and Latin America 24.5 5.0 4.4 - 33.9 Asia and Other 30.1 10.8 10.6 0.1 51.6 Total net written premium by client location $ 241.3 $ 134.9 $ 108.2 $ 0.4 $ 484.8 Net written premiums by underwriting location: United States $ 8.0 $ 40.3 $ 12.4 $ 0.2 $ 60.9 Europe 154.6 63.6 54.6 0.1 272.9 Canada, the Caribbean, Bermuda and Latin America 62.4 30.7 40.2 — 133.3 Asia and Other 16.3 0.3 1.0 0.1 17.7 Total written premiums by underwriting location $ 241.3 $ 134.9 $ 108.2 $ 0.4 $ 484.8 For the three months ended March 31, 2018 Global Global Specialty & Runoff & (Millions) Property A&H Casualty Other Total Net written premiums by client location: United States $ 87.0 $ 87.5 $ 37.3 $ 6.1 $ 217.9 Europe 106.3 11.6 50.3 — 168.2 Canada, the Caribbean, Bermuda and Latin America 23.2 4.8 2.6 — 30.6 Asia and Other 30.7 11.6 10.4 — 52.7 Total net written premium by client location $ 247.2 $ 115.5 $ 100.6 $ 6.1 $ 469.4 Net written premiums by underwriting location: United States $ 5.3 $ 21.0 $ (0.1) $ 6.1 $ 32.3 Europe 136.5 68.6 72.0 — 277.1 Canada, the Caribbean, Bermuda and Latin America 89.8 25.7 27.5 — 143.0 Asia and Other 15.6 0.2 1.2 — 17.0 Total written premiums by underwriting location $ 247.2 $ 115.5 $ 100.6 $ 6.1 $ 469.4 |
Reserves for unpaid losses an_2
Reserves for unpaid losses and loss adjustment expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Reserves for unpaid losses and loss adjustment expenses | |
Summary of the loss and LAE reserve activities | Three Months Ended March 31, (Millions) 2019 2018 Gross beginning balance $ 2,016.7 $ 1,898.5 Less beginning reinsurance recoverable on unpaid losses (350.2) (319.7) Net loss and LAE reserve balance 1,666.5 1,578.8 Losses and LAE incurred relating to: Current year losses 167.3 143.5 Prior years losses 16.6 (2.5) Total net incurred losses and LAE 183.9 141.0 Foreign currency translation adjustment to net loss and LAE reserves (3.4) 6.7 Loss and LAE paid relating to: Current year losses 36.2 31.3 Prior years losses 183.8 147.1 Total loss and LAE payments 220.0 178.4 Net ending balance 1,627.0 1,548.1 Plus ending reinsurance recoverable on unpaid losses 349.3 327.8 Gross ending balance $ 1,976.3 $ 1,875.9 |
Investment securities (Tables)
Investment securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Marketable securities | |
Schedule of net investment income | For the three months ended March 31, (Millions) 2019 2018 Fixed maturity investments $ 16.8 $ 9.9 Short-term investments 0.4 0.8 Equity securities 2.7 1.2 Other long-term investments 3.9 1.2 Total investment income 23.8 13.1 Investment expenses (3.7) (2.3) Net investment income $ 20.1 $ 10.8 |
Schedule of net realized and unrealized investment (losses) gains | For the three months ended March 31, (Millions) 2019 2018 Gross realized gains $ 14.1 $ 8.4 Gross realized (losses) (5.1) (12.1) Net realized gains (losses) on investments (1) 9.0 (3.7) Net unrealized gains on investments (2) 74.0 16.0 Net realized and unrealized investment gains on investments $ 83.0 $ 12.3 (1) Includes $10.9 and $(1.1) of realized gains (losses) due to foreign currency during 2019 and 2018, respectively. (2) Includes $25.0 and $18.9 of unrealized gains due to foreign currency during 2019 and 2018, respectively. |
Schedule of net realized investment gains (losses) | For the three months ended March 31, (Millions) 2019 2018 Fixed maturity investments $ 6.8 $ (2.8) Short-term investments 0.1 — Equity securities (0.6) (1.5) Other long-term investments 3.3 0.6 Derivative instruments (1) (0.6) — Net realized investment gains (losses) $ 9.0 $ (3.7) (1) See Note 11. |
Schedule of net unrealized investment gains (losses) | For the three months ended March 31, (Millions) 2019 2018 Fixed maturity investments $ 29.7 $ 3.0 Short-term investments 2.7 — Equity securities 25.1 6.4 Other long-term investments 17.1 6.6 Derivative instruments (1) (0.6) — Net unrealized investment gains $ 74.0 $ 16.0 (1) See Note 11. |
Level 3 | |
Marketable securities | |
Schedule of net unrealized investment gains (losses) | For the three months ended March 31, (Millions) 2019 2018 Other long-term investments $ 8.8 $ 0.4 Total unrealized investment gains - Level 3 investments $ 8.8 $ 0.4 |
Hedge funds and private equity funds | |
Marketable securities | |
Schedule of redemption frequency and advance notice period requirements for investments | The following summarizes the March 31, 2019 fair value of hedge funds subject to restrictions on redemption frequency and advance notice period requirements for investments in active hedge funds: Notice Period Redemption Frequency 30-59 days 60-89 days 90-119 days 120+ days (Millions) notice notice notice notice Total Monthly $ — $ 32.7 $ — $ — $ 32.7 Quarterly 0.8 — — — 0.8 Semi-annual — 0.8 — — 0.8 Annual — 16.9 51.6 20.3 88.8 Total $ 0.8 $ 50.4 $ 51.6 $ 20.3 $ 123.1 |
Private equity securities | |
Marketable securities | |
Schedule of investment securities by lock-up period. | As of March 31, 2019, investments in private equity funds were subject to lock-up periods as follows: (Millions) 1 - 3 years 3 – 5 years 5 – 10 years Total Private Equity Funds – expected lock-up period remaining $ 12.6 $ 4.3 $ 161.7 $ 178.6 |
Fixed maturity investments | |
Marketable securities | |
Schedule of investment securities and other long-term investments | March 31, 2019 Net foreign Cost or Gross Gross currency amortized unrealized unrealized gains Fair (Millions) cost gains losses (losses) value Corporate debt securities $ 614.6 $ 3.0 $ (2.7) $ 13.2 $ 628.1 Asset-backed securities 476.7 0.3 (3.9) 3.8 476.9 Residential mortgage-backed securities 415.1 5.2 (3.9) 9.4 425.8 U.S. government and government agency 151.9 0.3 (0.2) 6.4 158.4 Commercial mortgage-backed securities 113.6 0.4 (1.6) 1.2 113.6 Non-U.S. government and government agency 37.8 — (0.1) 0.8 38.5 Preferred stocks 2.5 0.1 — (0.1) 2.5 U.S. States, municipalities and political subdivision 2.6 — — — 2.6 Total fixed maturity investments $ 1,814.8 $ 9.3 $ (12.4) $ 34.7 $ 1,846.4 December 31, 2018 Net foreign Cost or Gross Gross currency amortized unrealized unrealized gains Fair (Millions) cost gains losses (losses) value Corporate debt securities $ 694.1 $ 1.4 $ (7.3) $ 7.6 $ 695.8 Asset-backed securities 496.3 0.1 (3.8) 1.9 494.5 Residential mortgage-backed securities 413.0 1.7 (7.1) 5.9 413.5 U.S. government and government agency 163.9 0.3 (0.5) 4.2 167.9 Commercial mortgage-backed securities 117.7 0.2 (2.7) 0.7 115.9 Non-U.S. government and government agency 50.6 — (0.2) (0.1) 50.3 Preferred stocks 14.5 0.6 (6.8) 0.2 8.5 U.S. States, municipalities and political subdivision 2.8 — — — 2.8 Total fixed maturity investments $ 1,952.9 $ 4.3 $ (28.4) $ 20.4 $ 1,949.2 |
Schedule of fixed maturity investment by contractual maturity | March 31, 2019 December 31, 2018 Cost or Fair Cost or Fair (Millions) amortized cost value amortized cost value Due in one year or less $ 241.7 $ 250.0 $ 249.6 $ 254.6 Due after one year through five years 554.3 566.8 635.6 636.4 Due after five years through ten years 10.9 10.8 26.2 25.7 Due after ten years — — 0.1 0.1 Mortgage-backed and asset-backed securities 1,005.4 1,016.3 1,026.9 1,023.9 Preferred stocks 2.5 2.5 14.5 8.5 Total $ 1,814.8 $ 1,846.4 $ 1,952.9 $ 1,949.2 |
Schedule of ratings and fair value of fixed maturity investments | (Millions) March 31, 2019 December 31, 2018 AAA $ 575.6 $ 602.0 AA 799.8 818.0 A 254.2 290.5 BBB 154.4 167.4 Other 62.4 71.3 Total fixed maturity investments (1) $ 1,846.4 $ 1,949.2 (1) Credit ratings are assigned based on the following hierarchy: 1) Standard & Poor's (“S&P”) and 2) Moody's Investors Service (“Moody’s”). |
Other long-term investments | |
Marketable securities | |
Schedule of investment securities and other long-term investments | (Millions) March 31, 2019 December 31, 2018 Hedge funds and private equity funds $ 301.7 $ 301.4 Limited liability companies and private equity securities 88.0 63.6 Total other long-term investments $ 389.7 $ 365.0 |
Other long-term investments | Hedge funds and private equity funds | |
Marketable securities | |
Summary of investment securities by investment objective and sector | March 31, 2019 December 31, 2018 Unfunded Unfunded (Millions) Fair Value Commitments Fair Value Commitments Hedge funds: Long/short multi-sector $ 49.5 $ — $ 41.0 $ — Distressed mortgage credit 50.8 — 54.8 — Private Credit 20.3 — 20.0 — Other 2.5 — 2.5 — Total hedge funds 123.1 — 118.3 — Private equity funds: Energy infrastructure & services 87.5 30.7 93.7 54.2 Multi-sector 9.2 0.7 9.0 0.7 Healthcare 31.7 15.6 31.7 15.6 Life settlement 23.9 — 23.7 — Manufacturing/Industrial 23.6 3.1 23.6 10.4 Private equity secondaries 1.1 1.1 1.1 1.1 Real estate 0.3 — 0.3 — Other 1.3 2.0 — — Total private equity funds 178.6 53.2 183.1 82.0 Total hedge and private equity funds included in other long-term investments $ 301.7 $ 53.2 $ 301.4 $ 82.0 |
Equity securities and Other long-term investments | |
Marketable securities | |
Schedule of investment securities and other long-term investments | March 31, 2019 Cost or Gross Gross Net foreign amortized unrealized unrealized currency Fair (Millions) cost gains losses gains value Equity securities $ 398.4 $ 26.2 $ (38.7) $ 8.5 $ 394.4 Other long-term investments $ 351.7 $ 48.3 $ (20.5) $ 10.2 $ 389.7 December 31, 2018 Cost or Gross Gross Net foreign amortized unrealized unrealized currency Fair (Millions) cost gains losses gains value Equity securities $ 409.4 $ 17.8 $ (50.8) $ 3.6 $ 380.0 Other long-term investments $ 337.6 $ 32.6 $ (13.5) $ 8.3 $ 365.0 |
Fair value measurements (Tables
Fair value measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair value measurements | |
Summary of financial assets and liabilities measured at fair value | March 31, 2019 Fair Level 1 Level 2 Level 3 (Millions) Value Inputs Inputs Inputs Assets measured at fair value Fixed maturity investments: U.S. Government and government agency $ 158.4 $ 157.0 $ 1.4 $ — Corporate debt securities 628.1 — 628.1 — Residential mortgage-backed securities 425.8 — 425.8 — Asset-backed securities 476.9 — 476.9 — Commercial mortgage-backed securities 113.6 — 113.6 — Non-U.S. government and government agency 38.5 33.9 4.6 — Preferred stocks 2.5 — 2.5 — U.S. States, municipalities, and political subdivision 2.6 — 2.6 — Total fixed maturity investments 1,846.4 190.9 1,655.5 — Short-term investments 833.6 792.5 41.1 — Equity securities 394.4 393.5 0.9 — Other long-term investments(1) 88.0 — — 88.0 Total investments $ 3,162.4 $ 1,376.9 $ 1,697.5 $ 88.0 Derivative instruments 0.8 0.5 — 0.3 Total assets measured at fair value $ 3,163.2 $ 1,377.4 $ 1,697.5 $ 88.3 Liabilities measured at fair value Contingent consideration liabilities $ 28.8 $ — $ — $ 28.8 Derivative instruments 5.3 0.2 — 5.1 Total liabilities measured at fair value $ 34.1 $ 0.2 $ — $ 33.9 (1) Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient. December 31, 2018 Fair Level 1 Level 2 Level 3 (Millions) Value inputs inputs inputs Assets measured at fair value Fixed maturity investments: U.S. Government and government agency $ 167.9 $ 164.7 $ 3.2 $ — Corporate debt securities 695.8 — 695.8 — Asset-backed securities 494.5 — 494.5 — Residential mortgage-backed securities 413.5 — 413.5 — Commercial mortgage-backed securities 115.9 — 115.9 — Non-U.S. government and government agency 50.3 42.9 7.4 — Preferred stocks 8.5 — 3.1 5.4 U.S. States, municipalities, and political subdivision 2.8 — 2.8 — Total fixed maturity investments 1,949.2 207.6 1,736.2 5.4 Short-term investments 715.5 679.3 36.2 — Equity securities 380.0 380.0 — — Other long-term investments(1) 63.6 — — 63.6 Total investments $ 3,108.3 $ 1,266.9 $ 1,772.4 $ 69.0 Derivative instruments 4.1 — — 4.1 Total assets measured at fair value $ 3,112.4 $ 1,266.9 $ 1,772.4 $ 73.1 Liabilities measured at fair value Contingent consideration liabilities $ 28.8 $ — $ — $ 28.8 Derivative instruments 5.1 0.5 — 4.6 Total liabilities measured at fair value $ 33.9 $ 0.5 $ — $ 33.4 (1) Excludes fair value of $301.4 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient. |
Rollforward of Level 3 fair value measurements | The following tables present changes in Level 3 for financial instruments measured at fair value for the three months ended March 31, 2019 and 2018: For the Three Months Ended March 31, 2019 Derivative Other instruments Contingent Fixed long-term assets & consideration (Millions) Maturities investments (1) (liabilities) (liabilities) Balance at January 1, 2018 $ 5.4 $ 63.6 $ (0.5) $ (28.8) Total realized and unrealized gains — 9.3 (5.1) — Foreign currency losses through Other Comprehensive Income — (0.7) — — Purchases — 15.8 — — Sales/Settlements (5.4) — 0.8 — Balance at March 31, 2019 $ — $ 88.0 $ (4.8) $ (28.8) (1) Excludes fair value of $301.7 associated with hedge funds and private equity funds which fair value is measured using the NAV practical expedient. For the Three Months Ended March 31, 2018 Derivative Other instruments Contingent Fixed long-term assets & consideration (Millions) Maturities investments (1) (liabilities) (liabilities) Balance at January 1, 2018 $ 8.0 $ 64.2 $ (6.1) $ (42.8) Total realized and unrealized gains — 0.8 — — Foreign currency losses through Other Comprehensive Income — (0.3) — — Purchases 0.6 0.4 — — Sales/Settlements — (0.2) — — Balance at March 31, 2018 $ 8.6 $ 64.9 $ (6.1) $ (42.8) (1) Excludes fair value of $221.9 associated with hedge funds and private equity funds which fair value is measured at net asset value using the practical expedient. |
Schedule of significant unobservable inputs used for recurring fair value measurements for Level 3 instruments | (Millions, except share prices) March 31, 2019 Description Valuation Technique(s) Fair Value Unobservable Input Private equity securities (1) Share price of recent transaction $ 32.5 Purchase share price $ 40.63 Preferred stock (1) Share price of recent transaction $ 17.5 Purchase price $ 7.74 Private equity securities (1) Multiple of GAAP book value $ 16.8 Book value multiple 1.0X Private debt instrument (1) Purchase price of recent transaction $ 7.8 Purchase price $ 9.0 Private debt instrument (1) Purchase price of recent transaction $ 6.0 Purchase price $ 6.0 Private equity securities (1) Share price of recent transaction $ 5.1 Purchase price $ 7.74 Private equity securities (1) Purchase price of recent transaction $ 1.0 Purchase price $ 10.0 Private equity securities (1) Purchase price of recent transaction $ 0.8 Purchase price $ 0.8 Private equity securities (1) Purchase price of recent transaction $ 0.3 Purchase price $ 0.3 Private debt instrument (1) Purchase price of recent transaction $ 0.2 Purchase price $ 0.2 Currency forwards (2) Third party appraisal $ 0.2 Broker quote $ 0.2 Interest rate cap (2) Third party appraisal $ 0.1 Broker quote $ 0.1 Weather derivatives (2) Third party appraisal $ (1.3) Broker quote $ (1.3) Currency swaps (2) Third party appraisal $ (3.8) Broker quote $ (3.8) Contingent consideration External valuation model $ (28.8) Discounted future payments $ (28.8) (1) As of March 31, 2019, each asset type consists of one security . (2) See Note 11 for discussion of derivative instruments . (Millions) December 31, 2018 Description Valuation technique(s) Fair value Unobservable input Private equity securities (1) Share price of recent transaction $ 32.5 Purchase share price $ 40.63 Private equity securities (1) Multiple of GAAP book value $ 14.7 Book value multiple 0.9X Private debt instrument (1) Purchase price of recent transaction $ 9.0 Purchase price $ 9.0 Private debt instrument (1) Purchase price of recent transaction $ 6.0 Purchase price $ 6.0 Preferred stock (1) Share price of recent transaction $ 4.6 Purchase price $ 1.88 Weather derivatives (2) Third party appraisal $ 3.9 Broker quote $ 3.9 Private equity securities (1) Purchase price of recent transaction $ 0.9 Purchase price $ 1.88 Preferred stock (1) Share price of recent transaction $ 0.8 Purchase price $ 0.8 Private equity securities (1) Share price of recent transaction $ 0.3 Purchase price $ 10.0 Private debt instrument (1) Purchase price of recent transaction $ 0.2 Purchase price $ 0.2 Interest rate cap (2) Third party appraisal $ 0.2 Broker quote $ 0.2 Currency swaps (2) Third party appraisal $ (4.6) Broker quote $ (4.6) Contingent consideration External valuation model $ (28.8) Discounted future payments $ (28.8) (1) As of December 31, 2018, each asset type consists of one security . (2) See Note 11 for discussion of derivative instruments . |
Schedule of financial instruments disclosed, but not carried at fair value | March 31, 2019 December 31, 2018 (Millions) Fair Value (1) Carrying Value Fair Value (1) Carrying Value Liabilities, Mezzanine equity, and Non-controlling interest: 2017 SEK Subordinated Notes $ 297.0 $ 292.7 $ 309.5 $ 303.6 2016 SIG Senior Notes $ 361.7 $ 393.4 $ 347.6 $ 393.2 Series B preference shares $ 200.2 $ 240.6 $ 191.7 $ 232.2 (1) Fair value estimated by internal pricing and considered a Level 3 measurement. |
Debt and standby letters of c_2
Debt and standby letters of credit facilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt and standby letters of credit facilities | |
Schedule of debt outstanding | March 31, Effective December 31, Effective (Millions) Rate (1) Rate (1) 2017 SEK Subordinated Notes, at face value $ 296.6 3.7 % $ 307.6 3.8 % Unamortized issuance costs (3.9) (4.0) 2017 SEK Subordinated Notes, carrying value 292.7 303.6 2016 SIG Senior Notes, at face value 400.0 4.7 % 400.0 4.7 % Unamortized discount (2.5) (2.6) Unamortized issuance costs (4.1) (4.2) 2016 SIG Senior Notes, carrying value 393.4 393.2 Total debt $ 686.1 $ 696.8 (1) Effective rate considers the effect of the debt issuance costs . |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivatives | |
Schedule of Interest Rate Cap collateral balances held | March 31, 2019 Collateral Balances S & P (Millions) Held Rating (1) Barclays Bank Plc $ 0.1 A Nordea Bank Abp 0.1 AA- Total $ 0.2 (1) Standard & Poor's ratings as detailed above are: "AA-" (Very Strong, which is the fourth highest of twenty-three creditworthiness ratings) and "A" (Strong, which is the sixth highest of twenty-three credit worthiness ratings). |
Schedule of classification and amount of fair value of derivatives not designated as hedging instruments within Consolidated Balance Sheets | (Millions) March 31, 2019 December 31, 2018 Asset Liability Asset Liability derivative derivative derivative derivative Notional at fair at fair Notional at fair at fair Derivatives not designated as hedging instruments Value value (1) value (2) Value value (1) value (2) Interest rate cap $ 250.0 $ 0.1 $ — $ 250.0 $ 0.2 $ — Foreign currency swaps $ 90.0 $ — $ 3.8 $ 45.0 $ — $ 4.6 Foreign currency forwards $ 15.0 $ 0.2 $ — $ — $ — $ — Weather derivatives $ 121.6 $ — $ 1.3 $ 150.5 $ 3.9 $ — Equity futures contracts $ (17.0) $ — $ 0.2 $ — $ — $ — Equity put options $ 10.9 $ 0.5 $ — $ 6.2 $ — $ 0.5 (1) Asset derivatives are classified within Other assets within the Company’s Consolidated Balance Sheets at March 31, 2019 and December 31, 2018. (2) Liability derivatives are classified within Other liabilities within the Company’s Consolidated Balance Sheets at March 31, 2019 and December 31, 2018. |
Schedule of classification and net impact on earnings, recognized in Consolidated Statements of (Loss) Income relating to derivatives | For the three months ended (Millions) March 31, Derivatives not designated as Classification of gains hedging instruments (losses) recognized in earnings Interest rate cap Other revenues $ (0.1) $ 0.3 Foreign currency swaps Net foreign exchange gains (losses) $ 0.8 $ 1.3 Foreign currency forwards Net foreign exchange gains (losses) $ 0.2 $ — Weather derivatives Other revenues $ (6.0) $ 1.0 Equity futures contracts Net realized investment gains (losses) $ (0.6) $ — Equity futures contracts Net unrealized investment gains $ (0.2) $ — Equity put options Net unrealized investment gains $ (0.4) $ — |
Common shareholder's equity, me
Common shareholder's equity, mezzanine equity, and non-controlling interests (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Common shareholder's equity, mezzanine equity, and non-controlling interests | |
Schedule of changes in the company's issued and outstanding common shares | Three Months Ended March 31, (Millions) Common shares: Shares issued and outstanding, beginning of period 115,151,251 120,000,000 Issuance of shares to directors and employees 111,052 — Shares issued and outstanding, end of period 115,262,303 120,000,000 |
Schedule of change in non-controlling interest | (Millions) Total Non-controlling interests as of December 31, 2018 $ 1.7 Net income attributable to non-controlling interests 0.4 Other, net 0.1 Non-controlling interests as of March 31, 2019 $ 2.2 (Millions) Total Non-controlling interests as of December 31, 2017 $ 0.2 Net income attributable to non-controlling interests 0.2 Other, net 0.1 Non-controlling interests as of March 31, 2018 $ 0.5 |
Earnings per share (Tables)
Earnings per share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings per share | |
Schedule of computation of basic and diluted earnings per common share | For the three months ended March 31, (Millions, except share and per share information) Basic earnings per share Numerator: Net income $ 104.1 $ 43.3 Less: Income attributable to non-controlling interests (0.4) (0.2) Less: Change in carrying value of Series B preference shares (8.4) — Less: Accrued dividends on Series A redeemable preference shares — (2.6) Net income available for dividends out of undistributed earnings $ 95.3 $ 40.5 Less: Earnings attributable to Series B preference shares (8.9) — Less: Earnings attributable to Series A redeemable preference shares — (1.7) Net income available to Sirius Group common shareholders $ 86.4 $ 38.8 Denominator: Weighted average shares outstanding for basic earnings per share 115,182,331 120,000,000 Basic earnings per share $ 0.75 $ 0.32 Diluted earnings per share Numerator: Net income available to Sirius Group common shareholders $ 86.4 $ 38.8 Add: Change in carrying value of Series B preference shares 8.4 — Net income available to Sirius Group common shareholders on a diluted basis $ 94.8 $ 38.8 Denominator: Weighted average shares outstanding for basic earnings per share 115,182,331 120,000,000 Add: Series B preference shares 11,901,670 — Add: Unvested performance share units and restricted share units 251,313 — Weighted average shares outstanding for diluted earnings per share(1) 127,335,314 120,000,000 Diluted earnings per share $ 0.74 $ 0.32 (1) As at March 31, 2019, there were a total of 19,510,830 of potentially dilutive securities excluded from the calculation of Diluted earnings per share. As at March 31, 2018, there were no potentially dilutive securities excluded from the calculation of Diluted earnings per share. |
Investments in unconsolidated_2
Investments in unconsolidated entities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments in unconsolidated entities | |
Schedule of components of Other long-term investments | (Millions) March 31, 2019 December 31, 2018 Equity method eligible unconsolidated entities, at fair value $ 167.5 $ 169.4 Other unconsolidated investments, at fair value (1) 222.2 195.6 Total Other long-term investments (2) $ 389.7 $ 365.0 (1) Includes Other long-term investments that are not equity method eligible . (2) There were no investments accounted for using the equity method as of March 31, 2019 and December 31, 2018. |
Schedule of investments in equity method eligible unconsolidated entities | Ownership interest at March 31, December 31, Investee Instrument Held BE Reinsurance Limited 25.0 % 25.0 % Common shares BioVentures Investors (Offshore) IV LP 73.0 % 73.0 % Units Camden Partners Strategic Fund V (Cayman), LP 39.4 % 36.4 % Units NEC Cypress Buyer LLC 23.5 % 13.3 % Units New Energy Capital Infrastructure Credit Fund LP(1) 18.3 % 22.9 % Units New Energy Capital Infrastructure Offshore Credit Fund LP(1) 12.2 % 54.9 % Units Scion G7, LP 28.3 % 28.8 % Units Tuckerman Capital V LP 48.3 % 47.6 % Units Tuckerman Capital V Co-Investment I LP 49.5 % 47.7 % Units (1) The ownership percentage of New Energy Capital Infrastructure Credit Fund LP and New Energy Capital Infrastructure Offshore Credit Fund LP was greater than 20% at December 31, 2018 but was less than 20% at March 31, 2019 and is included in the table for comparative purposes. |
Variable interest entities (Tab
Variable interest entities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Variable interest entities | |
Schedule of assets and liabilities related to the consolidated VIEs | ( Millions ) March 31, 2019 December 31, 2018 Assets: Fixed maturity investments, trading at fair value $ 3.9 $ 4.0 Short-term investments, at fair value 0.4 0.3 Cash 0.2 0.2 Total investments 4.5 4.5 Insurance and reinsurance premiums receivable 1.5 0.1 Funds held by ceding companies 4.7 3.7 Deferred acquisition costs 0.5 5.2 Other assets 0.1 0.9 Total assets $ 11.3 $ 14.4 Liabilities Loss and loss adjustment expense reserves $ 3.0 $ 4.6 Unearned insurance and reinsurance premiums 1.7 3.7 Other liabilities 0.1 — Total liabilities $ 4.8 $ 8.3 |
Schedule of total assets of unconsolidated VIEs | Maximum Exposure to Loss Total VIE On-Balance Off-Balance (Millions) Assets Sheet Sheet Total March 31, 2019 Other long-term investments (1) $ 220.6 $ 118.5 $ 25.3 $ 143.8 Total at March 31, 2019 $ 220.6 $ 118.5 $ 25.3 $ 143.8 December 31, 2018 Other long-term investments (1) $ 209.1 $ 103.1 $ 32.0 $ 135.1 Total at December 31, 2018 $ 209.1 $ 103.1 $ 32.0 $ 135.1 (1) Comprised primarily of hedge funds and private equity funds. |
Commitments and contingencies (
Commitments and contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and contingencies | |
Schedule of lease balances within the Consolidated Balance Sheets | ( millions ) Balance Sheet Classification March 31, 2019 Operating lease right-of-use assets Other assets $ 32.0 Current lease liabilities Other liabilities $ 9.8 Non-current lease liabilities Other liabilities $ 24.1 |
Schedule of weighted average remaining lease term and weighted average discount rate | Weighted average lease term (years) as at March 31, 2019: Leased offices 7.0 years Leased equipment 3.0 years Weighted average discount rate: Leased offices 3.8 % Leased equipment 3.4 % |
Schedule of future annual minimum rental payments required under non cancellable leases for office space | (Millions) Future Payments 2019 $ 7.7 2020 8.9 2021 7.4 2022 6.6 2023 4.2 2024 and after 2.0 Total future annual minimum rental payments as at March 31, 2019 36.8 Less: present value discount (2.9) Total lease liability as at March 31, 2019 $ 33.9 |
Summary of significant accoun_3
Summary of significant accounting policies - Recent adopted changes in accouting principle and Recent accounting pronouncements (Details) - USD ($) $ in Millions | Jan. 01, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Summary of significant accounting policies | |||
Lease, Practical Expedients, Package [true false] | true | ||
Lease, Practical Expedient, Use of Hindsight [true false] | false | ||
Lease liability | $ 33.9 | ||
Right-of-use asset | $ 32 | ||
ASU 2016-02 | Restatement | |||
Summary of significant accounting policies | |||
Lease liability | $ 36.8 | ||
Right-of-use asset | $ 34.4 | ||
Cumulative effect of an accounting change | $ 0 |
Significant transactions - East
Significant transactions - Easterly Acquisition Corp. and WRM America Indemnity Company, Inc. (Details) $ / shares in Units, $ in Millions | Nov. 16, 2018USD ($) | Nov. 05, 2018USD ($)$ / sharesemployeeshares | Nov. 02, 2018USD ($)$ / sharesshares | Sep. 30, 2018$ / shares | Aug. 16, 2018USD ($) | Mar. 31, 2019shares | Nov. 04, 2018USD ($) |
Significant transactions | |||||||
Shares issued | shares | 111,052 | ||||||
Preference Share Investors | Sirius Group Private Placement | Series B preference shares | |||||||
Significant transactions | |||||||
Share subscriptions (in shares) | shares | 11,901,670 | ||||||
Merger Agreement | |||||||
Significant transactions | |||||||
Proceeds from merger, private placement and employee stock purchase plan | $ 268 | ||||||
Merger Agreement | Sirius Group Private Placement | |||||||
Significant transactions | |||||||
Number of Times of Diluted Book Value Per Share, Exchange Price of Share | 1.05 | ||||||
Adjusted diluted book value per share | $ / shares | 17.22447 | ||||||
Merger Agreement | ESPP | |||||||
Significant transactions | |||||||
Number of Times of Diluted Book Value Per Share, Exchange Price of Share | 1.05 | ||||||
Minimum number of shares to be purchased | shares | 100 | ||||||
Maximum number of shares to be purchased | shares | 1,000 | ||||||
Number of employees that purchased shares | employee | 405 | ||||||
Number of common shares purchased | shares | 149,236 | ||||||
Share-based compensation expense | $ 2.6 | ||||||
Merger Agreement | CM Bermuda | |||||||
Significant transactions | |||||||
Adjustment to consideration payable | $ 1.6 | ||||||
Reported book value per share (in dollars per share) | $ / shares | $ 16.44 | ||||||
Merger related contractual costs | 9 | ||||||
Merger related legal, advisory and other costs | $ 7.1 | ||||||
Subscription Agreement | Preference Share Investors | Sirius Group Private Placement | |||||||
Significant transactions | |||||||
Warrants Received | shares | 5,418,434 | ||||||
Exercisable period of warrants | 5 years | ||||||
Strike price as a percentage of the per share purchase price | 125.00% | ||||||
Warrant strike price per share | $ / shares | $ 21.53 | ||||||
Cost value of warrants | $ 9.6 | ||||||
Stock issuance costs | 2 | ||||||
Subscription Agreement | Preference Share Investors | Sirius Group Private Placement | Series B preference shares | |||||||
Significant transactions | |||||||
Gross proceeds | 226.1 | ||||||
Value of share subscriptions | $ 195.8 | ||||||
Subscription Agreement | Preference Share Investors | Sirius Group Private Placement | Series B preference shares | Common shares | |||||||
Significant transactions | |||||||
Share subscriptions (in shares) | shares | 1,225,954 | ||||||
Value of share subscriptions | $ 20.8 | ||||||
Redemption Agreement | CM Bermuda | Common shares | |||||||
Significant transactions | |||||||
Value of shares redeemed | $ 164 | ||||||
Stock redeemed (in shares) | shares | 9,519,280 | ||||||
Share price (in dollars per share) | $ / shares | $ 17.22447 | ||||||
Redemption Agreement | IMGAH | |||||||
Significant transactions | |||||||
Redemption amount of preference shares | $ 95 | ||||||
For the first 100 shares | Merger Agreement | ESPP | |||||||
Significant transactions | |||||||
Purchase price of common shares as a percentage of its market value | 85.00% | ||||||
For the next 900 shares | Merger Agreement | ESPP | |||||||
Significant transactions | |||||||
Purchase price of common shares as a percentage of its market value | 100.00% | ||||||
Easterly | Merger Agreement | |||||||
Significant transactions | |||||||
Public shares held by Easterly's public stockholders in trust | $ 39.3 | $ 149 | |||||
Issuance of converted warrants | shares | 6,088,535 | ||||||
Easterly | Merger Agreement | Common shares | |||||||
Significant transactions | |||||||
Number of Times of Diluted Book Value Per Share, Exchange Price of Share | 1.05 | ||||||
Exchange ratio | 0.609 | ||||||
Value of shares redeemed | $ 109.7 | ||||||
Shares issued | shares | 2,280,241 | ||||||
WRM America Indemnity Company, Inc. | |||||||
Significant transactions | |||||||
Percentage of ownership interest acquired | 100.00% | ||||||
Consideration | $ 16.9 | ||||||
Acquisition of intangible assets | $ 3.1 |
Segment information (Details)
Segment information (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2019USD ($)segmentproduct | Mar. 31, 2018USD ($) | |
Segment information | ||
Number of reportable segments | segment | 4 | |
Gross written premiums | $ 622.3 | $ 615.2 |
Net written premiums | 484.8 | 469.4 |
Net earned insurance and reinsurance premiums | 311.9 | 284.5 |
Loss and allocated LAE | (174.5) | (135.4) |
Insurance and reinsurance acquisition expenses | (63.3) | (63) |
Technical profit (loss) | 74.1 | 86.1 |
Unallocated LAE | (9.4) | (5.6) |
Other underwriting expenses | (35.3) | (43.2) |
Underwriting (loss) income | 29.4 | 37.3 |
Service fee revenue | 25.3 | 22.5 |
General and administrative expenses | 24.4 | 14.3 |
Underwriting (loss) income, including net service fee income | 37.7 | 49.2 |
Net investment income | 20.1 | 10.8 |
Net realized investment gains (losses) | 9 | (3.7) |
Net unrealized investment gains | 74 | 16 |
Net foreign exchange gains (losses) | 5.1 | (3.5) |
Other revenue | (5.7) | 0.9 |
General and administrative expenses | (7.4) | (3.7) |
Intangible asset amortization expenses | (3.9) | (3.9) |
Interest expense on debt | (7.6) | (7.7) |
Pre-tax income | $ 121.3 | $ 54.4 |
Underwriting Ratios | ||
Loss ratio | 59.00% | 49.60% |
Acquisition expense ratio | 20.30% | 22.10% |
Other underwriting expense ratio | 11.30% | 15.20% |
Combined ratio | 90.60% | 86.90% |
Goodwill and intangible assets | $ 592.3 | $ 613.6 |
Managing general underwriters | ||
Segment information | ||
General and administrative expenses | 17 | 10.6 |
Corporate Elimination | ||
Segment information | ||
Insurance and reinsurance acquisition expenses | 10.3 | 10.3 |
Technical profit (loss) | 10.3 | 10.3 |
Unallocated LAE | (3.4) | |
Other underwriting expenses | (2.7) | (8.4) |
Underwriting (loss) income | 4.2 | 1.9 |
Service fee revenue | (11) | (10.3) |
Corporate Elimination | Managing general underwriters | ||
Segment information | ||
Unallocated LAE | 4.1 | |
Other underwriting expenses | 2.7 | 8.4 |
Global Property | Reportable segments | ||
Segment information | ||
Gross written premiums | 330.7 | 346.6 |
Net written premiums | 241.3 | 247.2 |
Net earned insurance and reinsurance premiums | 139.7 | 136.1 |
Loss and allocated LAE | (62.6) | (70.4) |
Insurance and reinsurance acquisition expenses | (25.8) | (29.3) |
Technical profit (loss) | 51.3 | 36.4 |
Unallocated LAE | (2.1) | (1.9) |
Other underwriting expenses | (16.2) | (17.4) |
Underwriting (loss) income | 33 | 17.1 |
Underwriting (loss) income, including net service fee income | $ 33 | $ 17.1 |
Underwriting Ratios | ||
Loss ratio | 46.30% | 53.10% |
Acquisition expense ratio | 18.50% | 21.50% |
Other underwriting expense ratio | 11.60% | 12.80% |
Combined ratio | 76.40% | 87.40% |
Global A&H | Reportable segments | ||
Segment information | ||
Gross written premiums | $ 169.3 | $ 145.6 |
Net written premiums | 134.9 | 115.5 |
Net earned insurance and reinsurance premiums | 96.1 | 88 |
Loss and allocated LAE | (63.2) | (45.8) |
Insurance and reinsurance acquisition expenses | (26.6) | (29.2) |
Technical profit (loss) | 6.3 | 13 |
Unallocated LAE | (1.5) | (1.6) |
Other underwriting expenses | (6.1) | (8) |
Underwriting (loss) income | (1.3) | 3.4 |
Service fee revenue | 36.3 | 32.8 |
Underwriting (loss) income, including net service fee income | $ 12 | $ 18.3 |
Underwriting Ratios | ||
Loss ratio | 67.30% | 53.90% |
Acquisition expense ratio | 27.70% | 33.20% |
Other underwriting expense ratio | 6.30% | 9.10% |
Combined ratio | 101.30% | 96.20% |
Goodwill and intangible assets | $ 584.2 | $ 608.6 |
Global A&H | Reportable segments | Managing general underwriters | ||
Segment information | ||
Unallocated LAE | (4.1) | |
Other underwriting expenses | (2.7) | (8.4) |
General and administrative expenses | $ 16.2 | 9.5 |
Specialty & Casualty | Reportable segments | ||
Segment information | ||
Number of core products | product | 4 | |
Gross written premiums | $ 120.9 | 115.5 |
Net written premiums | 108.2 | 100.6 |
Net earned insurance and reinsurance premiums | 75.7 | 54.4 |
Loss and allocated LAE | (47.6) | (21.6) |
Insurance and reinsurance acquisition expenses | (20.5) | (14.1) |
Technical profit (loss) | 7.6 | 18.7 |
Unallocated LAE | (1.9) | (1.2) |
Other underwriting expenses | (8.2) | (8) |
Underwriting (loss) income | (2.5) | 9.5 |
Underwriting (loss) income, including net service fee income | $ (2.5) | $ 9.5 |
Underwriting Ratios | ||
Loss ratio | 65.40% | 41.90% |
Acquisition expense ratio | 27.10% | 25.90% |
Other underwriting expense ratio | 10.80% | 14.70% |
Combined ratio | 103.30% | 82.50% |
Specialty & Casualty | Reportable segments | Minimum | ||
Segment information | ||
Pre-agreed domestic and export sales of goods and services coverage period | 60 days | |
Specialty & Casualty | Reportable segments | Maximum | ||
Segment information | ||
Pre-agreed domestic and export sales of goods and services coverage period | 120 days | |
Runoff & Other | Reportable segments | ||
Segment information | ||
Gross written premiums | $ 1.4 | $ 7.5 |
Net written premiums | 0.4 | 6.1 |
Net earned insurance and reinsurance premiums | 0.4 | 6 |
Loss and allocated LAE | (1.1) | 2.4 |
Insurance and reinsurance acquisition expenses | (0.7) | (0.7) |
Technical profit (loss) | (1.4) | 7.7 |
Unallocated LAE | (0.5) | (0.9) |
Other underwriting expenses | (2.1) | (1.4) |
Underwriting (loss) income | (4) | 5.4 |
Underwriting (loss) income, including net service fee income | (4.8) | 4.3 |
Underwriting Ratios | ||
Goodwill and intangible assets | 8.1 | 5 |
Runoff & Other | Reportable segments | Managing general underwriters | ||
Segment information | ||
General and administrative expenses | $ 0.8 | $ 1.1 |
Segment information - Net premi
Segment information - Net premiums written by client location and underwriting location by reportable segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | $ 484.8 | $ 469.4 |
Client location: United States | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 241.6 | 217.9 |
Client location: Europe | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 157.7 | 168.2 |
Client location: Canada, the Caribbean, Bermuda and Latin America | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 33.9 | 30.6 |
Client location: Asia and Other | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 51.6 | 52.7 |
Underwriting location: United States | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 60.9 | 32.3 |
Underwriting location: Europe | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 272.9 | 277.1 |
Underwriting location: Canada, the Caribbean, Bermuda and Latin America | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 133.3 | 143 |
Underwriting location: Asia and Other | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 17.7 | 17 |
Global Property | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 241.3 | 247.2 |
Global Property | Client location: United States | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 61.9 | 87 |
Global Property | Client location: Europe | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 124.8 | 106.3 |
Global Property | Client location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 24.5 | 23.2 |
Global Property | Client location: Asia and Other | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 30.1 | 30.7 |
Global Property | Underwriting location: United States | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 8 | 5.3 |
Global Property | Underwriting location: Europe | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 154.6 | 136.5 |
Global Property | Underwriting location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 62.4 | 89.8 |
Global Property | Underwriting location: Asia and Other | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 16.3 | 15.6 |
Global A&H | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 134.9 | 115.5 |
Global A&H | Client location: United States | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 111.1 | 87.5 |
Global A&H | Client location: Europe | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 8 | 11.6 |
Global A&H | Client location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 5 | 4.8 |
Global A&H | Client location: Asia and Other | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 10.8 | 11.6 |
Global A&H | Underwriting location: United States | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 40.3 | 21 |
Global A&H | Underwriting location: Europe | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 63.6 | 68.6 |
Global A&H | Underwriting location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 30.7 | 25.7 |
Global A&H | Underwriting location: Asia and Other | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 0.3 | 0.2 |
Specialty & Casualty | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 108.2 | 100.6 |
Specialty & Casualty | Client location: United States | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 68.4 | 37.3 |
Specialty & Casualty | Client location: Europe | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 24.8 | 50.3 |
Specialty & Casualty | Client location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 4.4 | 2.6 |
Specialty & Casualty | Client location: Asia and Other | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 10.6 | 10.4 |
Specialty & Casualty | Underwriting location: United States | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 12.4 | (0.1) |
Specialty & Casualty | Underwriting location: Europe | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 54.6 | 72 |
Specialty & Casualty | Underwriting location: Canada, the Caribbean, Bermuda and Latin America | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 40.2 | 27.5 |
Specialty & Casualty | Underwriting location: Asia and Other | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 1 | 1.2 |
Runoff & Other | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 0.4 | 6.1 |
Runoff & Other | Client location: United States | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 0.2 | 6.1 |
Runoff & Other | Client location: Europe | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 0.1 | |
Runoff & Other | Client location: Asia and Other | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 0.1 | |
Runoff & Other | Underwriting location: United States | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 0.2 | $ 6.1 |
Runoff & Other | Underwriting location: Europe | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | 0.1 | |
Runoff & Other | Underwriting location: Asia and Other | Reportable segments | ||
Net premiums written by client location and underwriting location by reportable segment | ||
Net written premiums | $ 0.1 |
Reserves for unpaid losses an_3
Reserves for unpaid losses and loss adjustment expenses (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Summary of the loss and LAE reserve activities | ||
Gross beginning balance | $ 2,016.7 | $ 1,898.5 |
Less beginning reinsurance recoverable on unpaid losses | (350.2) | (319.7) |
Net loss and LAE reserve balance | 1,666.5 | 1,578.8 |
Losses and LAE incurred relating to: | ||
Current year losses | 167.3 | 143.5 |
Prior years losses | 16.6 | (2.5) |
Total net incurred losses and LAE | 183.9 | 141 |
Foreign currency translation adjustment to net loss and LAE reserves | (3.4) | 6.7 |
Loss and LAE paid relating to: | ||
Current year losses | 36.2 | 31.3 |
Prior years losses | 183.8 | 147.1 |
Total loss and LAE payments | 220 | 178.4 |
Net ending balance | 1,627 | 1,548.1 |
Plus ending reinsurance recoverable on unpaid losses | 349.3 | 327.8 |
Gross ending balance | $ 1,976.3 | $ 1,875.9 |
Reserves for unpaid losses an_4
Reserves for unpaid losses and loss adjustment expenses - By segment (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Reserves for unpaid losses and loss adjustment expenses | ||
Unfavorable (favorable) loss reserve development | $ 16.6 | $ (2.5) |
Global Property | ||
Reserves for unpaid losses and loss adjustment expenses | ||
Unfavorable (favorable) loss reserve development | 11.6 | 17.2 |
Global Property | Natural catastrophes | ||
Reserves for unpaid losses and loss adjustment expenses | ||
Unfavorable (favorable) loss reserve development | 6.4 | |
Hurricanes Harvey, Irma and Maria | ||
Reserves for unpaid losses and loss adjustment expenses | ||
Unfavorable (favorable) loss reserve development | 15.6 | |
Global A&H | ||
Reserves for unpaid losses and loss adjustment expenses | ||
Unfavorable (favorable) loss reserve development | 5.1 | (3.7) |
Runoff & Other | ||
Reserves for unpaid losses and loss adjustment expenses | ||
Unfavorable (favorable) loss reserve development | 1.2 | (8.9) |
Specialty & Casualty | ||
Reserves for unpaid losses and loss adjustment expenses | ||
Unfavorable (favorable) loss reserve development | $ (1.3) | $ (7.1) |
Third party reinsurance (Detail
Third party reinsurance (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Third party reinsurance | ||
Reinsurance recoverable on paid losses | $ 50.5 | $ 55 |
Reinsurance recoverable on unpaid losses | $ 349.3 | $ 350.2 |
Investment securities - Net Inv
Investment securities - Net Investment Income (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net Investment Income | ||
Total investment income | $ 23.8 | $ 13.1 |
Investment expenses | (3.7) | (2.3) |
Net investment income | 20.1 | 10.8 |
Fixed maturity investments | ||
Net Investment Income | ||
Total investment income | 16.8 | 9.9 |
Short-term investments | ||
Net Investment Income | ||
Total investment income | 0.4 | 0.8 |
Equity securities | ||
Net Investment Income | ||
Total investment income | 2.7 | 1.2 |
Other long-term investments | ||
Net Investment Income | ||
Total investment income | $ 3.9 | $ 1.2 |
Investment securities - Net Rea
Investment securities - Net Realized and Unrealized Investment gains (losses) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net Realized and Unrealized Investment Gains (losses) | ||
Gross realized gains | $ 14.1 | $ 8.4 |
Gross realized (losses) | (5.1) | (12.1) |
Net realized gains (losses) on investments | 9 | (3.7) |
Net unrealized gains on investments | 74 | 16 |
Net realized and unrealized investment gains on investments | 83 | 12.3 |
Realized gains (losses) due to foreign currency | 10.9 | (1.1) |
Unrealized gains due to foreign currency | 25 | 18.9 |
Total unrealized investment (losses) gains - Level 3 investments | 8.8 | 0.4 |
Fixed maturity investments | ||
Net Realized and Unrealized Investment Gains (losses) | ||
Net realized gains (losses) on investments | 6.8 | (2.8) |
Net unrealized gains on investments | 29.7 | 3 |
Short-term investments | ||
Net Realized and Unrealized Investment Gains (losses) | ||
Net realized gains (losses) on investments | 0.1 | |
Net unrealized gains on investments | 2.7 | |
Equity securities | ||
Net Realized and Unrealized Investment Gains (losses) | ||
Net realized gains (losses) on investments | (0.6) | (1.5) |
Net unrealized gains on investments | 25.1 | 6.4 |
Other long-term investments | ||
Net Realized and Unrealized Investment Gains (losses) | ||
Net realized gains (losses) on investments | 3.3 | 0.6 |
Net unrealized gains on investments | 17.1 | 6.6 |
Total unrealized investment (losses) gains - Level 3 investments | 8.8 | $ 0.4 |
Derivative instruments | ||
Net Realized and Unrealized Investment Gains (losses) | ||
Net realized gains (losses) on investments | (0.6) | |
Net unrealized gains on investments | $ (0.6) |
Investment securities - Fixed m
Investment securities - Fixed maturity investments (Details) - Fixed maturity investments - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Fixed maturity investments | ||
Cost or amortized cost | $ 1,814.8 | $ 1,952.9 |
Gross unrealized gains | 9.3 | 4.3 |
Gross unrealized losses | (12.4) | (28.4) |
Net foreign currency gains (losses) | 34.7 | 20.4 |
Fair value | $ 1,846.4 | 1,949.2 |
Weighted average duration of fixed income portfolio including short-term investments | 1 year 7 months 6 days | |
Weighted average duration of fixed income portfolio excluding short-term investments | 2 years 2 months 12 days | |
Cost or amortized cost | ||
Cost or amortized cost due in one year or less | $ 241.7 | 249.6 |
Cost or amortized cost due after one year through five years | 554.3 | 635.6 |
Cost or amortized cost due after five years through ten years | 10.9 | 26.2 |
Cost or amortized cost due after ten years | 0.1 | |
Fair Value | ||
Fair value due in one year or less | 250 | 254.6 |
Fair value due after one year through five years | 566.8 | 636.4 |
Fair value due after five years through ten years | 10.8 | 25.7 |
Fair value due after ten years | 0.1 | |
AAA | ||
Fixed maturity investments | ||
Fair value | 575.6 | 602 |
AA | ||
Fixed maturity investments | ||
Fair value | 799.8 | 818 |
A | ||
Fixed maturity investments | ||
Fair value | 254.2 | 290.5 |
BBB | ||
Fixed maturity investments | ||
Fair value | 154.4 | 167.4 |
Other | ||
Fixed maturity investments | ||
Fair value | 62.4 | 71.3 |
Corporate debt securities | ||
Fixed maturity investments | ||
Cost or amortized cost | 614.6 | 694.1 |
Gross unrealized gains | 3 | 1.4 |
Gross unrealized losses | (2.7) | (7.3) |
Net foreign currency gains (losses) | 13.2 | 7.6 |
Fair value | 628.1 | 695.8 |
Asset-backed securities | ||
Fixed maturity investments | ||
Cost or amortized cost | 476.7 | 496.3 |
Gross unrealized gains | 0.3 | 0.1 |
Gross unrealized losses | (3.9) | (3.8) |
Net foreign currency gains (losses) | 3.8 | 1.9 |
Fair value | 476.9 | 494.5 |
Residential mortgage-backed securities | ||
Fixed maturity investments | ||
Cost or amortized cost | 415.1 | 413 |
Gross unrealized gains | 5.2 | 1.7 |
Gross unrealized losses | (3.9) | (7.1) |
Net foreign currency gains (losses) | 9.4 | 5.9 |
Fair value | 425.8 | 413.5 |
U.S. government and government agency | ||
Fixed maturity investments | ||
Cost or amortized cost | 151.9 | 163.9 |
Gross unrealized gains | 0.3 | 0.3 |
Gross unrealized losses | (0.2) | (0.5) |
Net foreign currency gains (losses) | 6.4 | 4.2 |
Fair value | 158.4 | 167.9 |
Commercial mortgage-backed securities | ||
Fixed maturity investments | ||
Cost or amortized cost | 113.6 | 117.7 |
Gross unrealized gains | 0.4 | 0.2 |
Gross unrealized losses | (1.6) | (2.7) |
Net foreign currency gains (losses) | 1.2 | 0.7 |
Fair value | 113.6 | 115.9 |
Non-U.S. government and government agency | ||
Fixed maturity investments | ||
Cost or amortized cost | 37.8 | 50.6 |
Gross unrealized losses | (0.1) | (0.2) |
Net foreign currency gains (losses) | 0.8 | (0.1) |
Fair value | 38.5 | 50.3 |
Preferred stocks | ||
Fixed maturity investments | ||
Cost or amortized cost | 2.5 | 14.5 |
Gross unrealized gains | 0.1 | 0.6 |
Gross unrealized losses | (6.8) | |
Net foreign currency gains (losses) | (0.1) | 0.2 |
Fair value | 2.5 | 8.5 |
Cost or amortized cost | ||
Cost or amortized cost without single maturity date | 2.5 | 14.5 |
Fair Value | ||
Fair value without single maturity date | 2.5 | 8.5 |
U.S. States, municipalities, and political subdivision | ||
Fixed maturity investments | ||
Cost or amortized cost | 2.6 | 2.8 |
Fair value | 2.6 | 2.8 |
Asset-backed securities | ||
Cost or amortized cost | ||
Cost or amortized cost without single maturity date | 1,005.4 | 1,026.9 |
Fair Value | ||
Fair value without single maturity date | 1,016.3 | 1,023.9 |
Sub-prime securities | ||
Fixed maturity investments | ||
Fair value | 37.6 | 42.6 |
Sub-prime securities | AAA | ||
Fixed maturity investments | ||
Fair value | 12.7 | 17.1 |
Sub-prime securities | AA | ||
Fixed maturity investments | ||
Fair value | 11.5 | 9.8 |
Sub-prime securities | A | ||
Fixed maturity investments | ||
Fair value | 4.4 | 6 |
Sub-prime securities | BBB | ||
Fixed maturity investments | ||
Fair value | 4.1 | 4.7 |
Sub-prime securities | Other | ||
Fixed maturity investments | ||
Fair value | $ 4.9 | $ 5 |
Investment securities - Equity
Investment securities - Equity securities and Other long-term investments (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Equity securities | ||
Equity securities and Other long-term investments | ||
Cost or amortized cost | $ 398.4 | $ 409.4 |
Gross unrealized gains | 26.2 | 17.8 |
Gross unrealized losses | (38.7) | (50.8) |
Net foreign currency gains (losses) | 8.5 | 3.6 |
Fair value | 394.4 | 380 |
Other long-term investments | ||
Equity securities and Other long-term investments | ||
Cost or amortized cost | 351.7 | 337.6 |
Gross unrealized gains | 48.3 | 32.6 |
Gross unrealized losses | (20.5) | (13.5) |
Net foreign currency gains (losses) | 10.2 | 8.3 |
Fair value | 389.7 | 365 |
Other long-term investments | Hedge funds and private equity funds | ||
Equity securities and Other long-term investments | ||
Fair value | 301.7 | 301.4 |
Other long-term investments | Limited liability companies and private equity securities | ||
Equity securities and Other long-term investments | ||
Fair value | $ 88 | $ 63.6 |
Investment securities - Hedge F
Investment securities - Hedge Funds and Private Equity Funds (Details) - Other long-term investments $ in Millions | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | |
Equity securities and Other long-term investments | ||
Largest investment in single fund | $ 50.8 | $ 54.8 |
Other long-term investments | 389.7 | 365 |
Hedge funds and private equity funds | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 301.7 | 301.4 |
Unfunded Commitments | $ 53.2 | 82 |
Hedge funds | ||
Equity securities and Other long-term investments | ||
Number of investment funds in which the investments are held | item | 9 | |
Other long-term investments | $ 123.1 | 118.3 |
Unfunded Commitments | 0 | |
Long/short multi-sector | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 49.5 | 41 |
Distressed mortgage credit | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 50.8 | 54.8 |
Private credit | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 20.3 | 20 |
Other | ||
Equity securities and Other long-term investments | ||
Other long-term investments | $ 2.5 | 2.5 |
Private equity securities | ||
Equity securities and Other long-term investments | ||
Number of investment funds in which the investments are held | item | 28 | |
Other long-term investments | $ 178.6 | 183.1 |
Unfunded Commitments | 53.2 | 82 |
Energy infrastructure & services | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 87.5 | 93.7 |
Unfunded Commitments | 30.7 | 54.2 |
Multi-sector | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 9.2 | 9 |
Unfunded Commitments | 0.7 | 0.7 |
Healthcare | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 31.7 | 31.7 |
Unfunded Commitments | 15.6 | 15.6 |
Life settlement | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 23.9 | 23.7 |
Manufacturing/Industrial | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 23.6 | 23.6 |
Unfunded Commitments | 3.1 | 10.4 |
Private equity secondaries | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 1.1 | 1.1 |
Unfunded Commitments | 1.1 | 1.1 |
Real estate | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 0.3 | $ 0.3 |
Other | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 1.3 | |
Unfunded Commitments | $ 2 |
Investment securities - Hedge_2
Investment securities - Hedge Funds redemption frequency and Private Equity Fund lock-up period (Details) - Other long-term investments - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Equity securities and Other long-term investments | ||
Other long-term investments | $ 389.7 | $ 365 |
Hedge funds | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 123.1 | 118.3 |
Outstanding distribution from investments | 0 | |
Hedge funds | Monthly Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 32.7 | |
Hedge funds | Quarterly Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 0.8 | |
Hedge funds | Semi-annual Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 0.8 | |
Hedge funds | Annual Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 88.8 | |
Private equity securities | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 178.6 | 183.1 |
Outstanding distribution from investments | 53.2 | $ 82 |
Private equity securities | Lock up period of 1 - 3 years | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 12.6 | |
Private equity securities | Lock up period of 3 - 5 years | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 4.3 | |
Private equity securities | Lock up period of 5 - 10 years | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 161.7 | |
30-59 days notice | Hedge funds | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 0.8 | |
30-59 days notice | Hedge funds | Quarterly Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 0.8 | |
60-89 days notice | Hedge funds | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 50.4 | |
60-89 days notice | Hedge funds | Monthly Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 32.7 | |
60-89 days notice | Hedge funds | Semi-annual Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 0.8 | |
60-89 days notice | Hedge funds | Annual Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 16.9 | |
90-119 days notice | Hedge funds | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 51.6 | |
90-119 days notice | Hedge funds | Annual Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 51.6 | |
120+ days notice | Hedge funds | ||
Equity securities and Other long-term investments | ||
Other long-term investments | 20.3 | |
120+ days notice | Hedge funds | Annual Redemption Frequency | ||
Equity securities and Other long-term investments | ||
Other long-term investments | $ 20.3 |
Investment securities - Investm
Investment securities - Investments Held on Deposit or as Collateral and Unsettled investment purchases and sales (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Marketable securities | ||
Investments held in trusts | $ 764.9 | $ 792.4 |
Investments held in trusts - fair value | 779.5 | 801.2 |
Accounts payable | ||
Marketable securities | ||
Unsettled investment purchases | 9.9 | 3.2 |
Accounts receivable | ||
Marketable securities | ||
Unsettled investment sales | 1.7 | $ 5 |
Interest rate cap | Derivatives not designated as hedging instruments | ||
Marketable securities | ||
Collateral balances held | $ 0.2 |
Fair value measurements - Fair
Fair value measurements - Fair Value Measurements by Level (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Assets measured at fair value | ||
Fixed maturity investments, at fair value | $ 1,846.4 | $ 1,949.2 |
Short-term investments | 833.6 | 715.5 |
Equity securities | 394.4 | 380 |
Other long-term investments | 88 | 63.6 |
Total investments | 3,162.4 | 3,108.3 |
Derivative instruments | 0.8 | 4.1 |
Total assets measured at fair value | 3,163.2 | 3,112.4 |
Liabilities measured at fair value | ||
Contingent consideration liabilities | 28.8 | 28.8 |
Derivative instruments | 5.3 | 5.1 |
Total liabilities measured at fair value | 34.1 | 33.9 |
U.S. government and government agency | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 158.4 | 167.9 |
Corporate debt securities | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 628.1 | 695.8 |
Residential mortgage-backed securities | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 425.8 | 494.5 |
Asset-backed securities | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 476.9 | 413.5 |
Commercial mortgage-backed securities | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 113.6 | 115.9 |
Non-U.S. government and government agency | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 38.5 | 50.3 |
Preferred stocks | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 2.5 | 8.5 |
U.S. States, municipalities, and political subdivision | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 2.6 | 2.8 |
Hedge funds and private equity funds | ||
Liabilities measured at fair value | ||
Fair value of hedges | 301.7 | 301.4 |
Level 1 | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 190.9 | 207.6 |
Short-term investments | 792.5 | 679.3 |
Equity securities | 393.5 | 380 |
Total investments | 1,376.9 | 1,266.9 |
Derivative instruments | 0.5 | |
Total assets measured at fair value | 1,377.4 | 1,266.9 |
Liabilities measured at fair value | ||
Derivative instruments | 0.2 | 0.5 |
Total liabilities measured at fair value | 0.2 | 0.5 |
Level 1 | U.S. government and government agency | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 157 | 164.7 |
Level 1 | Non-U.S. government and government agency | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 33.9 | 42.9 |
Level 2 | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 1,655.5 | 1,736.2 |
Short-term investments | 41.1 | 36.2 |
Equity securities | 0.9 | |
Total investments | 1,697.5 | 1,772.4 |
Total assets measured at fair value | 1,697.5 | 1,772.4 |
Level 2 | U.S. government and government agency | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 1.4 | 3.2 |
Level 2 | Corporate debt securities | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 628.1 | 695.8 |
Level 2 | Residential mortgage-backed securities | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 425.8 | 494.5 |
Level 2 | Asset-backed securities | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 476.9 | 413.5 |
Level 2 | Commercial mortgage-backed securities | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 113.6 | 115.9 |
Level 2 | Non-U.S. government and government agency | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 4.6 | 7.4 |
Level 2 | Preferred stocks | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 2.5 | 3.1 |
Level 2 | U.S. States, municipalities, and political subdivision | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 2.6 | 2.8 |
Level 3 | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | 5.4 | |
Other long-term investments | 88 | 63.6 |
Total investments | 88 | 69 |
Derivative instruments | 0.3 | 4.1 |
Total assets measured at fair value | 88.3 | 73.1 |
Liabilities measured at fair value | ||
Contingent consideration liabilities | 28.8 | 28.8 |
Derivative instruments | 5.1 | 4.6 |
Total liabilities measured at fair value | $ 33.9 | 33.4 |
Level 3 | Preferred stocks | ||
Assets measured at fair value | ||
Fixed maturity investments, at fair value | $ 5.4 |
Fair value measurements - Rollf
Fair value measurements - Rollforward of Level 3 Fair Value Measurements (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Rollforward of Level 3 Fair Value Measurements | ||
Transfers from Level 2 to Level 3, Assets | $ 0 | $ 0 |
Transfers out | 0 | 0 |
Rollforward of Level 3, Derivative instruments assets & (liabilities) | ||
Balance at beginning of the period | (0.5) | (6.1) |
Total realized and unrealized gains (losses) | (5.1) | |
Sales/Settlements | 0.8 | |
Balance at end of the period | (4.8) | (6.1) |
Contingent consideration (liabilities) | ||
Rollforward of Level 3, (liabilities) | ||
Balance at beginning of the period | (28.8) | (42.8) |
Balance at end of the period | (28.8) | (42.8) |
Fixed maturity investments | ||
Rollforward of Level 3 Fair Value Measurements | ||
Balance at beginning of the period | 5.4 | 8 |
Purchases | 0.6 | |
Sales/settlements | (5.4) | |
Balance at end of the period | 8.6 | |
Other long-term investments | ||
Rollforward of Level 3 Fair Value Measurements | ||
Balance at beginning of the period | 63.6 | 64.2 |
Total realized and unrealized gains | 9.3 | 0.8 |
Purchases | 15.8 | 0.4 |
Sales/settlements | (0.2) | |
Balance at end of the period | 88 | 64.9 |
Other long-term investments | Foreign currency losses | ||
Rollforward of Level 3 Fair Value Measurements | ||
Losses through Other Comprehensive Income | (0.7) | (0.3) |
Hedge funds and private equity funds | ||
Rollforward of Level 3, (liabilities) | ||
Fair value of hedges | $ 301.7 | $ 221.9 |
Fair value measurements - Trans
Fair value measurements - Transfers between levels (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair value measurements | ||
Transfers from Level 3 to Level 2, Assets | $ 0 | $ 0 |
Transfers from Level 2 to Level 3, Assets | $ 0 | $ 0 |
Fair value measurements - Signi
Fair value measurements - Significant Unobservable Inputs (Details) $ in Millions | Mar. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares |
Significant Unobservable Inputs | ||
Equity securities | $ 394.4 | $ 380 |
Derivative assets | 0.8 | 4.1 |
Derivative liabilities | (5.3) | (5.1) |
Contingent consideration | (28.8) | (28.8) |
Level 3 | ||
Significant Unobservable Inputs | ||
Derivative assets | 0.3 | 4.1 |
Derivative liabilities | (5.1) | (4.6) |
Contingent consideration | (28.8) | (28.8) |
Level 3 | Share price of recent transaction | Private equity securities | ||
Significant Unobservable Inputs | ||
Equity securities | 32.5 | 32.5 |
Level 3 | Share price of recent transaction | Private equity securities 1 | ||
Significant Unobservable Inputs | ||
Equity securities | 5.1 | 0.3 |
Level 3 | Share price of recent transaction | Preferred stocks | ||
Significant Unobservable Inputs | ||
Equity securities | $ 17.5 | 4.6 |
Level 3 | Share price of recent transaction | Preferred stock 1 | ||
Significant Unobservable Inputs | ||
Equity securities | $ 0.8 | |
Level 3 | Share price of recent transaction | Purchase share price | Private equity securities | ||
Significant Unobservable Inputs | ||
Equity Securities, Input | $ / shares | 40.63 | 40.63 |
Level 3 | Share price of recent transaction | Purchase price | Private equity securities 1 | ||
Significant Unobservable Inputs | ||
Equity Securities, Input | $ / shares | 7.74 | 10 |
Level 3 | Share price of recent transaction | Purchase price | Preferred stocks | ||
Significant Unobservable Inputs | ||
Equity Securities, Input | $ / shares | 7.74 | 1.88 |
Level 3 | Share price of recent transaction | Purchase price | Preferred stock 1 | ||
Significant Unobservable Inputs | ||
Equity Securities, Input | $ / shares | 0.8 | |
Level 3 | Multiple of GAAP book value | Private equity securities | ||
Significant Unobservable Inputs | ||
Equity securities | $ 16.8 | $ 14.7 |
Level 3 | Multiple of GAAP book value | Book value multiple | Private equity securities | ||
Significant Unobservable Inputs | ||
Equity Securities, Input | $ / shares | 1 | 0.9 |
Level 3 | Purchase price of recent transaction | Private equity securities | ||
Significant Unobservable Inputs | ||
Equity securities | $ 1 | $ 0.9 |
Level 3 | Purchase price of recent transaction | Private equity securities 1 | ||
Significant Unobservable Inputs | ||
Equity securities | 0.8 | |
Level 3 | Purchase price of recent transaction | Private equity securities 2 | ||
Significant Unobservable Inputs | ||
Equity securities | 0.3 | |
Level 3 | Purchase price of recent transaction | Private debt instrument | ||
Significant Unobservable Inputs | ||
Private debt instrument | 7.8 | 9 |
Level 3 | Purchase price of recent transaction | Private debt instrument 1 | ||
Significant Unobservable Inputs | ||
Private debt instrument | 6 | 6 |
Level 3 | Purchase price of recent transaction | Private debt instrument 2 | ||
Significant Unobservable Inputs | ||
Private debt instrument | $ 0.2 | |
Level 3 | Purchase price of recent transaction | Private debt instrument 3 | ||
Significant Unobservable Inputs | ||
Private debt instrument | $ 0.2 | |
Level 3 | Purchase price of recent transaction | Purchase price | Private equity securities | ||
Significant Unobservable Inputs | ||
Equity Securities, Input | $ / shares | 10 | 1.88 |
Level 3 | Purchase price of recent transaction | Purchase price | Private equity securities 1 | ||
Significant Unobservable Inputs | ||
Equity Securities, Input | $ / shares | 0.8 | |
Level 3 | Purchase price of recent transaction | Purchase price | Private equity securities 2 | ||
Significant Unobservable Inputs | ||
Equity Securities, Input | $ / shares | 0.30 | |
Level 3 | Purchase price of recent transaction | Purchase price | Private debt instrument | ||
Significant Unobservable Inputs | ||
Debt instrument, Input | $ / shares | 9 | 9 |
Level 3 | Purchase price of recent transaction | Purchase price | Private debt instrument 1 | ||
Significant Unobservable Inputs | ||
Debt instrument, Input | $ / shares | 6 | 6 |
Level 3 | Purchase price of recent transaction | Purchase price | Private debt instrument 2 | ||
Significant Unobservable Inputs | ||
Debt instrument, Input | $ / shares | 0.2 | |
Level 3 | Purchase price of recent transaction | Purchase price | Private debt instrument 3 | ||
Significant Unobservable Inputs | ||
Debt instrument, Input | $ / shares | 0.2 | |
Level 3 | Third party appraisal | Weather derivatives | ||
Significant Unobservable Inputs | ||
Derivative assets | $ 3.9 | |
Derivative liabilities | $ (1.3) | |
Level 3 | Third party appraisal | Interest rate cap | ||
Significant Unobservable Inputs | ||
Derivative assets | 0.1 | 0.2 |
Level 3 | Third party appraisal | Foreign currency swaps | ||
Significant Unobservable Inputs | ||
Derivative liabilities | (3.8) | $ (4.6) |
Level 3 | Third party appraisal | Effective yield | Foreign currency forwards | ||
Significant Unobservable Inputs | ||
Derivative assets | $ 0.2 | |
Level 3 | Third party appraisal | Broker quote | Foreign currency forwards | ||
Significant Unobservable Inputs | ||
Derivative assets, Input | $ / shares | 0.2 | |
Level 3 | Third party appraisal | Broker quote | Weather derivatives | ||
Significant Unobservable Inputs | ||
Derivative assets, Input | $ / shares | 3.9 | |
Derivative liabilities, Input | $ / shares | (1.3) | |
Level 3 | Third party appraisal | Broker quote | Interest rate cap | ||
Significant Unobservable Inputs | ||
Derivative assets, Input | $ / shares | 0.1 | 0.2 |
Level 3 | Third party appraisal | Broker quote | Foreign currency swaps | ||
Significant Unobservable Inputs | ||
Derivative liabilities, Input | $ / shares | (3.8) | (4.60) |
Level 3 | External valuation model | ||
Significant Unobservable Inputs | ||
Contingent consideration | $ (28.8) | $ (28.8) |
Level 3 | External valuation model | Discounted future payments | ||
Significant Unobservable Inputs | ||
Contingent consideration, Input | $ / shares | (28.80) | (28.80) |
Fair value measurements - Finan
Fair value measurements - Financial instruments disclosed, but not carried at fair value (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Financial instruments not carried at fair value | ||
Debt | $ 686.1 | $ 696.8 |
Carrying Value | ||
Financial instruments not carried at fair value | ||
Redeemable preference shares | 240.6 | 232.2 |
2017 SEK Subordinated Notes | ||
Financial instruments not carried at fair value | ||
Debt | 292.7 | 303.6 |
2017 SEK Subordinated Notes | Carrying Value | ||
Financial instruments not carried at fair value | ||
Debt | 292.7 | 303.6 |
2016 SIG Senior Notes | ||
Financial instruments not carried at fair value | ||
Debt | 393.4 | 393.2 |
2016 SIG Senior Notes | Carrying Value | ||
Financial instruments not carried at fair value | ||
Debt | 393.4 | 393.2 |
Level 3 | Fair Value | ||
Financial instruments not carried at fair value | ||
Redeemable preference shares | 200.2 | 191.7 |
Level 3 | 2017 SEK Subordinated Notes | Fair Value | ||
Financial instruments not carried at fair value | ||
Debt | 297 | 309.5 |
Level 3 | 2016 SIG Senior Notes | Fair Value | ||
Financial instruments not carried at fair value | ||
Debt | $ 361.7 | $ 347.6 |
Debt and standby letters of c_3
Debt and standby letters of credit facilities (Details) kr in Millions, $ in Millions | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 22, 2017SEK (kr) | Sep. 22, 2017USD ($) | Nov. 01, 2016USD ($) |
Debt and standby letters of credit facilities | |||||
Long-term Debt, Total | $ 686.1 | $ 696.8 | |||
2017 SEK Subordinated Notes | |||||
Debt and standby letters of credit facilities | |||||
Debt, at face value | 296.6 | 307.6 | kr 2,750 | $ 346.1 | |
Unamortized issuance costs | (3.9) | (4) | |||
Long-term Debt, Total | $ 292.7 | $ 303.6 | |||
Effective rate | 3.70% | 3.80% | |||
2016 SIG Senior Notes | |||||
Debt and standby letters of credit facilities | |||||
Debt, at face value | $ 400 | $ 400 | $ 400 | ||
Unamortized discount | (2.5) | (2.6) | |||
Unamortized issuance costs | (4.1) | (4.2) | |||
Long-term Debt, Total | $ 393.4 | $ 393.2 | |||
Effective rate | 4.70% | 4.70% | 4.70% |
Debt and standby letters of c_4
Debt and standby letters of credit facilities - 2017 SEK Subordinated Notes and 2016 SIG Senior Notes (Details) kr in Millions, $ in Millions | Sep. 22, 2017SEK (kr) | Sep. 22, 2017USD ($) | Nov. 01, 2016USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Sep. 22, 2017USD ($) |
Debt and standby letters of credit facilities | |||||||
Interest expense on debt | $ 7.6 | $ 7.7 | |||||
2017 SEK Subordinated Notes | |||||||
Debt and standby letters of credit facilities | |||||||
Debt notes issued | kr 2,750 | 296.6 | $ 307.6 | $ 346.1 | |||
Issue price (as a percent) | 100.00% | 100.00% | |||||
Term of redemption following occurrence of Specified Event (in days) | 90 days | 90 days | |||||
Debt issuance costs | $ 4.6 | ||||||
Underwriting fees | kr 27.5 | $ 3.5 | |||||
Foreign currency exchange (losses) gains on remeasurement of debt | 11 | 5.8 | |||||
Interest expense on debt | $ 2.8 | $ 2.9 | |||||
Annual interest rate (as a percent) | 3.70% | 3.50% | |||||
Effective rate | 3.70% | 3.80% | |||||
2016 SIG Senior Notes | |||||||
Debt and standby letters of credit facilities | |||||||
Debt notes issued | $ 400 | $ 400 | $ 400 | ||||
Issue price (as a percent) | 99.209% | ||||||
Debt issuance costs | $ 5.1 | ||||||
Underwriting fees | 3.4 | ||||||
Interest expense on debt | $ 4.8 | $ 4.8 | |||||
Net proceeds | $ 392.4 | ||||||
Annual interest rate (as a percent) | 4.60% | ||||||
Effective rate | 4.70% | 4.70% | 4.70% |
Debt and standby letters of c_5
Debt and standby letters of credit facilities - Standby Letter of Credit Facilities (Details) $ in Millions, kr in Billions | Mar. 31, 2019SEK (kr) | Mar. 31, 2019USD ($) | Dec. 31, 2018SEK (kr) | Dec. 31, 2018USD ($) | Nov. 09, 2018USD ($)agreement |
Other Secured Letter of Credit and Trust Arrangement | Sirius America Insurance Company | |||||
Standby Letter of Credit Facilities | |||||
Secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust | $ 56.7 | $ 56.2 | |||
Other Secured Letter of Credit and Trust Arrangement | Sirius Bermuda Insurance Company Ltd. | |||||
Standby Letter of Credit Facilities | |||||
Secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust | 347.2 | 319.7 | |||
Sirius International | Nordea Bank Finland Abp | |||||
Standby Letter of Credit Facilities | |||||
Borrowing capacity | $ 125 | ||||
Sirius International | DNB Bank ASA London Branch | |||||
Standby Letter of Credit Facilities | |||||
Borrowing capacity | $ 35 | ||||
Sirius International | Standby Letters of Credit | |||||
Standby Letter of Credit Facilities | |||||
Number of standby letter of credit agreements renewed | agreement | 2 | ||||
Borrowing capacity | $ 160 | ||||
Sirius International | Unsecured Standby Letters of Credit | DNB Bank ASA London Branch | |||||
Standby Letter of Credit Facilities | |||||
Borrowing capacity | $ 25 | ||||
Sirius International | Other Secured Letter of Credit and Trust Arrangement | |||||
Standby Letter of Credit Facilities | |||||
Secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust | kr 2.7 | $ 296 | kr 2.9 | $ 321.3 |
Debt and standby letters of c_6
Debt and standby letters of credit facilities - Revolving Credit Facility (Details) - Revolving Credit Facility - USD ($) $ in Millions | 1 Months Ended | |
Feb. 28, 2018 | Mar. 31, 2019 | |
Line of Credit Facility [Line Items] | ||
Term of credit facility | 3 years | |
Borrowing capacity | $ 300 | |
Outstanding amount | $ 0 |
Debt and standby letters of c_7
Debt and standby letters of credit facilities - Interest (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Debt and standby letters of credit facilities | ||
Total interest expense incurred | $ 7.6 | $ 7.7 |
Total interest paid | $ 2.7 | $ 2.9 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Income taxes | |||
Income tax expense | $ 17.2 | $ 11.1 | |
Pre-tax income | $ 121.3 | $ 54.4 | |
Effective tax rate (as a percent) | 14.20% | 20.30% | |
Statutory tax rate (as a percent) | 21.40% | 22.00% | |
Tax Cuts and Jobs Act of 2017, BEAT tax rate, 2019-2025 (as a percent) | 10.00% | ||
Tax Cuts and Jobs Act of 2017, BEAT tax rate, 2026 and thereafter (as a percent) | 12.50% | ||
Provision for income taxes related to BEAT | $ 0 | $ 0 | |
Provision for income taxes related to GILTI | $ 0 | $ 0 |
Income taxes - Deferred tax ass
Income taxes - Deferred tax asset, net of valuation allowance and Uncertain tax positions (Details) $ in Millions | Mar. 31, 2019USD ($) |
Income taxes | |
Net deferred tax liability, net of valuation allowance | $ 59 |
Other net deferred tax liabilities | 4.5 |
Uncertain tax positions | |
Total reserve for unrecognized tax benefits | 63.3 |
Reversal of reserves for unrecognized tax benefits on permanent differences and interest and penalties | 63.2 |
Reversal of reserves for unrecognized tax benefits on temporary differences | 0.1 |
U.S. subsidiaries | |
Income taxes | |
Net deferred tax assets | 33.1 |
Luxembourg subsidiaries | |
Income taxes | |
Net deferred tax assets | 131.5 |
United Kingdom subsidiaries | |
Income taxes | |
Net deferred tax assets | 11.5 |
Sweden subsidiaries | |
Income taxes | |
Net deferred tax assets | 230.6 |
Swedish Tax Authority | Sweden subsidiaries | |
Uncertain tax positions | |
Reserve attributable to uncertain tax positions | $ 63 |
Derivatives - Interest Rate Cap
Derivatives - Interest Rate Cap (Details) - Interest rate cap $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)item | |
Derivatives | |
Number of financial institutions entered into derivative contracts | item | 2 |
Derivatives not designated as hedging instruments | |
Derivatives | |
Collateral balances held | $ 0.2 |
Barclays Bank Plc | Derivatives not designated as hedging instruments | A | |
Derivatives | |
Collateral balances held | 0.1 |
Nordea Bank Abp | Derivatives not designated as hedging instruments | AA- | |
Derivatives | |
Collateral balances held | $ 0.1 |
Derivatives - Classification an
Derivatives - Classification and Fair Value of Derivatives in Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Derivatives | ||
Derivative assets | $ 0.8 | $ 4.1 |
Derivative liabilities | 5.3 | 5.1 |
Interest rate cap | Derivatives not designated as hedging instruments | ||
Derivatives | ||
Notional Value | 250 | 250 |
Interest rate cap | Derivatives not designated as hedging instruments | Other assets | ||
Derivatives | ||
Derivative assets | 0.1 | 0.2 |
Foreign currency swaps | Derivatives not designated as hedging instruments | ||
Derivatives | ||
Notional Value | 90 | 45 |
Foreign currency swaps | Derivatives not designated as hedging instruments | Other liabilities | ||
Derivatives | ||
Derivative liabilities | 3.8 | 4.6 |
Foreign currency forwards | Derivatives not designated as hedging instruments | ||
Derivatives | ||
Notional Value | 15 | |
Foreign currency forwards | Derivatives not designated as hedging instruments | Other assets | ||
Derivatives | ||
Derivative assets | 0.2 | |
Weather derivatives | Derivatives not designated as hedging instruments | ||
Derivatives | ||
Notional Value | 121.6 | 150.5 |
Weather derivatives | Derivatives not designated as hedging instruments | Other assets | ||
Derivatives | ||
Derivative assets | 3.9 | |
Weather derivatives | Derivatives not designated as hedging instruments | Other liabilities | ||
Derivatives | ||
Derivative liabilities | 1.3 | |
Equity futures contracts | Derivatives not designated as hedging instruments | ||
Derivatives | ||
Notional Value | 17 | |
Equity futures contracts | Derivatives not designated as hedging instruments | Other liabilities | ||
Derivatives | ||
Derivative liabilities | 0.2 | |
Equity put options | Derivatives not designated as hedging instruments | ||
Derivatives | ||
Notional Value | 10.9 | 6.2 |
Equity put options | Derivatives not designated as hedging instruments | Other assets | ||
Derivatives | ||
Derivative assets | $ 0.5 | |
Equity put options | Derivatives not designated as hedging instruments | Other liabilities | ||
Derivatives | ||
Derivative liabilities | $ 0.5 |
Derivatives - Classification _2
Derivatives - Classification and Fair Value of Derivatives in Consolidated of (Loss) Income Statements (Details) - Derivatives not designated as hedging instruments - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Interest rate cap | Other revenues | ||
Derivatives | ||
Gains (losses) recognized in earnings | $ (0.1) | $ 0.3 |
Foreign currency swaps | Net foreign exchange gains (losses) | ||
Derivatives | ||
Gains (losses) recognized in earnings | 0.8 | 1.3 |
Foreign currency forwards | Net foreign exchange gains (losses) | ||
Derivatives | ||
Gains (losses) recognized in earnings | 0.2 | |
Weather derivatives | Other revenues | ||
Derivatives | ||
Gains (losses) recognized in earnings | (6) | $ 1 |
Equity futures contracts | Net realized investment gains (losses) | ||
Derivatives | ||
Gains (losses) recognized in earnings | (0.6) | |
Equity futures contracts | Net unrealized investment gains | ||
Derivatives | ||
Gains (losses) recognized in earnings | (0.2) | |
Equity put options | Net unrealized investment gains | ||
Derivatives | ||
Gains (losses) recognized in earnings | $ (0.4) |
Share-based compensation (Detai
Share-based compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based compensation | ||
Unrecognized share-based compensation costs | $ 34.3 | $ 0 |
Minimum | ||
Share-based compensation | ||
Expected period of recognition | 2 years | |
Maximum | ||
Share-based compensation | ||
Expected period of recognition | 3 years | |
Performance share units | ||
Share-based compensation | ||
Shares granted to employees (in shares) | 401,311 | |
Restricted share units | ||
Share-based compensation | ||
Shares granted to employees (in shares) | 1,411,714 | |
Stock options | Officer | ||
Share-based compensation | ||
Stock options granted to employees (in shares) | 1,374,944 |
Common shareholder's equity, _2
Common shareholder's equity, mezzanine equity, and non controlling interests - Common shareholder's equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Nov. 05, 2018 | |
Common shareholder's equity | |||
Common shares authorized | 500,000,000 | ||
Common shares par value | $ 0.01 | ||
Preference shares authorized / designated | 100,000,000 | ||
Preference shares par value | $ 0.01 | ||
Changes in common shareholders' equity | |||
Shares issued beginning of the year | 115,151,251 | 120,000,000 | |
Shares outstanding beginning of the year | 115,151,251 | 120,000,000 | |
Issuance of shares to directors and employees (in shares) | 111,052 | ||
Shares issued end of the year | 115,262,303 | 120,000,000 | |
Shares outstanding end of the year | 115,262,303 | 120,000,000 | |
Common dividends paid | $ 0 | $ 0 | |
Series B preference shares | |||
Common shareholder's equity | |||
Preference shares authorized / designated | 15,000,000 | ||
Preference shares par value | $ 0.01 |
Common shareholder's equity, _3
Common shareholder's equity, mezzanine equity, and non controlling interests - Mezzanine equity (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Nov. 05, 2018 | |
Mezzanine equity | |||
Preference shares authorized / designated | 100,000,000 | ||
Preference shares par value | $ 0.01 | ||
Redeemable preference shares with accrued dividend carrying value | $ 240.6 | $ 232.2 | |
Series B preference shares | |||
Mezzanine equity | |||
Preference shares authorized / designated | 15,000,000 | ||
Preference shares par value | $ 0.01 | ||
Preferential rights, Minimum gross proceeds from the issuance of senior or pari passu shares | $ 100 | ||
Series B preference shares | Sirius Group Private Placement | Preference Share Investors | |||
Mezzanine equity | |||
Share subscriptions (in shares) | 11,901,670 | ||
Series A redeemable preference shares | |||
Mezzanine equity | |||
Redeemable preference shares outstanding | 100,000 | ||
Redemption amount of preference shares | $ 95 | ||
Gain on redemption of preference shares | $ 13.8 | ||
Series A redeemable preference shares | IMGAH | |||
Mezzanine equity | |||
Number of convertible preferred shares issued as a consideration | 100,000 | ||
Preference shares authorized / designated | 150,000 | ||
Redeemable preference share liquidation preference per share (in dollars per share) | $ 1,000 |
Common shareholder's equity, _4
Common shareholder's equity, mezzanine equity, and non controlling interests - Non-controlling interests (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Change in non-controlling interest | ||
Balance at beginning | $ 1.7 | $ 0.2 |
Net income attributable to non-controlling interests | 0.4 | 0.2 |
Other, net | 0.1 | 0.1 |
Balance at end | 2.2 | $ 0.5 |
Alstead Re | ||
Change in non-controlling interest | ||
Balance at beginning | 1.7 | |
Balance at end | $ 2.1 |
Earnings per share - Basic earn
Earnings per share - Basic earnings per share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net income | $ 104.1 | $ 43.3 |
Less: Income attributable to non-controlling interests | (0.4) | (0.2) |
Less: Change in carrying value of Series B preference shares | (8.4) | |
Less: Accrued dividends on Series A redeemable preference shares | (2.6) | |
Net income available for dividends out of undistributed earnings | 95.3 | 40.5 |
Net income available to Sirius Group common shareholders | $ 86.4 | $ 38.8 |
Denominator: | ||
Weighted average shares outstanding for basic earnings per share | 115,182,331 | 120,000,000 |
Earnings per share | ||
Basic earnings per share | $ 0.75 | $ 0.32 |
Series B preference shares | ||
Numerator: | ||
Less: Earnings attributable to preference shares | $ (8.9) | |
Series A redeemable preference shares | ||
Numerator: | ||
Less: Earnings attributable to preference shares | $ (1.7) |
Earnings per share - Diluted ea
Earnings per share - Diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net income (loss) available to Sirius Group common shareholders | $ 86.4 | $ 38.8 |
Add: Change in carrying value of Series B preference shares | 8.4 | |
Net income available to Sirius Group common shareholders on a diluted basis | $ 94.8 | $ 38.8 |
Denominator: | ||
Weighted average shares outstanding for basic earnings per share | 115,182,331 | 120,000,000 |
Add: Series B preference shares | 11,901,670 | |
Add: Unvested performance share units and restricted share units | 251,313 | |
Weighted average shares outstanding for diluted earnings per share | 127,335,314 | 120,000,000 |
Earnings per share | ||
Diluted earnings per share | $ 0.74 | $ 0.32 |
Potentially dilutive securities excluded from the calculation of Diluted earnings per share | 19,510,830 | 0 |
Investments in unconsolidated_3
Investments in unconsolidated entities - Other long-term investments (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Investments in unconsolidated entities | ||
Other long-term investments | $ 389.7 | $ 365 |
Investments in unconsolidated entities | ||
Investments in unconsolidated entities | ||
Other long-term investments | 389.7 | 365 |
Equity method investments | 0 | 0 |
Investments in unconsolidated entities | Equity method eligible investments | ||
Investments in unconsolidated entities | ||
Other long-term investments | 167.5 | 169.4 |
Investments in unconsolidated entities | Equity method ineligible investments | ||
Investments in unconsolidated entities | ||
Other long-term investments | $ 222.2 | $ 195.6 |
Investments in unconsolidated_4
Investments in unconsolidated entities - Equity method unconsolidated entities (Details) - Investments in unconsolidated entities - Equity method eligible investments | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
BE Reinsurance Limited | ||
Investments in unconsolidated entities | ||
Ownership interest | 25.00% | 25.00% |
BioVentures Investors (Offshore) IV LP | ||
Investments in unconsolidated entities | ||
Ownership interest | 73.00% | 73.00% |
Camden Partners Strategic Fund V (Cayman), LP | ||
Investments in unconsolidated entities | ||
Ownership interest | 39.40% | 36.40% |
NEC Cypress Buyer LLC | ||
Investments in unconsolidated entities | ||
Ownership interest | 23.50% | 13.30% |
New Energy Capital Infrastructure Credit Fund LP | ||
Investments in unconsolidated entities | ||
Ownership interest | 18.30% | 22.90% |
New Energy Capital Infrastructure Offshore Credit Fund LP | ||
Investments in unconsolidated entities | ||
Ownership interest | 12.20% | 54.90% |
Scion G7, LP | ||
Investments in unconsolidated entities | ||
Ownership interest | 28.30% | 28.80% |
Tuckerman Capital V LP | ||
Investments in unconsolidated entities | ||
Ownership interest | 48.30% | 47.60% |
Tuckerman Capital V Co-Investment I LP | ||
Investments in unconsolidated entities | ||
Ownership interest | 49.50% | 47.70% |
Variable interest entities (Det
Variable interest entities (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Assets: | ||||
Fixed maturity investments, at fair value | $ 1,846.4 | $ 1,949.2 | ||
Short-term investments | 833.6 | 715.5 | ||
Cash | 116 | 119.4 | ||
Insurance and reinsurance premiums receivable | 818.7 | 630.6 | ||
Funds held by ceding companies | 202.8 | 186.8 | ||
Deferred acquisition costs | 152.6 | 141.6 | ||
Other assets | 161.1 | 124 | ||
Total assets | 6,307 | 6,007.7 | ||
Liabilities | ||||
Loss and loss adjustment expense reserves | 1,976.3 | 2,016.7 | $ 1,875.9 | $ 1,898.5 |
Unearned insurance and reinsurance premiums | 860.5 | 647.2 | ||
Other liabilities | 173.1 | 150.5 | ||
Total liabilities | 4,291.2 | 4,069.3 | ||
VIEs | ||||
Assets: | ||||
Fixed maturity investments, at fair value | 3.9 | 4 | ||
Short-term investments | 0.4 | 0.3 | ||
Cash | 0.2 | 0.2 | ||
Total investments | 4.5 | 4.5 | ||
Insurance and reinsurance premiums receivable | 1.5 | 0.1 | ||
Funds held by ceding companies | 4.7 | 3.7 | ||
Deferred acquisition costs | 0.5 | 5.2 | ||
Other assets | 0.1 | 0.9 | ||
Total assets | 11.3 | 14.4 | ||
Liabilities | ||||
Loss and loss adjustment expense reserves | 3 | 4.6 | ||
Unearned insurance and reinsurance premiums | 1.7 | 3.7 | ||
Other liabilities | 0.1 | |||
Total liabilities | $ 4.8 | $ 8.3 |
Variable interest entities - Un
Variable interest entities - Unconsolidated VIE (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Variable interest entities | ||
Other long-term investments | $ 389.7 | $ 365 |
Total assets | 6,307 | 6,007.7 |
Unconsolidated VIE | ||
Variable interest entities | ||
Other long-term investments | 220.6 | 209.1 |
Total assets | 220.6 | 209.1 |
Other long-term investments | ||
Variable interest entities | ||
Other long term investments | 143.8 | 135.1 |
Total assets | 143.8 | 135.1 |
On-Balance Sheet | ||
Variable interest entities | ||
Other long term investments | 118.5 | 103.1 |
Total assets | 118.5 | 103.1 |
Off-Balance Sheet | ||
Variable interest entities | ||
Other long term investments | 25.3 | 32 |
Total assets | $ 25.3 | $ 32 |
Transactions with related par_2
Transactions with related parties (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Transactions with related parties | |||
Gross written premiums | $ 622.3 | $ 615.2 | |
Receivables due from affiliates | 19.4 | $ 14.3 | |
Payables due to affiliates | 0.7 | ||
Insurance and MGU affiliates, or their subsidiaries | |||
Transactions with related parties | |||
Gross written premiums | $ 24.1 | $ 19.3 |
Commitments and contingencies -
Commitments and contingencies - Leases (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Operating Leases Disclosure | |
Operating lease expense | $ 2.6 |
Operating lease right-of-use assets | $ 32 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Other Assets |
Lease liability | $ 33.9 |
Current lease liabilities | 9.8 |
Non-current lease liabilities | 24.1 |
Future annual minimum rental payments | |
2019 | 7.7 |
2020 | 8.9 |
2021 | 7.4 |
2022 | 6.6 |
2023 | 4.2 |
2024 and after | 2 |
Total future annual minimum rental payments as at March 31, 2019 | 36.8 |
Less: present value discount | (2.9) |
Total lease liability as at March 31, 2019 | $ 33.9 |
Leased offices | |
Operating Leases Disclosure | |
Weighted average lease term (years) as at March 31, 2019: | 7 years |
Weighted average discount rate: | 3.80% |
Leased equipment | |
Operating Leases Disclosure | |
Weighted average lease term (years) as at March 31, 2019: | 3 years |
Weighted average discount rate: | 3.40% |