Siriuspoint Ltd. · NYSE:SPNT
Siriuspoint — Third Point Reinsurance — Investor Presentation (March 2017)
33 slides from Siriuspoint's investor presentation, Mar 6, 2017
Slide 1: Investor Presentation March 2017
For Information Purposes Only Investor Presentation MARCH 2017
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
For Information Purposes Only CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 2 Certain statements and information in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “anticipate,” “
Slide 3: Our Company
For Information Purposes Only OUR COMPANY • Specialty property & casualty reinsurer based in Bermuda • A- (Excellent) financial strength rating from A.M. Best Company • Began operations in January 2012 and completed IPO in August 2013 • Investment portfolio managed by Third Point LLC • Total return
Slide 4: Key Metrics
For Information Purposes Only Year ended Year ended Year ended Year ended December 31, 2016 December 31, 2015 December 31, 2014 December 31, 2013 Shareholders’ Equity $ 1.41 billion $ 1.38 billion $ 1.45 billion $ 1.39 billion Diluted Book Value Per Share* $ 13.16 $ 12.85 $ 13.55 $ 13.12 Return on B
Slide 5: Total Return Business Model Designed to Deliver Superior Returns
For Information Purposes Only TOTAL RETURN BUSINESS MODEL DESIGNED TO DELIVER SUPERIOR RETURNS 5 Opportunity for Attractive Equity Returns to Shareholders Over Time Experienced Underwriting Team Superior Investment Management Stable Capital Base Underwriting Profit Investment Return on Float1 Invest
Slide 6: Experienced Senior Management Team
For Information Purposes Only EXPERIENCED SENIOR MANAGEMENT TEAM 6 Robert Bredahl President & CEO Dan Malloy Chief Underwriting Officer (Bermuda) • EVP, Co-Head of Specialty Lines, Aon Benfield • President & CEO, Stockton Reinsurance Ltd. • President, Center Re Bermuda John Berger Chairman & CEO (U.
Slide 7: Organizational Structure – Key Entities
For Information Purposes Only ORGANIZATIONAL STRUCTURE – KEY ENTITIES 7 Third Point Reinsurance Ltd. (Holding Company) Third Point Reinsurance Company Ltd. (Class 4 Insurer) Third Point Re Marketing (UK) Ltd. (Marketing Company ) 100% 100% Third Point Re (UK) Holdings Ltd. (Intermediate Holding Comp
Slide 8: Flexible & Opportunistic Underwriting Strategy
For Information Purposes Only FLEXIBLE & OPPORTUNISTIC UNDERWRITING STRATEGY 8 • Our total return model provides crucial flexibility in today’s market environment • We leverage strong relationships to access attractive opportunities • We are the lead underwriter on many of our transactions • Limited
Slide 9: Traditional Quota Shares
For Information Purposes Only TRADITIONAL QUOTA SHARES 9 • Non-standard auto • Ex-wind homeowners • General liability Target Best Opportunities • We focus on lines of business with volatility we believe is typically lower than that of most other reinsurance companies • We provide reinsurance support
Slide 10: Opportunistic Deals
For Information Purposes Only OPPORTUNISTIC DEALS 10 • Our relationships allow us to often be the first call for many special situations • We look for dislocated markets and distressed situations where higher risk- adjusted returns may be available • We manage our downside exposure with structural f
Slide 11: Reserve Covers
For Information Purposes Only RESERVE COVERS 11 • Reserve covers provide clients with reinsurance protection, capital relief and potentially enhanced investment returns • Relationships are key – decision-maker is typically the client’s CEO or CFO • Our team has a reputation for sophisticated structu
Slide 12: Evolution of Our Portfolio – Property (Homeowners)
For Information Purposes Only EVOLUTION OF OUR PORTFOLIO • Portfolio of primarily Florida carriers built from past relationships. The portfolio now also includes a Northeast carrier • Identified Assignment of Benefits (AOB) issue in Florida early, but did not fully price for it • Attempted to adjust
Slide 13: Evolution of Our Portfolio – Workers' Compensation
For Information Purposes Only 0 25 50 75 100 125 2012 2013 2014 2015 2016 EVOLUTION OF OUR PORTFOLIO • Portfolio includes mostly California specialty writers and MGAs • Market conditions vary widely by state, segment and carrier • The portfolio has performed reasonably well, though not as well as or
Slide 14: Evolution of Our Portfolio – Nonstandard Auto
For Information Purposes Only EVOLUTION OF OUR PORTFOLIO • Portfolio of MGA-driven nonstandard auto business built from past relationships • Underlying rate increases not enough to counter increasing loss severity (due to more expensive car parts) and frequency (due to distracted driving and increas
Slide 15: Evolution of Our Portfolio – General & Professional Liability
For Information Purposes Only 0 25 50 75 100 125 150 2012 2013 2014 2015 2016 EVOLUTION OF OUR PORTFOLIO • Portfolio is dominated by a single broad casualty retrocession deal. We also write a few transaction liability and professional lines reinsurance treaties • Pricing on recent general liability
Slide 16: Evolution of Our Portfolio – Multi-Line
For Information Purposes Only 0 25 50 75 100 125 150 175 200 225 250 2012 2013 2014 2015 2016 EVOLUTION OF OUR PORTFOLIO • Portfolio is primarily quota share contracts of Lloyds entities • Portfolio is dominated by a large, global auto warranty and physical damage deal that has been non-renewed • Th
Slide 17: Evolution of Our Portfolio – Credit & Financial Lines
For Information Purposes Only EVOLUTION OF OUR PORTFOLIO • Portfolio includes political risk, trade credit, structured credit, surety, title, residual value and mortgage. • Mortgage reinsurance is the majority of the portfolio. Exposure is written as reinsurance of the private mortgage insurers, and
Slide 18: Diversified Premium Base
For Information Purposes Only DIVERSIFIED PREMIUM BASE Gross Premium Written Since Inception1 by Type of Transaction Gross Premium Written Since Inception1 by Line of Business 1As of 12/31/2016 Note: All figures are for P&C Segment only 18
Slide 19: Reinsurance Risk Management
For Information Purposes Only REINSURANCE RISK MANAGEMENT 19 • Reinsurance business plan complements our investment management strategy: no property catastrophe excess treaties on rated balance sheet and premium and asset leverage (see slide 20) lower than peer group • Company-wide focus on risk man
Slide 20: Reinsurance Risk Management (Cont'd)
For Information Purposes Only 100 150 200 250 300 20 40 60 80 100 REINSURANCE RISK MANAGEMENT (CONT’D) 20 • Low premium leverage and asset leverage compared to peer group • Limited legacy reserves • Limited catastrophe risk Bermuda Reinsurer Leverage Metrics (Percent) Premium to Equity In ve st ed A
Slide 21: Market-Leading Investment Management by Third Point LLC
For Information Purposes Only MARKET-LEADING INVESTMENT MANAGEMENT BY THIRD POINT LLC 21 • Third Point LLC owned and led by Daniel S. Loeb • 18.9% net annualized returns for Third Point Partners LP since inception in 19951 • 10.1% net annualized return on TPRE managed account since inception (Jan. 1
Slide 22: Relationship with Third Point LLC
For Information Purposes Only RELATIONSHIP WITH THIRD POINT LLC 22 • Exclusive relationship through 2021, followed by successive 3-year terms on renewal • Investments are managed on substantially the same basis as the main Third Point LLC hedge funds • We pay a 1.5% management fee and 20% performanc
Slide 23: Third Point LLC Portfolio Risk Management
For Information Purposes Only THIRD POINT LLC PORTFOLIO RISK MANAGEMENT 23 • Portfolio diversification across industries, geographies, asset classes and strategies • Highly liquid portfolio – investment manager can dynamically shift exposures depending on macro/market developments • Security selecti
Slide 24: Gross Premium Written
For Information Purposes Only GROSS PREMIUM WRITTEN Total Gross Written Premium • Robust growth since inception • Broad range of lines of business and distribution sources (brokers) • We may reduce premium in 2017 given challenging market conditions 24 ($ Millions) 190 402 613 702 617 2012 2013 2014
Slide 25: Difficult Reinsurance Market Conditions
For Information Purposes Only DIFFICULT REINSURANCE MARKET CONDITIONS P&C Segment Combined Ratio • Our potential to produce a sub-100% combined ratio will be limited until market conditions improve • We do not write property catastrophe business, which many reinsurers have benefited from *Inception
Slide 26: Optimal Asset Leverage
For Information Purposes Only 1.07 1.12 1.24 1.50 1.55 2012 2013 2014 2015 2016 OPTIMAL ASSET LEVERAGE Asset Leverage1 • If the underlying reinsurance risk is attractive, generating float allows a reinsurer to access investment “leverage” at low or no cost • Certain lines of business provide reinsur
Slide 27: Returns Since Inception
For Information Purposes Only RETURNS SINCE INCEPTION Return on Beginning Shareholders’ Equity1 • We believe we have reached scale in our underwriting operation • We believe that we are well- positioned to out-perform in a challenging underwriting environment 1Non-GAAP financial measure. There is no
Slide 28: Total Return Business Model Designed to Deliver Superior Returns
For Information Purposes Only TOTAL RETURN BUSINESS MODEL DESIGNED TO DELIVER SUPERIOR RETURNS 28 Opportunity for Attractive Equity Returns to Shareholders Over Time Experienced Underwriting Team Superior Investment Management Stable Capital Base Underwriting Profit Investment Return on Float1 Inves
Slide 29: Appendix
For Information Purposes Only 29 APPENDIX
Slide 30: Condensed Consolidated Income Statement
For Information Purposes Only Condensed Consolidated Income Statement ($000s) Years Ended 12/31/2016 12/31/2015 12/31/2014 12/31/2013 Net premiums earned $ 590,190 $ 602,824 $ 444,532 $ 220,667 Net investment income (loss)(1) 98,825 (28,074 ) 85,582 258,125 Total revenues 689,015 574,750 530,114 478
Slide 31: Selected Balance Sheet Data
For Information Purposes Only Selected Balance Sheet Data ($000s) As of 12/31/2016 12/31/2015 12/31/2014 12/31/2013 Total assets $ 3,895,644 $ 3,545,108 $ 2,582,580 $ 2,159,890 Total liabilities 2,445,919 2,149,225 1,300,532 649,494 Total shareholders’ equity 1,449,725 1,395,883 1,552,048 1,510,396
Slide 32: Non-GAAP Measures & Other Financial Metrics
For Information Purposes Only NON-GAAP MEASURES & OTHER FINANCIAL METRICS ($000s, Except Share and per Share Amounts) As of 12/31/2016 12/31/2015 12/31/2014 12/31/2013 Basic diluted book value per share numerator: Total shareholders' equity $ 1,449,725 $ 1,395,883 $ 1,552,048 $ 1,510,396 Less: non-c
Slide 33: Non-GAAP Measures & Other Financial Metrics
For Information Purposes Only NON-GAAP MEASURES & OTHER FINANCIAL METRICS ($000s) Years ended 12/31/2016 12/31/2015 12/31/2014 12/31/2013 Net income (loss) $ 27,635 $ (87,390 ) $ 50,395 $ 227,311 Shareholders' equity attributable to shareholders -beginning of year 1,379,726 1,451,913 1,391,661 868,5
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