Siriuspoint Ltd. · NYSE:SPNT
Siriuspoint — Third Point Reinsurance — Investor Presentation (October 2014)
29 slides from Siriuspoint's investor presentation, Oct 22, 2014
Slide 1: Investor Presentation
For Information Purposes Only Investor Presentation 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
For Information Purposes Only CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS 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,” “pl
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 KEY METRICS 4 6 Months Ended June 30, 2014 12 Months Ended December 31, 2013 12 Months Ended December 31, 2012 Diluted Book Value Per Share $13.72 $13.12 $10.89 Shareholders’ Equity $1.47 billion $1.39 billion $869 million Return on Beginning Shareholders’ Equity 5.1% 2
Slide 5: Total Return Business Model Delivers Superior Returns
For Information Purposes Only TOTAL RETURN BUSINESS MODEL DELIVERS SUPERIOR RETURNS 5 Superior Returns to Shareholders Over Time Exceptional Underwriting Team Market-Leading Investment Management Stable Capital Base Underwriting Profit Investment Return on Float Investment Return on Capital Exceptio
Slide 6: Exceptional Senior Management Team
For Information Purposes Only EXCEPTIONAL SENIOR MANAGEMENT TEAM 6 CEO Experience Robert Bredahl CFO & COO • CEO, Aon Benfield Securities • President, Aon Benfield Americas • CEO, Benfield U.S. Inc. & CEO, Benfield Advisory • Board Member, Benfield Group PLC Tony Urban EVP Underwriting • Preside
Slide 7: Organizational Structure
For Information Purposes Only ORGANIZATIONAL STRUCTURE 7 Third Point Reinsurance Ltd. (Holding Company) Third Point Reinsurance Company Ltd. (Class 4 Insurer) Third Point Reinsurance Investment Management Ltd. (Investment Manager) Third Point Reinsurance Opportunities Fund Ltd. (Fund) Bermuda entity
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 most 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 lower volatility • We provide reinsurance support to small and medium size insurers seeking surplus relief • These tran
Slide 10: Opportunistic Deals
For Information Purposes Only OPPORTUNISTIC DEALS 10 • Our relationships allow us to be the first call for many special situations • We look for dislocated markets and distressed situations where higher risk adjusted returns are available • We manage our downside exposure with structural features an
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 CEO or CFO • Our team has a reputation for sophisticated structuring to m
Slide 12: Diversified Premium Base
For Information Purposes Only DIVERSIFIED PREMIUM BASE 12 Traditional Quota Shares (57) Reserve Covers (5) Opportunistic Deals (38) Property QS (31) Auto (24) Workers Comp (20) Multi-Line (9) Agriculture (9) Financial Lines (5) General Liability (2) Gross Premium Written Since Inception1 by Type of
Slide 13: Reinsurance Risk Management
For Information Purposes Only REINSURANCE RISK MANAGEMENT 13 • Reinsurance business plan complements our investment management strategy: no property catastrophe excess treaties on rated balance sheet and premium and reserve leverage lower than peer group • Company-wide focus on risk management • Rob
Slide 14: Reinsurance Risk Management (Cont'd)
For Information Purposes Only REINSURANCE RISK MANAGEMENT (CONT’D) 14 • Low premium leverage and asset leverage compared to peer group • Limited legacy reserves mitigate the risk of adverse reserve development • Catastrophe risk is largely limited to our $55 million investment in our catastrophe fun
Slide 15: Reinsurance Operations
For Information Purposes Only REINSURANCE OPERATIONS 15 • Strong pipeline • Combined ratio trending lower as we gain scale • Continue to expand our underwriting platform ‒ U.K. marketing office ‒ Considering physical presence in the U.S. ‒ Opportunistically hire experienced underwriters
Slide 16: Market-Leading Investment Management
For Information Purposes Only MARKET-LEADING INVESTMENT MANAGEMENT 16 • Third Point LLC owned and led by Daniel S. Loeb • 21.1% net annualized returns since inception in 19955 • Risk-adjusted returns driven by superior security selection and lower volatility ¹ For Third Point Partners L.P. after fee
Slide 17: Relationship with Third Point LLC
For Information Purposes Only RELATIONSHIP WITH THIRD POINT LLC 17 • Exclusive relationship through 2016, 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 the standard 2% management fee and 20% p
Slide 18: Third Point LLC Portfolio Risk Management
For Information Purposes Only THIRD POINT LLC PORTFOLIO RISK MANAGEMENT 18 • 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 19: Strong Capital Base
For Information Purposes Only STRONG CAPITAL BASE 19 • Publicly-traded capital base • Significant capacity to support growth • Unlike many other reinsurers, our excess underwriting capital is not a drag on ROE • No existing debt / leverage 1As of 6/30/2014; Amounts for AM Best and BMA estimated by T
Slide 20: Strong Premium Growth
For Information Purposes Only STRONG PREMIUM GROWTH 20 • Robust growth since inception • Broad range of lines of business and distribution sources (brokers) • Strong pipeline of opportunities 0 100 200 300 400 2012 2013 2014 Total Gross Written Premium ($ Millions) First Half Full Year
Slide 21: Steady Progress Towards Combined Ratio < 100%
For Information Purposes Only STEADY PROGRESS TOWARDS COMBINED RATIO < 100% 21 • Combined ratio is improving in-line with projections as reinsurance operation gains scale • We anticipate further improvement in our combined ratio as additional premium is earned over the next few quarters 80 100 120 1
Slide 22: Significant Float Generation
For Information Purposes Only SIGNIFICANT FLOAT GENERATION 22 • Float = holding premium until claims must be paid • 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 reinsurers w
Slide 23: Attractive Returns Since Inception
For Information Purposes Only ATTRACTIVE RETURNS SINCE INCEPTION 23 Source: Dowling & Co; “Net ROE” = net income divided by average shareholder’s equity; Average equity calculated using the average of current and prior year stated equity; Peer group = ACGL, AGII, AWH, AXS, PTP, RE, XL, AHL, ENH, GLR
Slide 24: Total Return Business Model Delivers Superior Returns
For Information Purposes Only TOTAL RETURN BUSINESS MODEL DELIVERS SUPERIOR RETURNS 24 Superior Returns to Shareholders Over Time Exceptional Underwriting Team Market-Leading Investment Management Stable Capital Base Underwriting Profit Investment Return on Float Investment Return on Capital Excepti
Slide 25: Appendix
For Information Purposes Only 25 APPENDIX
Slide 26: Key Financial Highlights
For Information Purposes Only KEY FINANCIAL HIGHLIGHTS 26 Six months ended 6/30/14 Year ended 12/31/13 Year ended 12/31/12 Gross premiums written $233,095 $401,937 $190,374 Gross premiums ceded - (9,975) - Net premiums earned 152,012 220,667 96,481 Net investment income 90,520 258,125 136,868 Total
Slide 27: Key Financial Highlights (Cont'd)
For Information Purposes Only KEY FINANCIAL HIGHLIGHTS (CONT’D) 27 As of 6/30/14 As of 12/31/13 As of 12/31/12 Total assets $2,589,737 $2,159,890 $1,402,017 Total liabilities 1,046,600 649,494 473,696 Total shareholders’ equity $1,543,137 $1,510,396 $928,321 Non-controlling interests (75,908) (118,7
Slide 28: Non-GAAP Measures
For Information Purposes Only NON‐GAAP MEASURES 28 Book value per share Book value per share as used by our management is a non-GAAP measure, as it is calculated after deducting the impact of non-controlling interests. In addition, diluted book value per share is also a non-GAAP measure and represen
Slide 29: Non-GAAP Measures (Cont'd)
For Information Purposes Only NON‐GAAP MEASURES (CONT’D) 29 Return on beginning shareholders’ equity Calculated by dividing net income by the beginning shareholders’ equity attributable to shareholders and is a commonly used calculation to measure profitability. For the year ended December 31, 2013,
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