Siriuspoint Ltd. · NYSE:SPNT
Siriuspoint — Third Point Reinsurance — Investor Presentation (September 2018)
32 slides from Siriuspoint's investor presentation, Sep 4, 2018
Slide 1: Investor Presentation September 2018
Investor Presentation September 2018 For Information Purposes Only 1
Slide 2: Cautionary Statement Regarding Forward-Looking Statements
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,” “plan,” “intend,” “foresee,” “gui
Slide 3: Our Company
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 business model – Flexible and
Slide 4: Recent Developments
RECENT DEVELOPMENTS • Incrementally adding underwriting risk to reinsurance portfolio – We plan to get combined ratio under 100% during 2019 – We are targeting specialty lines of business with additional risk/ margin – Considering writing measured amount of property cat in 2019 • Recent hires of sen
Slide 5: Key Metrics
KEY METRICS Six months ended Year ended Year ended Year ended June 30, 2018 December 31, 2017 December 31, 2016 December 31, 2015 Shareholders’ equity attributable to Third Point $1.59 billion $1.66 billion $1.41 billion $1.38 billion Re common shareholders Diluted book value per share* $15.63 $15.6
Slide 6: Total Return Business Model Designed to Deliver Superior Returns
TOTAL RETURN BUSINESS MODEL DESIGNED TO DELIVER SUPERIOR RETURNS Exceptional Resources + Optimal Deployment = Outstanding Results Experienced Underwriting Underwriting Profit Team Opportunity for Superior Attractive Equity Investment Investment Returns to Return on Float (1) Management Shareholders
Slide 7: Experienced Senior Management Team
EXPERIENCED SENIOR MANAGEMENT TEAM ▪ CEO, Aon Benfield Securities Robert Bredahl ▪ President, Aon Benfield Americas President & CEO ▪ CEO, Benfield U.S. Inc. & CEO, Benfield Advisory ▪ Chief Accounting Officer, Third Point Re ▪ Strong business Christopher Coleman ▪ CFO, Alterra Bermuda Limited relat
Slide 8: Organizational Structure – Key Entities
ORGANIZATIONAL STRUCTURE – KEY ENTITIES Third Point Reinsurance Ltd. (Holding Company) 100% 100% 100% Third Point Reinsurance Third Point Re (UK) Third Point Re Company Ltd. Holdings Ltd. Marketing (UK) Limited (Class 4 Insurer) (Intermediate Holding Company) (Marketing Company ) 100% Third Point Re
Slide 9: Evolution of Our Portfolio: Property (Homeowners)
EVOLUTION OF OUR PORTFOLIO Property (Homeowners) Premium ($ Millions) • Portfolio of primarily Florida Calendar Year GPW carriers built from past relationships 175 Earned Premium and now also includes a Northeast carrier 150 125 • Identified Assignment of Benefits (AOB) issue in Florida early, but d
Slide 10: Evolution of Our Portfolio: Workers' Compensation
EVOLUTION OF OUR PORTFOLIO Workers’ Compensation Premium ($ Millions) Calendar Year GPW 100 Earned Premium • Market conditions vary widely by state, segment and carrier 75 • We are opportunistically targeting carrier deals with good 50 historical results 25 0 2012 2013 2014 2015 2016 2017 YTD Q2-18
Slide 11: Evolution of Our Portfolio: Nonstandard Auto
EVOLUTION OF OUR PORTFOLIO Nonstandard Auto Premium ($ Millions) • Portfolio of MGA-driven nonstandard auto business built Calendar Year GPW from past relationships Earned Premium 200 • Re-oriented our approach to focus on best-in-class carriers/ MGAs with the size and 150 differentiation to navigat
Slide 12: Evolution of Our Portfolio: Other Casualty
EVOLUTION OF OUR PORTFOLIO Other Casualty Premium ($ Millions) Calendar Year GPW Earned Premium 200 • Portfolio is dominated by broad casualty retrocession deals 150 • We also write a growing number of transaction liability and professional lines reinsurance 100 treaties • Pricing on renewals improv
Slide 13: Evolution of Our Portfolio: Multi-Line
EVOLUTION OF OUR PORTFOLIO Multi-Line Premium ($ Millions) 250 Calendar Year GPW • Portfolio is primarily quota Earned Premium share and retrocessional 200 contracts of Lloyds entities and reinsurance companies 150 • Have seen an increase in 100 inquiries following recent cat events 50 • Expect this
Slide 14: Evolution of Our Portfolio: Credit & Financial Lines
EVOLUTION OF OUR PORTFOLIO Credit & Financial Lines Premium ($ Millions) • Portfolio includes political risk, trade Calendar Year GPW credit, structured credit, surety, title, 125 Earned Premium residual value and mortgage 100 • We believe pricing and terms & conditions of mortgage risk have held up
Slide 15: Evolution of Our Portfolio: Reserve Covers
EVOLUTION OF OUR PORTFOLIO Reserve Covers ($ Millions) Calendar Year GPW 125 • Written premium earned and losses 100 incurred at inception 75 • Reserve covers provide clients with capital benefit and work particularly well within Lloyds and Solvency II 50 capital regimes 25 • Reserve covers provide
Slide 16: Diversified Premium Base
DIVERSIFIED PREMIUM BASE Gross Premium Written Since Inception (1) Third Point Reinsurance USA Inc. 21% Reserve Covers 9% Credit & Financial Lines 10% Other Casualty 13% Auto 15% Third Point Reinsurance Company Ltd. 79% Workers Compensation Reserve covers 9% Multi-Line 10% 22% Other Specialty 3% Pro
Slide 17: Reinsurance Risk Management
REINSURANCE RISK MANAGEMENT ▪ Reinsurance business plan complements our investment management strategy: premium, reserve and asset leverage lower than peer group Risk Management ▪ Company-wide focus on risk management Culture ▪ Robust underwriting and operational controls ▪ Close interaction between
Slide 18: Reinsurance Risk Management (Cont'd)
REINSURANCE RISK MANAGEMENT (CONT'D) Bermuda Reinsurer Leverage Metrics (Percent) • Low premium leverage and asset leverage compared to peer group • Limited legacy reserves • Limited catastrophe risk TPRE Invested Assets to Equity Invested Premium to Equity Source: Dowling & Co; As of 12/31/2017; “P
Slide 19: Market-Leading Investment Management by Third Point LLC
MARKET-LEADING INVESTMENT MANAGEMENT BY THIRD POINT LLC Illustrative Net Return Since Inception (June 1995 = $1,000) $50,000 Third Point Partners LP • Third Point LLC owned and led S&P 500 (TR) HFRI Event-Driven (Total) Index by Daniel S. Loeb $40,000 Dow Jones Credit Suisse Event Driven Index • 18.
Slide 20: Investment Returns Profile
INVESTMENT RETURNS PROFILE Performance Since Inception of Third Point Reinsurance Ltd. (January 1, 2012) Third Point CS Hedge Fund HFRI Event Reinsurance Ltd.* Event Driven Index* Driven Index* S&P 500 Index* Annualized return 10.0% 4.7% 5.9% 15.0% Cumulative Performance 86% 34% 45% 148% Annual stan
Slide 21: Relationship with Third Point LLC
RELATIONSHIP WITH THIRD POINT LLC • Exclusive relationship through 2021, followed by successive 3-year terms on renewal Limited • Investments are managed on substantially the same basis as the main Third Point Partnership LLC hedge funds (1) Agreement • We pay a 1.5% (exposure adjusted) management f
Slide 22: Third Point LLC Portfolio Risk Management
THIRD POINT LLC PORTFOLIO RISK MANAGEMENT • Portfolio diversification across industries, geographies, asset classes and strategies • Highly liquid portfolio – investment manager can dynamically shift exposures depending on macro/market developments • Security selection with extensive diligence proce
Slide 23: Gross Premium Written
GROSS PREMIUM WRITTEN Total Gross Written Premium 750 702 • Broad range of lines of 642 613 617 business and distribution sources (brokers) 500 ) 428 • Management believes the s n o company has a strong i l l i pipeline of opportunities M ( $ 250 • We may experience volatility in the amount of gross
Slide 24: Improving Reinsurance Market Conditions
IMPROVING REINSURANCE MARKET CONDITIONS P&C Segment Combined Ratio • Underlying market 110% conditions have 108.5% improved modestly due 107.7% in part to the industry cat losses in 2017 • We plan to further reduce 105% 104.7% our combined ratio by 104.0% incrementally increasing the risk profile of
Slide 25: Invested Asset Leverage
INVESTED ASSET LEVERAGE Invested Asset Leverage (1) 2.00 • If the underlying reinsurance risk 1.56 1.61 1.50 1.55 is attractive, generating float 1.50 allows a reinsurer to access 1.24 investment “leverage” at low or no cost 1.00 • Certain lines of business provide reinsurers with float for several
Slide 26: Strong Growth in Diluted Book Value Per Share Since Inception
STRONG GROWTH IN DILUTED BOOK VALUE PER SHARE SINCE INCEPTION Cumulative growth in diluted book value per share from December 31, 2011 (1)* 75% 60.6% • Market leading 20.1% ROE in 2017, a challenging year 50% for the reinsurance market • Active capital management - Share repurchases of 25% $108.7 mi
Slide 27: Total Return Business Model Designed to Deliver Superior Returns
TOTAL RETURN BUSINESS MODEL DESIGNED TO DELIVER SUPERIOR RETURNS Exceptional Resources + Optimal Deployment = Outstanding Results Experienced Underwriting Underwriting Profit Team Opportunity for Superior Attractive Equity Investment Investment Returns to Return on Float (1) Management Shareholders
Slide 28: Appendix
Appendix 28 For Information Purposes Only
Slide 29: Key Financial Highlights: Condensed Consolidated Income Statement
KEY FINANCIAL HIGHLIGHTS Condensed Consolidated Income Statement ($000s) Highlights Six months Years Ended ended • Generated $3.6 billion of 6/30/2018 12/31/2017 12/31/2016 12/31/2015 12/31/2014 Net premiums earned $ 283,979 $ 547,058 $ 590,190 $ 602,824 $ 444,532 gross premiums written from Net inv
Slide 30: Key Financial Highlights: Selected Balance Sheet Data
KEY FINANCIAL HIGHLIGHTS Selected Balance Sheet Data ($000s) Highlights As of 6/30/2018 12/31/2017 12/31/2016 12/31/2015 12/31/2014 • $286.0 million of capital Total assets $ 4,909,619 $ 4,671,794 $ 3,895,644 $ 3,545,108 $ 2,582,580 raised with 2013 IPO. Total liabilities 3,305,530 2,902,079 2,445,9
Slide 31: Non-GAAP Measures & Other Financial Metrics
NON-GAAP MEASURES & OTHER FINANCIAL METRICS Basic Book Value per Share and Diluted Book Value per Share Basic book value per share and diluted book value per share are non-GAAP financial measures and there are no comparable GAAP measures. Basic book value per share, as presented, is a non-GAAP finan
Slide 32: Non-GAAP Measures & Other Financial Metrics
NON-GAAP MEASURES & OTHER FINANCIAL METRICS Return on Beginning Shareholders’ Equity Attributable to Third Point Re Common Shareholders Return on beginning shareholders’ equity attributable to Third Point Re common shareholders, as presented, is a non-GAAP financial measure. Return on beginning shar
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