AM Best has removed from under review with developing implications and affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Ratings (Long-Term ICR) of "a-" of the rated operating subsidiaries of SiriusPoint Ltd. (SiriusPoint) (Bermuda) [NYSE: SPNT]. (See below for a detailed listing of the companies and ratings.) Additionally, AM Best has removed from under review with developing implications and affirmed the Long-Term ICRs of "bbb-" of SiriusPoint, Sirius International Group, Ltd. (Bermuda), and Third Point Re (USA) Holdings Ltd. (TP USA) (Wilmington, DE), which are non-operating holding companies. Concurrently, AM Best has removed from under review with developing implications status and affirmed the Long-Term Issue Credit Rating of "bbb-" on the USD 115 million, 7% senior unsecured notes, due 2025, of TP USA. The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect SiriusPoint's balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management. The ratings of the group's operating subsidiaries factor in their strategic importance to SiriusPoint.
The rating actions follow the completion of AM Best's assessment of the consolidated financial strength of the newly formed SiriusPoint group, resulting from the merger between Third Point Reinsurance Ltd. (TP Re), Sirius International Insurance Group Ltd. (SIIG) and Yoga Merger Sub Ltd. on 26 February 2021.
SiriusPoint's balance sheet strength is underpinned by its consolidated risk-adjusted capitalisation, as measured by Best's Capital Adequacy Ratio (BCAR), which is expected to remain at the strongest level. The assessment also considers SiriusPoint's good financial flexibility as a listed entity on the New York Stock Exchange. Partially offsetting rating factors include the group's relatively high-risk investment strategy and moderate financial leverage, as well as its limited capital fungibility due to a significant portion of consolidated shareholders' equity being held as a Safety Reserve in the group's Swedish subsidiary.
SiriusPoint's operating performance is expected to be adequate over the underwriting cycle. The technical performance of TP Re and SIIG in recent years has been impacted negatively by significant catastrophe losses. Prospectively, SiriusPoint's management aims to rebalance the business mix away from catastrophe-exposed property business toward less volatile accident and health and specialty lines. This is expected to lead to improved and more stable technical profitability for the group. AM Best will monitor closely the execution of the group's business plan.
SiriusPoint's neutral business profile assessment reflects its market position as a mid-tier global reinsurer. The group benefits from global platforms, including in Europe, the United States, Bermuda and at Lloyd's. SiriusPoint has a good level of diversification by line of business, which is expected to improve further with its continued expansion into the accident and health segment as well as into casualty and specialty lines.
AM Best has removed from under review with developing implications, affirmed the FSRs of A- (Excellent) and the Long-Term ICRs of "a-" and assigned stable outlooks for the following subsidiaries of SiriusPoint Ltd.:
- Sirius America Insurance Company
- Sirius Specialty Insurance Corporation
- Sirius Bermuda Insurance Company Ltd.
- Sirius International Insurance Corporation (publ)
- Third Point Reinsurance Company Ltd.
- Third Point Reinsurance (USA) Ltd.
This press release relates to Credit Ratings that have been published on AM Best's website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best's Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best's Credit Ratings. For information on the proper media use of Best's Credit Ratings and AM Best press releases, please view Guide for Media Proper Use of Best's Credit Ratings and AM Best Rating Action Press Releases.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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