Siriuspoint Ltd (SPNT) 2024 Q4 法說會逐字稿

Good morning ladies and gentlemen, and welcome to Siriuspoint 4th quarter 2024 earnings conference call. (Operator Instructions).

With that, I would like to turn the call over to Liam Blackledge, senior associate in Investor Relations and strategy. Please go ahead.

Thank you, operator, and good morning or good afternoon to everybody listening. I welcome you to the Series Point earning call for the 2024 year and 4th quarter results.

Last night we issued our earnings press release and financial supplement, which are available on our website www.iiuspt.com.

Additionally, a webcast presentation will coincide with today's discussion and is available on our website.

Joining me on the call today are Scott Egan, our Chief Executive Officer, and Jim McKinney, our Chief Financial Officer.

Before we start, I would like to remind you that today's remarks contain forward-looking statements based on management's current expectations. Actual results may differ.

Certain non-gap financial measures will also be discussed.

Management uses the non-gap financial measures in its internal analysis of results and believes that they may be informative to investors engaging the quality of our financial performance and identifying trends in our results. However, these measures should not be considered as a substitute for our superior to the measures of financial performance preferred in accordance with GAAP.

Please refer to page 2 of our investor presentation for additional information on the company's latest public filings. I will now turn the call over to Scott.

Thanks, Liam, and good morning. Good afternoon, everyone. Thanks for joining our fourth quarter and full year 2024 results call.

The 4th quarter was a very busy one for Sirius Point, not just due to business as usual and market events such as Hurricane Milton, but also because of the strong execution on many actions as part of reshaping the company for the future.

In the quarter, we completed the previously announced lost portfolio transfer on the workers' compensation business with ESTA.

We agreed the transaction with CMIG to repurchase all of their outstanding shares and warrants, and we further de-risked their balance sheet by reducing the carrying value of a legacy MGA investment.

I do appreciate that the impact of these types of actions creates noise in our results, but I'm confident that all of the actions we have taken both last year as part of the performance turnaround and this year as part of our wider reshaping, have really helped drive strong performance improvement as well as positioning us strongly for the future.

The improvement in performance across all of the business is stark versus 2022, and most importantly, our underwriting performance has never been stronger.

Our aim, through both this call and our disclosures, is to transparently help you separate the one-off reshaping from the underlying performance.

That said, I'm pleased to say that 2024 marks the end of our major reshaping and that going forward the entire focus of the company is improving our business performance further.

That said, in a year that has seen significant reshaping, we have successfully outperformed on our operational and strategic objectives.

During the 2nd half of the year, we announced the repurchase of CMIG's entire common shareholding.

The repurchase and surrender of their merger warrants and the settlement of the CDA preference shares, all for cash, and today we are pleased to announce that all of these common shares will be retired upon completion of the transaction.

The transaction is immediately accretive to book value by 4% and will be meaningfully accretive to a go forward return on equity and earnings per share going forward.

As a reminder, earlier in the year we refinanced $400 million of senior debt to gain capital credit, and we also retired $115 million of senior debt to improve leverage and we unlocked $96 million of NGA off balance sheet capital through the deconsolidation of Arcadian in which we had a 49% stake.

We have returned over $1 billion to investors this year, a remarkable number when considering the size of the company and where we started at the end of 2022.

Each of these items alone creates a significant impact, but taken together means we have significantly improved our balance sheet and structure to be healthier, less complex, and more able to support the business going forward.

I am delighted with the progress that we've made in this regard.

On top of these strategic balance sheet reshaping actions, more importantly, we have achieved strong operational performance. This has led to a 14% improvement in our underlying net income versus prior year to approximately $300 million.

Underlying income reflects the adjustments for some of the one-off items I have already mentioned, and for transparency, there is a full breakdown of the bridge to this number in appendices 2 and 3 of the presentation.

Our core combined ratio for 2024 was 91%, a 2.4% improvement versus prior year excluding the impact of the LPT in 2023.

This was despite seeing an additional 1.9 points of catastrophe losses versus 2023.

We have done this while also growing our continuing lines business by 10% over the year.

This strong performance has driven an underlying return on equity for 2024 of 14.6%, which is at the upper end of the 12% to 15% across the cycle target we set only last year.

Let me comment briefly on our discreet 4th quarter underwriting performance.

We delivered a combined ratio for a core business of 90.2%, marking the ninth consecutive quarter of underwriting profit.

This includes 6.6 points of catastrophe losses relating primarily to Hurricane Milton, which remained at a previously disclosed estimate of $40 million.

This combined ratio is a 3.2% improvement versus the fourth quarter of 2023, with the improvement coming from both the loss ratio and the operating expense ratio.

Normalizing for the catastrophe losses, the year on year improvement was 9.8 points, a very strong proof point of our underwriting focus and culture across the company.

Growing the top line is our aim, but we will only do this when we believe it matches our capabilities and aspirations for underwriting discipline.

In the 4th quarter, our continuing lines, gross premiums written grew 21%.

On a net basis, growth was even stronger, with net premiums written growing 28%, reflecting our strategy of taking more risks where we have maturing relationships and therefore historical experience.

We achieved double digit growth in the 4th quarter within our accident and health, property, and specialty lines of business, while we remain roughly flat within casualty.

Our growth is targeted and disciplined, and we only grow in areas where we see opportunities meeting our profitability and risk targets.

On a full year basis, our continuing lines growth stands at 10%, comprising of 14% growth within insurance and services, and 5% growth within reinsurance.

The impact of the previously taken underwriting decisions on the top line comparatives will have a greatly reduced impact going forward, as these were taken in 2023.

Looking now at the catastrophe losses for the fourth quarter, these were $39 million which primarily relate to Hurricane Milton.

This event contributed to our overall cap losses for the year, which amounted to 2.4% of our common shareholders' equity.

As a reminder, we took decisive repositioning actions in relation to our property cap portfolio in 2022 and have reduced our volatility from ca losses significantly as a result.

We are pleased that these actions have resulted in us going from having a cap loss ratio amongst the highest for our peer group in 2022 to being in the lowest quartile for the same peer group in 2023 and 2024 as shown on slide 18 of our [Investorde].

A clear proof point to our lower volatility risk appetite.

Further evidence is that our reinsured segment delivered a strong standalone full year performance, achieving a combined ratio of 88% despite worldwide cat activity in 2024.

Unfortunately, and before 2025 had barely begun.

We once again saw very visible and upsetting scenes of devastation, this time in California with the wildfires which occurred there last month.

As we previously insured for our customers in Florida following Hurricane Milton, we are totally committed to ensuring all wildfire claims are paid as quickly as possible.

One of the main reasons we exist is to help those impacted rebuild their lives after terrible events like this, and we will be doing our best to ensure we fully support our customers throughout this process.

On behalf of all at Sirius Point, our thoughts go out to those who have been affected.

The California wildfires look set to be the most costly wildfires in history, with industry loss estimates ranging from $30billion to$ 50 billion.

At present, the estimate for our net pre-tax losses relating to wildfires is $60Million to $70 million.

As we did for Hurricane and Milton, this estimate has been arrived at by doing a bottom up evaluation of exposure on an account by account basis and not relying on market share linked to industry estimates.

The range, which is net of reinsurance and includes reinstatement premiums, will take us into a retrocession cover. This is there to prevent us from this type of earnings volatility.

We are very comfortable in our retro and contract limits, providing protection against further downside on property claims in this range.

The wildfires in California are a devastating reminder of why the re rating occurred and was necessary within property catastrophe reinsurance during the 2023 renewals.

This event once again serves as a strong reminder to reinsurance participants not to unwind from the rates and terms which were hard fought for in 2023.

We expect that the high single digit rate decreases seen at 11 will now moderate for the remainder of renewals in 2025.

Collectively, we have a duty as reinsurers to try and reduce the cyclical nature of the property catastrophe reinsurance industry for our investors and for our customers.

During the quarter, we also completed our external reserved review, validating our lost reserves as prudent.

This coincides with our 15th consecutive quarter of favourable prior year development, with a favourabledevelopment track record no longer than the duration of our insurance liabilities, which was 3 years at the end of 2024.

During the quarter, we completed on the lost portfolio transfer with Enstar's, relating to $400 million of workers' compensation reserves, as I mentioned earlier in the call.

This had a $20 million impact to income in the quarter in line with the previous guidance, and has freed up capital to be used on our continuing lines growth.

It is also important to note that for each of these three lost portfolio transfers that we've completed since 2021, we continue to have over 95% of our limit remaining.

Tuning now to MGAs.

Our MGA distribution strategy continues to strengthen, with 19 new or expanded distribution partnerships entered into during 2024 through our MGA Center of Excellence over double the amount from 2023 as we develop our platform and propositions.

We believe our approach and the infrastructure and capabilities we are building in both underwriting and the MGA Centre of Excellence means we are making good progress towards our ambition to become the preferred partner for delegated business.

Business being written under delegated authority continues to increase in its market share, as MGAs become an increasingly important link in the insurance ecosystem.

The capabilities we are developing aim to put us firmly front and center to capitalize and benefit from this distribution channel in the underwriting areas where we have expertise.

As I have said many times before, we continue to rationalize the number of equity states we have in MGAs.

We do not need to own distribution to be a good underwriting partner.

We have 20 equity stakes remaining in these investments, down from 36 at the start of 2023.

We will continue to try and reduce the number further in 2025.

As at the year end, 2024, we consolidate the results for three of these MGAs having deconsolidated Arcadian midway through the year.

There are 2 where we own 100% of the equity, and these align to our accident and health division.

These two MGAs generated $42 million of net service fee income in 2024.

Their performance continues to improve. With net service fee income increasing 36% over the prior year.

I continue to make the point every quarter that there is significant off-balance sheet value in these consolidated MGAs, as we saw when we deconsolidated Arcadian and generated almost $100 million of book value.

The carrying value on our balance sheet of the three remaining MGAs is $90 million with net service fee income of $42 million in 2024, equating to an earnings multiple of approximately 2 times the earnings.

As a reminder, when I joined in September 2022.

The value of the non-consolidated MGA investments on our balance sheet was around $265 million.

Whilst there is still work to be done in rationalizing these equity stakes, the progress so far means that the value of these investments on our balance sheet is now down to $105 million.

In the 4th quarter, we took a $35 million write down on one particular MGA investment which impacted our net income.

We had previously taken a write down on this specific investment earlier in the year as well.

Index 4 of our 4th quarter investor deck shows more detailed analysis of our MGA stakes.

We have taken this decisive action to further de-risk the balance sheet and ensure going forward, the focus is on the future and not the past.

These remaining stakes are all individually small in nature and are valued, as I said, at $105 million in total.

Looking now at investment portfolio, we've reported another strong result for the fourth quarter. Net investment income for the quarter was $69 million contributing to 1/4 quarter investment result of $29 million reflecting the strong fixed income rates we've been able to lock in.

For full year 2024, our net investment income was $304 million outperforming slightly against our net investment income guidance of $295million to $300 million as rates continued to remain elevated in the fourth quarter.

I want to briefly talk further on the transaction with CMIG that I mentioned at the start of the call.

Upon close of the deal on or before February 28, 2025, we are pleased to confirm today that we will permanently retire all $45.7 million of the common shares previously held by CMIG.

As a result, a price to earnings ratio reduces significantly post deal to well below the peer average.

We believe there is strong upside potential in our share price for investors.

As part of the deal, we also agreed to surrender and cancellation of the merger warrants held by CMIG.

The overall agreement is immediately accretive, with diluted book value per share increasing by 4%.

Our earnings per share is expected to meaningfully increase by greater than 20%, and our return on equity is anticipated to increase by over 200 basis points.

We have utilized our excess capital in a beneficial way for remaining shareholders, and our resulting position also leaves us with a simplified corporate governance structure, with CMIG relinquishing their board seat and bold observer upon the close of the deal.

Crucially, we've retained our financial strength following these transactions with a BSCR capital ratio at 214% and our debt to capital ratio at 24.8%, similar to its level a year ago following the $150 million debt retirement during 2024.

I will end where I started.

This has been a busy quarter for Siriuspoint, but more importantly, a very strong year.

Strong underwriting profits, premium growth.

Strong investment income.

Major reshaping items executed.

Book value growth of 10% and underlying upon an equity of 14.6% at the top end of our range.

We are pleased to present these results and actions to the market.

Most importantly, I'm incredibly proud of my colleagues.

For their determination and commitment in delivering these results.

They do not happen by accident, and it takes everyone in the company pulling together to achieve them.

That is a one Siriuspoint culture in action.

We do not see these results as a destination, and we are determined to push ourselves to be a best in class operator in our sector.

These results show we are closing the GAAP.

With that, I will pass across to Jim, who will take you through the financials in more detail.

Thank you, Scott, and good morning. Good afternoon, everyone. Before I begin going through the financials, I want to take a moment to echo Scott's comments and to say how proud I am of the Siriuspoint team for all that they have achieved this year.

Our strong financial results highlighted by year on year underwriting margin improvements and the enhancements we have made to optimize and strengthen our balance sheet, do not come easily, are hard earned, and have positioned the company for long term success.

Starting with our 4th quarter results on slide 13.

Operationally, it was another great quarter. Our combined ratio improved 3.2 points to 90.2% for core business. Continuing lines gross premiums written increased $133 million, or 21%, leading to $44 million of underlying net income or an increase of 19% versus the prior year. These results were driven by our enhancement initiatives and focused execution.

The headline net loss of $21 million was the result of 3 items linked to our efforts to finalize the reshaping of the company.

These include the CMIG transaction, closure of the previously announced LPT transaction with Enstar, and the write down of a legacy MGA investment. The CMIG transaction reflected a $26 million expense for the mark to market settlement of the merger warrants. The previously announced $20 million pre-tax loss associated with the completion of the LPT corresponds to the workers' compensation exit announced in 2023.

The $34 million decrease in the estimated fare value of the investment was driven by a change in the growth and future earnings outlook at the MGA. Combined, these items significantly impacted income in the quarter. They represent the final items associated with the company's major reshaping. We now move into 2025, purely focused on the ongoing operations of the company.

Refocusing on underwriting, gross premiums written increased 6% quarter on quarter for our core business and by 21% on a continuing line basis. Net written premiums increased at a faster pace, growing 22% on a headline basis and 28% on a continuing lines basis, driven by a shift in business mix associated with retaining a higher portion of our lower volatility portfolio.

Important to note, this is the last quarter in which we will have to present our gross premiums written figures on a continuing lines basis, as the impact from the business exited in 2023 will not affect our numbers starting in the first quarter of 2025.

Our headline combined ratio of 90.2% for core business was a 3.5 point improvement versus prior year. This was due to a 6.6% improvement in attritional losses. Favorable prior year development in the quarter stood at $58 million for core business versus $35 million in the prior year quarter, excluding the LPT.

We had favourableprior year development on a consolidated basis of $37 million marking the 15th consecutive quarter of favourableprior year development.

It is important to consider our consolidated results as this includes the business we have put into runoff.

Our results are not a coincidence. We have great confidence in our lost picks and are pleased that our external reserve review that was completed in the quarter indicated that our reserves are prudent. The duration of our insurers' liabilities is 3 years. Our track record of favourablereleases exceeds this.

Moving to catastrophe losses. For the quarter, we reported $39 million of catastrophe losses compared to 0 in the prior year. $40 million of these losses relate to Hurricane Milton, the slight favourableoffset related to Hurricane Milton.

Now turning to net service fee income, core MGA revenues and net service fee income reduced quarter over quarter because of the deconsolidation of Arcadian. As a reminder, this occurred at the end of our 2nd quarter.

Given Arcadians deconsolidation, it is helpful to look at 100% owned A&H consolidate MGA businesses to get a like for like comparison. This reveals a 25% increase in year on year service revenues, with the service margin increasing from 10.2% in the fourth quarter of 2023 to 20.8% in the fourth quarter of 2024, resulting in service fee income increasing to $11 million. This is more than double the previous year's amount.

Net investment income for the quarter was $69 million. This is down $10 million compared to the prior year quarter as we began selling down our investment portfolio in the fourth quarter in anticipation of the CMIG agreement.

Unrealized and realized losses, including from related party investment funds, were $40 million due to the previously mentioned review of our strategic MGA investments, all in the total investment results for the quarter stood at $29 million.

Other items impacting income include $20 million of interest expense, of which $9 million relates to funds withheld on lost portfolio transfers, and $13 million of foreign exchange gains. Excluding AOCI, diluted book value per share grew by 3% in the quarter as the accretion of book value from the CMIG deal was offset partially by this quarter's net loss.

Turning to our full year 2024 results on slide 14, we are pleased to report a combined ratio of 91% for our core business, net income of $184 million and diluted book value per share growth excluding AOCI of 9.8%.

Underlying net income increased 14% year on year to $304 million, demonstrating the improving quality of our underlying earnings. Importantly, our full year 2024 performance is at the upper end of our previously guided ROE target range of 12% to 15%, standing at 14.6% on an underlying basis and 9.1% on a headline basis, one including the net effect of the one-off items I previously mentioned.

As I mentioned on the previous slide, core MGA revenues and net service fee income comparisons are impacted by the deconsolidation of Arcadia. As it is no longer consolidated, fee income from Arcadian now comes through as other revenue. For a like for like comparison, we examine our two largest MGAs, where we own 100% of the equity. Their net service fee income increased 36% compared to the prior year to $42 million with the service margin improving 4.5 points to 21.1%. This was driven by a 7% increase in service revenues, while service expenses increased just 1%.

Our effective tax rate in 2024 was 13%. In 2025, we expect this to increase to 19% as a result of the Bermuda Corporate Income Tax Act of 2023 that introduced a 15% tax rate for Bermuda-domiciled companies. Despite the higher expected go forward effective tax rate, the company's existing deferred tax assets, including tax loss carry forwards combined with its earnings power, will translate into cash savings that it. In turn, will be accreted to capital liquidity and investment flow.

Turning to premium trends as shown on slide 15, for 2024, continuing lines premium increased 10% compared to the prior year. While runoff remains a drag on headline business performance through year end, we expect the impact to be insignificant in 2025. We expect headline premium in 2025 will grow at rates similar to continuing lines premium in 2024.

Growth in 2024 was strongest in our insurance and services segment. We saw double digit growth rates within our specialty and property specialisms that were partially offset by reductions in casualty. This growth included significant contributions from programs launched in 2023. Momentum continues to build in our distribution strategy and it is beginning to bear fruit.

On the reinsurance side, premiums increased 5% this year. We continue to see reductions in US casualty that were partially offset by growth in Bermuda property and specialty lines. In the fourth quarter, this segment grew 24%. The growth was driven by our international specialty and our Bermuda property lines.

Slide 16 shows a more detailed view.

Of where our portfolio is seeing growth, our property book grew 25% this year as we took advantage of the current hard market within US catastrophe reinsurance.

And grew into lower catastrophe and select property program business outside of the US after multi-year peaks, rates in the property space began to soften at 11, following flat rates in the 4th quarter. We expect the effects from the California wildfires to mitigate some of the downward pressure in the property reinsurance space.

Our accident and health book of business is unique and has been a stable source of underwriting profit through the cycle and an important part of our strategy to maintain a low volatility portfolio. Premiums in this specialism were down 4% in 2024, driven by the non-renewal of a specific quota share agreement with one of our partners.

The business mix attributable to accident health remains over 25% of our total portfolio premium, and it is a key offering where we have a best in class team with a great track record. Our accident health unit saw positive price movements across the book of business, with employer stop loss, notably seeing double digit rate increases and single digit rate increases generally across other lines.

Looking now at our specialty segment, we are seeing strong growth with gross premium re increasing by 38% in 2024. We've bolstered our marine and energy offerings with key hires, and this is beginning to show in the premium growth we are seeing.

Energy rates were flat to low single digit positive. Renewable and power pricing held firm, while energy liability realized high single digit rate increases.

Marine pricing also generally held firm, with the Baltimore Bridge accident providing a tailwind for rates. We are seeing risk adjusted rate change increases, specifically in cargo, marine liability, and ports and terminals lines of business.

Within aviation, our book experienced rate softening in direct and facultative and excess of lost business while pricing was flat in the pro rata market. Within the aviation book, baselines are achieving double digit rate increases driven by reduced capacity following the significant losses which occurred in 2023.

Within casualty, we have kept premiums written broadly stable on a gross basis and had a slight reduction in premiums written up 3% on a net basis. The rate increases seen in casualty are continuing to hold due to loss trends, and we are achieving rate change that exceeds lost costs, particularly in excess casualty, as many tiers have had to report reserve strengthening.

At 11, we reduced premiums written in casualty reinsurance for structured deals and certain casualty classes such as commercial auto. We reallocated some of this capital to lines where we see stronger margins as we maintain underwriting discipline.

Turning now to slide 17, which shows our combined ratio lock on a like for like basis adjusted for the impact of the lost portfolio transfer entered into in 2023 and our underlying earnings quality.

Our full year 2024 combined ratio excluding the small deferred gain from the LPT stands at 91.3%, a 2.4% improvement versus the prior year of 93.7%. It is important to look at our combined ratio excluding the effect of the LPT from last year as it distorts our year over year performance.

On this basis, our loss ratio decreased 3.9 points. Favorable prior year development excluding development recognized with the lost portfolio transfer increase versus the prior year, reducing the combined ratio by 4.3 points compared to 2.7 points in the previous period. The full year catastrophe loss ratio within our core segment was higher than the prior year at 2.5 points versus 0.6 points, but remains at historically low levels following our portfolio repositioning.

The underlying earnings quality chart on the right hand side of the page strips out the impact from catastrophe losses and prior year development. These inherently vary over time. We believe this metric is useful in demonstrating the underlying quality of our underwriting portfolio.

We are pleased to report a 2.7% improvement in our core business quality of earnings this year compared to prior year. The improvement was driven by a reduction in the attritional loss ratio that improved by 4.2 points year by year, more than offsetting the 1.7% increase in the acquisition costs ratio due to a shift in business mix.

We expect the attritional loss ratios to continue to remain at these lower levels in 2025, with the potential for them to improve further as we continue with our underwriting first focus.

The underwriting expense ratio decreases year over year by 0.2 points, building on the significant cost reduction work which we completed ahead of schedule in 2023. Crucially, the underlying quality of earnings combined ratio improved year over year for both the insurance and services segment and the reinsurance segment as the underwriting actions taken are improving our entire book of business.

Looking further into catastrophe losses on slide 18 shows our catastrophe loss ratio for financial years 2022, 2023 and 2024 versus our peers that have already reported their 2024 financials.

In 2022, we drastically changed our portfolio and meaningfully reduced our exposure to property catastrophe losses. Since then, our messaging has consistently highlighted our PML reductions.

We are pleased that we now have 2 full years of financial. Demonstrate the effect of our portfolio actions. Out of the 11 peers that have reported their 2024 financials, we went from having the 4th highest catastrophe loss ratio in 2022 to having the second lowest in both 2023 and 2024.

There is no greater proof of the effectiveness of our actions than our track record. We said we would reduce the volatility of our book from catastrophe losses, and these results prove that we have delivered this.

Slide 19 puts these catastrophe losses into context. On the left hand side, we demonstrate the retrocession protection we have in place for US risks, starting with 11 renewals in 2023. We have achieved decreases in our retention and increases in our limit for a similar cost.

On the right hand side, we show the 3 year trend in losses segmented by quarters. As the chart highlights, timing of the catastrophe losses can be dynamic. Importantly, we have meaningfully reduced our catastrophe losses as a percent of shareholders' equity as compared to 2022.

In addition, we believe our targeted business mix and the retrocession protection we put in place positions us well to continue to enable our low volatility strategy.

Turning to our strong investment result on slide 20.

Net investment income for full year 2024 was $304 million coming in slightly ahead of our updated guidance as interest rates continue to remain elevated. The portfolio continues to perform well.

In the fourth quarter we saw no defaults across our fixed income portfolio. Overall, our investment strategy remains unchanged as we continue to operate a high quality, low volatility fixed income portfolio. 80% of our investment portfolio is now fixed income, of which 99% is investment grade with an average credit rating of minus.

During the quarter, we continue to see reinvestment rates in excess of 4.5%. Our overall portfolio duration increased slightly to 3.1 years, with assets backing lost reserves remaining fully matched at 3 years.

Moving on to slide 21, the balance sheet remains strong with an estimated 214% BSCR ratio and significant liquidity. We continue to have a diverse mix of capital following the CMIG repurchase agreement. Last month, S&P reaffirmed our financial strength rating and stable outlook following the CMIG repurchase.

The repurchase increased our debt to capital ratio by 1 point year over year to 24.8%. The $115 million debt retirement in the first half of the year served as a partial offset to lower equity. This ratio remains within our target range. As a reminder, we continue to have an outstanding share repurchase authorization of $181 million.

Finally, we come to slide 22, looking further at our capital stack and liquidity. It is important for us to step back and look at the vast progress we have made in optimizing our structure in 2024. We were able to retire $115 million of senior debt while refinancing $400 million of other senior debt to ensure it now has full capital credit.

In addition, we completed intragroup reinsurance and other transactions that improved our capital fungibility. And operational ability to redeploy capital to support our strategy. We entered 2025 in a strong position to properly grow the business.

With this, we conclude the financial section of our presentation. This quarter saw us made considerable progress in our reshaping journey with the removal of numerous headwinds for the company as we enter 2025.

Our underlying fourth quarter and full year 2024 results were strong and demonstrate stable, consistent, and improving results with underlying earnings profile of roughly $300 million in 2024.

We expect to build on this performance and aim to continue delivering a 12% to 15% return on average common equity through the cycle.

Our major strategic reshaping is complete. Our balance sheet has been cleaned up considerably and is primed for the future. We have a simplified corporate governance structure and we have increased the diversification of our investor base. Our team has a united focus on creating value through underwriting excellence. I'm excited to be on this journey to become best in class with a team I believe in.

I would like to thank you again for your time this morning. For any questions, please contact our investor relations team at investor.relations@siriuspt.com. I now turn the call back over to the operator.

Thank you.

This concludes today's teleconference. You may disconnect your lines at this time.

Thank you for your participation.