SiriusPoint Ltd. (SPNT) Q4 2025 Earnings Report, Transcript and Summary

Good morning, and welcome to the SiriusPoint Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Mr. Liam Blackledge, Investor Relations and Strategy Manager. Please go ahead.

Thank you, operator, and good morning or good afternoon to everyone listening. I welcome you to the SiriusPoint Earnings Call for the 2025 Fourth Quarter and Full Year Results. Last night, we issued our earnings press release and financial supplement, which are available on our website, www.siriuspt.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-GAAP financial measures will also be discussed. Management uses the non-GAAP financial measures in its internal analysis of our results of operations and believe that they may be informative to investors in gauging the quality of our financial performance and identifying trends in our results. However, these measures should not be considered as a substitute for or superior to the measures of financial performance prepared in accordance with GAAP. Please refer to Page 2 of the Investor Presentation and the company's latest public filings with the Securities and Exchange Commission for additional information. I will now turn the call over to Scott.

Thanks, Liam, and welcome, everyone, to our fourth quarter and full year 2025 results call. The fourth quarter rounded out another very strong performance year for SiriusPoint. Our disciplined underwriting strategy, customer-first mindset and relentless focus on delivery means we have a lot to be pleased about as we look back on our progress in 2025. Our top line for the year grew 16%. We improved the quality of our underwriting earnings year-over-year by 1.5 points. We grew our diluted book value per share by 28%. We delivered a 49% increase in operating earnings per share over prior year, and our leverage will reduce to an all-time low of 23% by the end of February. Our 2025 operating return on equity of 16.2% has improved for the third consecutive year and more importantly, outperformed against our 12% to 15% across the cycle target. The performance momentum I have talked about many times in these calls can be seen in the metrics that we've delivered in 2025. Looking at the fourth quarter in isolation, we delivered operating return on equity of 17.1% with a 44.9% return on equity on a GAAP basis as we closed the sale of Armada for $250 million. Our diluted book value increased by $1.70 in the quarter as a result. We continue to produce strong underwriting results with a Core combined ratio of 92.9% despite some historical one-offs in acquisition costs, which Jim will unpack for you. In addition, the fourth quarter saw a strong growth trend continue with gross written premiums growing 18%. Turning back to look at 2025 as a whole, there is much to be proud of beyond the financial headlines. We simplified our ownership structure through the closing of the CM Bermuda transaction in the first quarter. We earned positive outlook upgrades from 3 of our rating agencies. We saw employee engagement scores rise again to an all-time high. We completed the sale of Armada MGA and announced the sale of Arcadian MGA, which crystallized $390 million of liquidity and almost $200 million of off-balance sheet value while agreeing long-term capacity deals on underwriting. Finally, it has been important to attract top talent to the company while growing talent internally. We have had great momentum. And in 2025, we welcomed 18 senior leaders to the company as well as promoting 6 from within. Focusing back on our full year 2025 operating return on equity of 16.2%, there are a number of important points I would like to make. It is ahead of our 12% to 15% across the cycle target, having only set this 12 months ago and is the highest the company has achieved. We have also improved this metric every year for the past 3 years as we execute hard to build performance momentum across all of our business lines. Despite our return on equity target being an annual one, we have managed to deliver either within or above our range in every quarter this year despite impacts from events like California wildfires. We believe this is an important evidence point to our lower volatility portfolio and the track record we continue to build demonstrates our approach to underwriting, risk management and capital allocation. I want to take a moment to briefly focus on Slide 9. Even though it is one that we've included for a while, it is actually a very important one to pause on at the end of another calendar year. It clearly shows the underwriting track record we have been building since we reshaped the portfolio late in 2022. Since the third quarter of 2023, our combined ratio has been relatively stable and benchmarks well against our peers. We do recognize that insurance market conditions will be tougher in 2026, but it is also important to highlight that not in every market. We strongly believe our diversified portfolio and distribution focus on partnering with specialist MGAs positions us well to maintain our current levels of performance. It is worth noting that in 2025, 60% of our growth came from lines that are less correlated with P&C pricing cycles with accident and health being the largest contributor. The last quarter of '25 and the start of 2026 has been in line with our planning assumptions. Our focus will be on underwriting performance first over growth. Slide 10 focuses on volatility. I want to briefly touch on 2 actions, which help us to deliver against our lower volatility strategy, which we've added some new slides for this quarter. Firstly, as part of this strategy, we do target higher growth in insurance over reinsurance. We continue to believe the growth opportunity in insurance is more compelling in order to meet or exceed our target ROE year in, year out, while operating within the risk corridor we are comfortable with. That said, reinsurance is a key part of our business mix and many of our relationships with MGAs can either start as a reinsurance relationship or be a blend of reinsurance and insurance. This mix of capabilities is compelling both for us and for our partners and gives us and them great flexibility. We will also be opportunistic in reinsurance, where we see rates driving returns that are commensurate with the volatility and risk that we take and that fit within our overall portfolio volatility appetite. We are happy to allocate capital for these opportunities, and we'll continue to do so in 2026 as they arise. Our evolution over the last few years has meant that roughly half of our premiums are now U.S. specialty, and this is by far our largest underwriting platform. Secondly, our Accident & Health business is a strategically important part of our portfolio. With a long track record of high returns, its low volatility and low capital intensity acts as a volatility shock absorber to some of the other lines we write outside of A&H. We manage this mix carefully and dynamically to achieve our overall strategic aim of a lower volatility portfolio. Our Accident & Health gross written premiums grew by 23% in 2025 to around $1 billion. And overall, it makes up around 27% of our business mix. It also has a low correlation to wider P&C pricing and market trends. The profit consistency of Accident & Health, which boasts over 20 years of profitability, allows us to plan a wider portfolio mix with high levels of confidence. Following the sale of Armada in October, we now have 100% owned A&H MGA, IMG, which is consolidated into our P&L. IMG is a core part of our future plans. It drives a strong set of fee income profits in its own right as well as providing around 1/4 of the gross written premiums to our accident and health underwriting business, underlining its strategic importance. We believe the combined A&H underwriting business and IMG is compelling strategically. In 2025, we appointed a new CEO for IMG, Will Nihan. We also recently announced a small acquisition of Assist America. Assist America has been privately owned since it was founded in 1990 and provides global emergency travel assistance services to insurance companies worldwide. The client base includes many of the leading insurance companies in the U.S., Asia and the Middle East, widening our worldwide offering in these services and building on the already strong U.S. and European infrastructure we have at IMG. With a target addressable market of around $4 billion in medical and travel assistance services, we believe the acquisition is a great opportunity to further build out our service fees. Following completion and integration in 2026, we expect the fully integrated business to add around $4 million to $5 million of EBITDA annually. More recently, we also announced the acquisition of World Nomads by IMG. World Nomads is a global travel insurance platform with a strong recognizable lifestyle brand and distribution model. The acquisition presents the opportunity to increase our trip cancellation premiums and revenues and meaningfully expand our global distribution capabilities. These are areas that we have grown significantly over the past 12 months under the IMG brand. Following completion and integration in 2026, we expect this business to also increase EBITDA by around $4 million to $5 million annually. I would like to welcome our new colleagues from Assist America and World Nomads to IMG and the SiriusPoint Group. We expect our IMG business to generate over $30 million of fee income and over $35 million of EBITDA in 2026. The [ adding ] value of IMG on our balance sheet at year-end was $77 million. And although this will increase upon completion of the new acquisitions, we continue to strongly believe it is undervalued relative to IMG's enterprise value and as a result, understates SiriusPoint's overall book value. Looking more holistically at the acquisitions, these investments into IMG and our A&H business reinforce the importance of both the specialty as part of our portfolio and our diversification from capital-light fee income. We strongly believe these are additive to our story and performance momentum. Touching briefly on our distribution relationships with MGA partners. The fourth quarter saw us add 3 new partners who we have spent several months getting to know and doing due diligence on. As I have mentioned many times before, we take a very disciplined approach when onboarding new distribution partners. We reject over 90% of opportunities presented to us and we will only partner with MGAs who we believe we will work with on a long-term basis and where we have an aligned philosophy in relation to underwriting excellence and data sharing. As a general principle, we also take our time with new partners and taking underwriting risk. This slide shows this. While roughly 1/3 of our partners have been onboarded in the last 2 years, their premiums make up under 10% of our MGA premium mix. Higher premium volumes with partners where we have greater historical experience is core to our philosophy and approach, which we think makes a lot of sense. Almost all of our partners risk share with us and have skin in the game. We think this is an important part of the relationship. A few points from me to close before I pass across to Jim to go through the financials in more detail. Since our third quarter results, we have now closed on the sales of Armada and Arcadian for a combined value of $390 million and the proceeds have been received. Armada closed in the fourth quarter, and the sale is now included in our financials, whilst Arcadian closed at the end of January and so will be included in our financials in the next quarter. As a reminder, Arcadian will be less significant from a capital and book value perspective, given the $96 million value recognition we took upon deconsolidation in the second quarter of 2024. As we announced last quarter, we intend to use part of these proceeds to fully redeem the $200 million worth of 8% preference shares next week at their upcoming rate reset. We announced this formally via an 8-K filing at the end of January. This will reduce our leverage ratio to 23% by the end of February, which is a historic low for the company and is actually below the levels we were operating at before the settlements agreed with CM Bermuda in 2024. We believe this is a good use of funds, provides us with greater capital flexibility and points to a continued strong balance sheet management. Our overall capital remains strong, and our fourth quarter BSCR ratio has improved to 247%. Pro-forma for the upcoming Preferred Share Redemption, it is still a very healthy 232%. Our standard practice is to assess our capital position at the end of each year. And so today, we are pleased to be announcing our intention to repurchase $100 million of our outstanding common shares over the next 12 months. At our current market price, this represents over 4% of the total shares outstanding. We expect this to be accretive to EPS and ROE throughout 2026 and book value per share by 2027. We believe our strong capital position and the continuing earnings profile of the business leaves us in a very strong position to fund growth opportunities in 2026. Before I conclude, I want to briefly look back to this time last year. 12 months ago, when delivering our 2024 full year results, I commented how our repositioning was materially complete and that SiriusPoint was a business with an earnings profile of $300 million. This year, we have demonstrated that again, delivering operating income of $310 million. Importantly, on an operating earnings per share basis, this is up 49% year-over-year, meaning our shareholders are benefiting from our continued execution and value creation. And with that, I will end back where I started. This year saw consistent and improving underwriting performance, strong premium growth, book value and operating earnings per share growth and significant value brought onto the balance sheet from our ongoing MGA rationalization. We continue to lay further foundations for continued profitable growth, investing in people and technology to improve our performance further. We achieved another record operating return on equity, which could not have been possible without our greatest asset, our people. The team has worked tirelessly to achieve these results, and I could not be more proud of them or grateful to them for their unwavering support. I do not take it for granted. While 2025 was another strong year for the company, complacency is not in our DNA. We are relentless in our ambition to become a best-in-class specialty underwriter, and 2026 is another chance for us to showcase our progress. We remain focused and determined to deliver against our ambitions, and we are positive about our outlook. And with that, I will pass across to Jim, who will take you through the financials in more detail.

Thank you, Scott. Let me begin by echoing previous comments on how pleased we are with our financial results this quarter and for the year and the progress we are making to become a best-in-class underwriter. Net income for 2025 increased 141% or [ $216 million ] to $444 million as we delivered excellent financial results on a core and consolidated basis. Return on equity was 22.1%. The full year underwriting results were strong on an attritional and as-reported basis as our diverse portfolio continues to showcase profitable, low-volatility premium growth at attractive combined ratios. Starting with our fourth quarter results on Slide 18. We had a strong quarter, reporting operating income of $86 million or $0.70 per diluted share and net income of $240 million or $1.97 per diluted share. Core gross written premiums grew by $134 million or 18% in the quarter versus the prior year. A continued significant driver of our growth was Accident & Health that year-over-year grew 20%. Apart from Accident & Health, core Gross Written Premiums grew at a strong double-digit rate in aggregate compared to the prior year. Turning to our underwriting results. Our core combined ratio of 92.9% was driven by strong attritional loss results, modest catastrophe losses and a couple of legacy and one-off items that affected our acquisition and OUE ratios. The impact of these items added about 2 points to the acquisition ratio. This was partly offset by a point of favorability within OUE related to the new Bermuda tax credits and a onetime compensation benefit. We earned Net Service Fee Income of $4 million with a service margin of 9.4%. As a reminder, Net Service Fee Income can be a bit lumpy due to seasonality trends. Investment income for the quarter was $69 million, flat to last year despite the lower asset base following the CM Bermuda shareholder buyback. Net investment income continues to benefit from a supportive yield environment. Last, the quarter benefited from a lower effective tax rate due to Bermuda tax legislation and foreign exchange rate changes, partially offset by higher effective tax rate associated with the Armada transaction. On a go-forward basis, excluding potential changes in tax laws and foreign exchange rates, we are modeling an effective tax rate of approximately 19%. In summary, we had a strong fourth quarter that continues to demonstrate our ability to profitably grow and create meaningful value for our shareholders. Moving to our full year results on Slide 19. Themes here are consistent with the fourth quarter. Strong execution, disciplined underwriting and focused capital management is producing profitable growth. Core Gross Written premium, Net Written Premium and Net Earned Premium grew 16%, 19% and 18%, respectively. Common shareholders' equity increased $532 million to $2.3 billion, resulting in diluted book value per share, excluding AOCI, growing 24% or $3.46 to $18.10. Moving to Slide 20 and double-clicking into our underlying earnings quality. Our underwriting first focus continues to deliver strong underlying margin improvement. The attritional combined ratio chart on the left-hand side of the page strips out the impact from catastrophe losses and prior year development as these inherently vary over time. We believe this metric is useful to examine the quality of our underwriting income. Our 91.6% core attritional combined ratio for the year represents a 1.5 point improvement versus the prior year period of 93.1%. The attritional loss ratio improved 0.8 points as enhanced risk selection lowered the attritional loss ratio by approximately 1.6 points, partially offset by 80 basis points of mix headwind. For the year, acquisition costs increased 0.3 points, offset by 1 point of OUE improvement. OUE continues to align with our guidance of 6.5% to 7%. Looking forward, for 2026, we project a similar OUE expense ratio of 6.5% to 7%. The right-hand side provides a bridge from our underlying earnings quality to our core combined ratio. This displays 2.8 points of favorable prior year development in the year, partially offsetting 2.9 points of catastrophe losses that are largely due to the first quarter California wildfires. Turning to our Insurance and Services segment results on Slide 21. Gross written premium increased $106 million or 23% to $556 million in the quarter, driven by strong growth within all of our specialties. Year-to-date, gross written premium increased $473 million or 26% to $2.3 billion. The Insurance and Services segment fourth quarter combined ratio is 93.3%. As mentioned earlier, this contains some one-off noise in the quarter, particularly on acquisition costs. Our full year combined ratio of 91.7% is indicative of the current run rate as we head into 2026. Double-clicking on our Accident & Health book of business. As Scott outlined earlier, this book of business is strategically significant within our portfolio, acting as a volatility shock absorber, allowing us to write more volatile business elsewhere. During the year, premiums for this specialty grew 23% and have now reached almost $1 billion. It accounts for 43% of the segment's gross written premium. The areas we focus on are supported by a market environment that meets our risk-adjusted return requirements. We continue to see growth opportunities within Accident and Health. Turning to casualty. Full year premiums have increased by 8%, driven by strong rate offset by decreased volumes. Casualty is a broad term. And overall, there are many classes we remain cautious on due to pricing challenges, notably public D&O and commercial auto, where, as previously indicated, we have substantially reduced premium and exposure. Correspondingly, there are pockets we are seeing strong opportunity in such as general liability. In terms of pricing, our casualty writings continue to be firm, particularly on excess layers benefiting from rate in excess of trend. Other specialties continue to see strong growth, highlighted by Surety growth in 2025. The focus on these specialties is deliberate as we continue diversifying our portfolio and writing lines that have less correlation to the wider P&C pricing cycles. Within the marine book, cargo and hull generally saw single-digit rate decreases, while marine liability rates saw low single-digit increases. Marine war rates continue to fluctuate due to regional geopolitical tensions. Looking at energy, liability rates remain positive and averaged 5%, while upstream is more challenged. Last, premium for our Property Specialty is strong on both a fourth quarter and full year basis. This is driven by growth from our international business, where we are writing select opportunities, mostly in the U.K. This business has a controlled volatility profile with a focus on lower limit residential and small, medium-sized enterprise properties protected by excess of loss reinsurance for larger events. Moving to our Reinsurance segment results on Slide 22. This quarter, gross written premium increased $29 million or 9% to $341 million. We saw growth in casualty offset a decrease in property premiums with other specialties broadly flat. On a full year basis, gross written premium increased by 3%, while on a net basis, premiums written increased by 2%. The combined ratio for the quarter decreased by 1.1 points to 92.1%, driven by a lower OUE ratio, while the full year combined ratio of 91.8% increased versus the prior year, driven by lower levels of favorable prior year development. Double-clicking into Casualty Reinsurance. Gross written premium increased 7% for the year. At 1/1 renewals, casualty reinsurance saw pricing in line with expectations as underlying rate performance remained stable. The January renewals did not see any deterioration in terms and condition. This quarter, other Specialty gross written premiums was broadly flat and up 4% for the full year. The reduction is the result of reduced aviation premiums. January renewals saw flat pricing for both excess of loss and pro rata treaty classes in aviation, while direct and facultative rates for major airline renewals saw 10% to 50% increases in the fourth quarter with U.S. airlines seeing the greatest rate changes. We welcome the firming pricing environment as we seek further rate increases to achieve rate adequacy. Elsewhere in other specialties, credit and bond pricing continues to be pressured, stemming from favorable historical results and ample market capacity. Within property reinsurance, premiums were down in the quarter and in 2025. At 1/1, we saw U.S. property catastrophe reinsurance rates decreased roughly 15% to 20%. International property catastrophe reinsurance pricing also saw declines at 1/1 with some accounts failing to meet rate adequacy benchmarks. In response, we came off certain programs to reallocate capital to better opportunities. Slide 23 shows our catastrophe losses versus peers and the reduction in the volatility of our portfolio. Following portfolio actions taken before 2022, we have materially decreased our catastrophe exposure in order to deliver more consistent returns to our shareholders. We now boast a 3-year track record of low volatility in our combined ratio due to catastrophes. At 1/1 renewals, we took the opportunity to further strengthen our risk transfer of property catastrophe risk by purchasing a new property aggregate program covering select property catastrophe events. This cover became available with strategic partners at attractive levels based on our underwriting track record. For 2026, our new aggregate cover attaches at $90 million of accumulated catastrophe losses throughout the year. This structure provides meaningful protection against the frequency and clustering of small- to medium-sized events. Furthermore, our 2026 combined retrocession protection is more efficient than 2025, particularly in managing our volatility. Importantly, we were able to achieve this improved efficiency at a lower overall cost than the prior year while also increasing the total limit purchased. Taken together, these actions enhance the resilience of our earnings and capital position and provide us with greater confidence in delivering our financial targets. As of February 1st, we purchased multiline aggregate reinsurance coverage with $100 million annual limit designed to limit retained underwriting volatility in key lines of business of property reinsurance, aviation, marine, energy, among other perils. Catastrophe losses in the year represented 2.9 points of our combined ratio and were largely driven by the first quarter California wildfires. We have a comparatively low loss ratio, demonstrating the benefits of our diversified portfolio. Property catastrophe premiums are just 5% of the overall business mix. Moving to Reserving. Our strong history of prudence is shown on Slide 24. For the quarter, core favorable prior year development was $15 million and $22 million on a consolidated basis. This marks the 19th consecutive quarter of favorable prior year development. Our track record of consecutive favorable releases significantly exceeds the average duration of our insurance liabilities, demonstrating our prudent approach to reserving. Additionally, we show here the strong level of protection we have on each of our 3 loss portfolio transfers that were completed in 2021, 2023 and 2024. In short, we have significant limit remaining on each of these treaties. Turning to our strong investment results on Slide 25. Net investment income for the year was $275 million, down slightly from the prior year period as a result of a lower asset base following the first quarter CM Bermuda transaction settlement. This quarter, we reinvested over $500 million. New money yields were in excess of 4% as we increased cash and treasury holdings in advance of our upcoming preferred retirement. Our portfolio continues to perform well. There were no defaults across the fixed income portfolio. We are committed to our investment strategy that focuses on high-quality fixed income securities. 81% of our investment portfolio is fixed income, of which 98% is investment grade with an average credit rating of AA-. Our portfolio duration was 3.2 years, up from 3.1 years at the end of the third quarter. Moving on to our Slide 26, looking at our strong and diversified capital base. Our fourth quarter estimated BSCR ratio increased to 247%, up 22 points in the quarter following the Armada MGA sale. On a pro-forma basis, accounting for the Series B preference share redemption, the BSCR ratio is 232%. Evidencing the strength of our capital position, we provide a stress test scenario for a 1 in 250-year PML event. Post this hypothetical event, our BSCR ratio is strong and above rating agency capital model targets. Looking at our balance sheet on Slide 27. We continue to have a strong balance sheet with ample capital and liquidity. During the quarter, the leverage ratio fell to 28%, driven by an increase in shareholders' equity. Our leverage levels remain within our target and will fall to 23% following the redemption. As Scott mentioned earlier, today, we are announcing a common share buyback intention of $100 million of shares over the next 12 months. We believe this action will be highly accretive to ongoing shareholders. Lastly, we view our balance sheet to be undervalued in relation to the consolidated MGAs, which we own, namely IMG, that is a core component of our future offering. Our book value now includes the sale proceeds of Armada. In the first quarter, our book value will increase by a further $25 million related specifically to the completion of Arcadian. With this, we conclude the financial section of our presentation. This quarter saw a continuation of strong double-digit growth in our top line that delivered a Core Combined Ratio in the low 90s with continued attritional loss ratio improvement. This is our eighth consecutive quarter of attritional loss ratio improvement. Operating return on equity for the quarter of 17.1% contributes to a full year operating return on equity of 16.2%. 2025 marks another year with a strong return on equity at or above our 12% to 15% across the cycle target. We've built a track record of delivery. This quarter's results further validate the significant progress we have made to becoming a best-in-class specialty underwriter. With that, I hand the call back over to the operator. We can now open the lines for questions.

[Operator Instructions] And our first question comes from Michael Phillips with Oppenheimer.

Congrats on the quarter and the year. I know you guys are doing. First question would be kind of a summary, I think, of what Scott opened with and that Jim kind of commented on. Scott, you said tougher market conditions in 2026, but maybe maintaining the current levels of profitability. And then Jim was talking on insurance about, I think you said like the 91.7%, 91.8% is a good run rate. And obviously, insurance had an elevated acquisition cost for the year. So I guess, first off, just to confirm for insurance, that 91.7%, 91.8%-ish number, is that what you mean, not much pressure on that over the next year? And then I guess, because the acquisition costs, maybe if you could speak specifically to, I guess, what you call the attritional loss ratio, I think in the year, it was 60.8%. So how do you see that 60.8% for insurance trending over the next year, given your comments?

Mike, thank you. Appreciate the questions, and thanks for your opening comments. Look, the way I think that we're thinking about '26 is in line with what I said, which is, look, we recognize that there are parts of the market that will be tougher. I think Jim gave an example of that in property [ cat ] but he also gave a context for us, which is that's sort of 5% of our overall premium. So I think the way that we're thinking about '26 is where we don't see the opportunity to make a return commensurate with the risk. The great news, Mike, is that we can move capital quickly around the group and seize other opportunities, which then takes us, I think, to a wider portfolio, where I genuinely believe both from the lines of business that we write, Accident and Health, Surety, et cetera, we are able to deploy capital in areas where the rating pressure is not the same and is less correlated, if you like, to the wider P&C. And in addition to that, I do think that the distribution focus we have on MGAs working with what I would call very specialist niche partners who really give true dedicated specialist advice to customers. I do think there's partial insulation from some of the wider market pressures on general rate. So look, I think that's sort of how we're thinking about '26. I think importantly, Q4 and sort of opening of Q1 in Jan was in line with our expectations. So there was no sort of negative surprises. Things like aviation that Jim mentioned for us, I think I highlighted that, Mike, on my Q3 call, I said aviation need rate. I think everyone in the market have been saying that. And we carried high on average, high double-digit teens rate in aviation. More to do, but I think that's really a good step forward. So look, for us, I think we are off and running in '26 in a good space. I think that the combined ratio number that you mentioned for insurance, look, indicatively, that's a good run rate as we go in to 2026. We'll try and do better, I promise you. But we think that's a good level of return for the risk that we're taking. And I think your comment on loss ratio, I think, look, we're not going to trade margin where we don't see return for the risk. The great news, though, is we've got a really strong pipeline of growth opportunities that we'll be very disciplined about in evaluating, but we believe that we've got other opportunities for our capital. So look, I think that gives you, hopefully, my quite a comprehensive answer. I'll pause in case Jim wants to add anything else to that.

Yes. So yes, I agree with everything that Scott highlighted. I think those are good comments. I think the biggest thing, Michael, that I would point you to as you think about us and I think the number that Scott highlighted and that I highlighted earlier is the right number to begin with. I'd say there's probably potentially when you think about us on a go-forward basis, maybe 0.5 point that you could kind of shift over time, plus or minus related to mix and how it actually comes in over kind of 2026. I would not be confused by that. One of the comments that I highlighted inside the quote was kind of the component of mix, right? And that we have continued to improve on a loss ratio performance basis, inclusive of that mix element. That's actually a real positive in total because it means that we're getting more leverage actually on our premium to surplus ratio. So different things kind of come in at different ratios. But in short, what I would say is I'd start exactly with that 91.7%. And I would think depending on how mix comes in over the year, where we outperform, where we see the best returns from a capital perspective, that the right way to think of that is maybe plus or minus kind of 0.5 point as a starting position from that kind of given just how things come together.

Okay. That's very helpful, both of you. Appreciate it. I guess next question is on the fee income side and just trying to think about 2026 here. I guess, first off, can you say of the 2025 number, I think the $42 million, how much of that was Armada?

So I would tell you that generally speaking, you're in a range of about $26 million inside there. I would think about it as like a run rate of about $30 million with potential of kind of post completion of everything, I think you're looking at about a run rate base expectation of around $40 million.

Sorry, Jim, that $40 million is what, what do you mean by that.

That include the 2 bolt-on acquisitions, which won't be up to full power, Mike just to be very clear, right? So the guidance that we've given for '26 is that obviously we'll be focused on integration. As an example, World Nomads won't complete until later on this year. But our aim when they're up to full power and fully integrated within IMG is they will be $40 million and hopefully plus of EBITDA. We'll try and do better. In addition to that, for World Nomads, which is obviously underwriting business, we will obviously channel that across over time into a wider Accident & Health underwriting division as well. So hopefully, that knits that together for you as well, Mike.

It does. Yes. I guess that's what I was trying to get at. So 2026, we'll see probably the 30-ish that you're guiding to, obviously, it is decline from '25 level, but that does not include the 2 acquisitions, right? So you won't see any benefits from, say, World Nomads until 2027?

Not materially, Mike. And that's why, look, I mean, plus or minus 1 or 2 perhaps, but not materially. That's why we're trying to be explicit in the guidance going forward.

Okay. No, perfect. Just want to clarify. And then I guess just last one for me for now is on just the growth. And you've talked a lot about how you've got these lines that are contributing more than 60% in the quarter of the year was from A&H and Surety. I guess if we can focus on Surety for a second. I get a lot of questions on this of how sustainable that is over the next 2 years. How much of your Surety business in 2025 came from either government infrastructure growth or from data centers that was a big boom in 2025 and therefore, how much of that is sustainable over the next year or 2?

I'll make a comment and then Jim can jump in, Mike. So look, I think the sort of data center aspect and stuff like that is a red heading. So look, when we think of the profile of what we have, we view it as sort of pretty sustainable on a go-forward basis, Mike. So we're not projecting any sort of falloff for the 2 areas that you've highlighted, although I recognize within the wider marketplace that those are absolute pressures. But Jim, anything you want to add to that?

Yes. I would just say that minimal amounts of kind of our book follow that. I mean, we feel pretty good about where we've entered. Again, we're kind of at the early stages, I would say, in terms of where some of our relationships are inside of that, not from how long we've been partners or other, but we're at, I would tell you, kind of more the early innings of kind of the total build-out from a premium perspective on the Surety side versus necessarily kind of our longer-term kind of run rate stabilized portfolio. So I think we've got some nice tailwinds there and feel pretty good about the growth in 2026.

And Mike, just to amplify the point that Jim made the just now, which I appreciate is a wider than Surety comment, which is, look, the reason we've tried to give some additional disclosure, which we started at Q3, particularly around our MGA relationships is I think you can really see the difference between number and premium from what I would term newer MGAs. Of course, that's not an exact science, which I completely get. But I think you can see that we're being thoughtful and cautious in newer relationships. And so just to amplify the comment that Jim made, that's really the slide that shows we have potential from existing partners as well as a healthy funnel of opportunities to work our way through from a diligence perspective.

Our next question comes from Andrew Andersen with Jefferies.

On the insurance segment, I think you talked about casualty growing 8% for the year. I think that's about 30% of the overall segment. Could you maybe just talk a bit more about how you're seeing kind of the rate environment into '26? Are you thinking still kind of staying firm or harden further? What is the outlook for casualty insurance?

Yes. So thanks for the question. Generally speaking, relative to the specialties in the areas where we focus, we think -- and what we're seeing is that rate is broadly moving in line with trend. We're seeing relatively disciplined activity, people being thoughtful about the lessons that I think we learned kind of in the 2019, '20, '21 kind of time period and some of the surprises. You've kind of just seen some of the development and other components kind of work their way through the books on those things over the last year. And I think it was more than what folks expected. And so I think people are looking at the environment with a healthy thought process, and we feel pretty good about where we're at and what we expect kind of going forward.

And Scott, I think you talked about attracting some more talent and doing some more senior hires. Where have some of these focus areas been on? Is it kind of specific lines of business where you're seeing growth opportunities?

Right across the firm, Andrew. So we're obviously attracting a underwriting talent to the organization, but I would also say we're attracting sort of functional talent, et cetera, as well as we sort of strengthen our capabilities. The great news is we're attracting people from organizations with good caliber and we're attracting really high-caliber individuals. That's very different, Andrew, to when I first arrived when obviously, the company was in quite a different position. Also, and I want to just sort of emphasize this point as well, really pleasingly, the talent from within is also growing and prospering. And so we feel in a really good spot. When we are -- really simply, when we're advertising roles, we've got a really good internal pool to think about and consider, and we're really attracting external people to the organization. I think we've caught people's attention.

And maybe last one, back to insurance. The retention rate has been improving over time. I guess, Jim, do you still see some more opportunity to retain a bit more business here into '26 and '27? And is that specific on any one line?

Yes. I mean we continue to see opportunity there. I think what I would highlight to you is more a risk management prudence mindset. We start with a really thoughtful kind of composition. We make sure that we get to know our partners as well as kind of the components in the market. And then we -- through time, as we have everything kind of in place, the data feeds, the interactions, just a really great way of kind of forecasting for in the future that we feel like gives us kind of a high confidence, then you see us gradually kind of increase our net in those components. And so that's a trend again that I think is going to continue as we move forward in the future, but it's going to be done with where we see the appropriate returns on capital. It's going to be done with the same type of risk management and prudence that we've kind of taken to date. So we feel good about it. And yes, we think there's additional opportunity there, but it's going to be prudent and disciplined.

Yes. And Andrew, I just want to amplify what Jim said at the end. Look, we think -- I think I called it, it makes a lot of sense when I gave my overview. But we think that approach really is the hallmark of sort of our discipline and should give our investors confidence and comfort. We're not chasing growth right? We could turn taps on if we wanted and take more growth. We think our approach is based around things like underwriting philosophy, getting to know people, data sharing. And we just think that's a really sensible approach. But there's no question we've got potential within the pipes, and we've got new potential to evaluate outside the pipes, but we will be disciplined.

[Operator Instructions] We'll go next to Mitchell Rubin with Raymond James.

This is Mitch on behalf of Greg Peters. Congratulations on the quarter and the year. So with roughly 2/3 of premiums now coming from insurance and services, how do you see that mix evolving over the next few years? And is there a longer-term target for where you'd like that balance to settle?

Mitch, thanks for your comments. Very kind, and thanks for your question as well. Look, I think we've given a very strong steer that we want to grow insurance over reinsurance. I think it fits within our sort of strategic ambition of lower volatility, but I wouldn't want that misinterpreted, which is why I elaborated that reinsurance is a very important part of our armory when we approach the market. Not only does it give us flexibility in lines of business to come at them in different ways, but it's actually an incredibly useful tool in working with our MGAs. So I really want to make sure that, that message lands because it's really an important part of how we do business. We haven't given a specific target, and I'm loath to do that. And the reason for that is because it can ebb and flow. But I would say to you that proportionately, insurance is growing much quicker than reinsurance. You can see that in the numbers that we disclosed this year. Insurance and services grew gross written premium 26%, reinsurance 3%. Those can move around quarter-on-quarter, sometimes year-on-year. But I think indicatively, we expect the trend to increase.

And just on the $100 million buyback, how should we think about the cadence? Is that going to be front-loaded, more evenly paced or opportunistic based on valuation?

So look, I'll kind of -- we'll tag team this a little bit. What I would highlight is likely to be a little bit kind of opportunistic, but also with we feel like we're -- we feel we're in a really attractive position from a market perspective or other. We see a lot of value in the company. We think that there's a good value trade here for our ongoing shareholders. And so we're going to be disciplined and thoughtful about that. But we're going to take a programs [ mount ] and we'll see how things kind of trade from a market perspective. So some opportunistic, but likely to play out throughout the year with potentially some front-loading kind of given where things are at today.

Yes. Look, the same mix actually, which is, look, I think the reason we said over 12 months is want to give ourself some flexibility. I think that's a good thing. The most important part of it is we think it's good for shareholders. And therefore, depending on where the price moves, it could be even better for shareholders. There's no liquidity constraints in terms of when we might do it. The great news is Jim is get the money in the right place to do it when we need to do it, and we'll be opportunistic. And if that means it's more front-loaded than back loaded, then we are very happy to take that. We'll do what's right for shareholders.

And this now concludes our question-and-answer session. I would like to turn the floor back over to Scott Egan for closing comments.

Yes. Listen, thank you very much, everyone, for joining. Obviously, the full year results is a very important one for SiriusPoint. I really just want to end with a few key takeaways and messages from our results. Number one, this is our third year of operating ROE improvement, and there really is a strong performance momentum within the organization. That's number one. Number two, our attritional loss ratio improvement, and therefore, our quality of earnings continues to improve year-on-year. We are very proud of that. And I think that's a really important measure for the business as we go forward. Three, there is strong growth momentum within the company, and I think we've outlined our disciplined approach to that. Our book value has increased by 28% in the year. That's added significant value for our shareholders. And we are positioned very well from a balance sheet perspective to take opportunities as they present themselves. So in summary, the future is bright for SiriusPoint. Thank you very much for joining. We appreciate your questions and your attendance. Have a good day.

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines, and have a wonderful day.