~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Easterly held a special meeting of Easterly stockholders on November 2, 2018 to approve the completion of the transactions contemplated by the Merger Agreement. Easterly Acquisition Sponsor, LLC (the "Sponsor") and Easterly's other stockholders approved each of the proposals presented at the special meeting. After the special meeting, but prior to the consummation of the Merger, certain Easterly public stockholders exercised their redemption rights as provided for by Easterly's charter. In total, out of the Trust Account balance of $149.0 million, there were $109.7 million of redemptions by Easterly public stockholders, which decreased the amount of cash in the Trust Account available for general corporate purposes following the Merger. After the redemption of shares held by Easterly's public stockholders, there was $39.3 million in the Trust Account. This resulted in the issuance of 2,280,241 common shares to Easterly public stockholders.

Pursuant to the letter agreement among Easterly, the Sponsor and the Company (the "Sponsor Letter"), the private placement warrants issued to the Sponsor at the closing of the Merger were cancelled. Pursuant to the Merger Agreement, each issued and outstanding public warrant was converted into a warrant exercisable for Company common shares. The number of Company common shares subject to converted warrants was equal to the number of shares of Easterly common stock subject to each Easterly warrant immediately prior to the closing of the Merger multiplied by the Exchange Ratio, and each converted warrant had an exercise price per Company common share equal to the exercise price per share of Easterly common stock subject to such Easterly warrant immediately prior to the closing of the Merger divided by the Exchange Ratio. This resulted in the issuance of 6,088,535 converted warrants.

In connection with the closing of the Merger, the Company completed a private placement of Series B preference shares, common shares, and warrants (the "Sirius Group Private Placement") at a price per share equal to (i) 1.05 multiplied by (ii) the Sirius Group September 30 Adjusted DBVPS, or $17.22447. Investors in the Sirius Group Private Placement included affiliated funds of Gallatin Point Capital, The Carlyle Group, Centerbridge Partners, L.P. and Bain Capital Credit (the "Preference Share Investors"), together with certain employees, directors and "friends & family". The Sirius Group Private Placement raised proceeds of $226.1 million, resulting in the purchase of:

•

In connection with the Merger, Sirius Group implemented the Employee Share Purchase Plan ("ESPP"), which provided all employees of Sirius Group with a one-time opportunity to purchase between 100 and 1,000 Company common shares at a price equal to 85% of market value for the first 100 shares and 100% of market value for the next 900 shares. For this purpose, market value of the Company common shares was equal to 1.05 times the Sirius Group September 30 Adjusted DBVPS. Employees had the option of paying for the shares upfront or, in the case of employees who are not executive officers, through a loan that is repaid over a two-year period through payroll deductions. Through the ESPP, 405 employees purchased 149,236 Company common shares prior to the consummation of the Merger, with a cost basis of $2.6 million.

Gross proceeds of the cash in the Easterly Trust Account assumed by Sirius Group upon the closing of the Merger, the Sirius Group Private Placement, and the ESPP sum to $268.0 million.

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

In connection with the Merger, the Company and CM Bermuda Ltd. ("CM Bermuda"), the sole holder of the Company's common shares prior to the Merger, entered into a redemption agreement, dated November 2, 2018 (the "CM Bermuda Redemption Agreement"), pursuant to which, effective as of the closing of the Merger, the Company redeemed 9,519,280 of the Company's common shares at a price per share equal to $17.22447 for $164.0 million, which was paid on November 16, 2018.

Also in connection with the Merger, on November 16, 2018 the Company completed a post-closing adjustment of $1.6 million that was settled in cash with CM Bermuda based on the reported book value per share of $16.44 as of September 30, 2018, pursuant to the Merger Agreement.

Sirius Group incurred certain contractual costs associated with the Merger of $9.0 million and $7.1 million of various legal, advisory, and other consulting costs for the Merger and the Sirius Group Private Placement that were charged to Additional paid-in surplus.

In connection with the Merger, the Company, IMG Acquisition Holdings, LLC ("IMGAH") and Sirius Acquisitions Holding Company II completed the transactions contemplated by its previously announced redemption agreement and the Company redeemed all of the outstanding Series A redeemable preference shares, which were held by IMGAH, for $95.0 million in cash. Effective as of the completion of the redemption, the parties terminated the registration rights agreement and the shareholder's agreement between the Company and IMGAH. In addition, the parties agreed that any remaining contingent consideration in respect of the IMG acquisition, will be paid in cash, not in Series A redeemable preference shares as previously contemplated in the agreement in respect of the IMG acquisition.

On August 16, 2018, Sirius Group acquired 100% ownership of WRM America Indemnity Company, Inc. ("WRM America") from WRM America Indemnity Holding Company, LLC for $16.9 million in cash. WRM America is a New York-domiciled insurer with a run-off book of business mainly comprised of general liability, educator's legal liability, automobile liability and physical damage, property and excess catastrophe liability. As part of the purchase of WRM America, Sirius Group acquired $3.1 million of indefinite lived intangible assets related to insurance licenses.

Sirius Group classifies its business into four reportable segments – Global Property, Global A&H, Specialty & Casualty, and Runoff & Other. The accounting policies of the reportable segments are the same as those used for the preparation of the Company's consolidated financial statements.

The Company's Global Property, Global A&H, Specialty & Casualty, and Runoff & Other reportable segments each have managers who are responsible for the overall profitability of their respective segments and who are directly accountable to the Company's chief operating decision maker, the Chief Executive Officer ("CEO") of the Company. The CEO assesses segment operating performance, allocates capital, and makes resource allocation decisions based on Technical profit (loss), Underwriting profit (loss), and Underwriting profit (loss), including net service fee revenue.

Segment results are shown prior to corporate eliminations. Corporate eliminations are shown to reconcile to consolidated Technical profit (loss), consolidated Underwriting profit (loss) and consolidated Underwriting profit (loss), including net service fee revenue.

Sirius Group does not allocate its assets by segment, with the exception of goodwill and intangible assets, and, accordingly, investment income is not allocated to each segment.

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Global Property consists of Sirius Group's underwriting lines of business that offer other property insurance and reinsurance, property catastrophe excess reinsurance, and agriculture reinsurance on a worldwide basis:

Other Property—Sirius Group participates in the broker market for property reinsurance treaties written on a proportional and excess of loss basis. For Sirius Group's international business, the book consists of treaty, written on both a proportional and excess of loss basis, facultative, and primary business, primarily in Europe, Asia and Latin America. In the United States, the book predominantly centers on significant participations on proportional and excess of loss treaties mostly in the excess and surplus lines segment of the market.

Property Catastrophe Excess—Property catastrophe excess of loss reinsurance treaties cover losses from catastrophic events. Sirius Group writes a worldwide book with the largest concentration of exposure in Europe and the United States. The U.S. book written in Bermuda has a national account focus supporting principally the lower and/or middle layers of large capacity programs. Additionally, Stockholm writes a U.S. book mainly consisting of select small regional and standard lines carriers. The exposures written in the international book are diversified across many countries, regions, perils and layers.

Agriculture—Sirius Group provides stop-loss reinsurance coverage to companies writing U.S. government-sponsored multi-peril crop insurance ("MPCI"). Sirius Group's participation is net of the government's stop-loss reinsurance protection. Sirius Group also provides coverage for crop-hail and certain named perils when bundled with MPCI business. Sirius Group also writes agriculture business outside of the United States.

The Global A&H operating segment consists of Sirius Group's insurance, reinsurance, and managing general underwriting ("MGU") units (which include Armada and IMG) that offer accident and health products on a worldwide basis:

Accident and Health insurance and reinsurance—Sirius Group is an insurer of accident and health insurance business in the United States, either on an admitted or surplus lines basis, as well as international business written through wholly-owned IMG. Armada business is written on an admitted basis. Sirius Group also writes proportional and excess reinsurance treaties covering employer medical stop-loss for per person (specific) and per employer (aggregate) exposures. In addition, Sirius Group writes some medical, health, travel and personal accident coverages written on a treaty, facultative and primary basis.

Specialty & Casualty consists of Sirius Group's insurance and reinsurance underwriting units which offer specialty & casualty product lines on a worldwide basis. Specialty lines represent unique risks where the more difficult and unusual risks are underwritten. Because specialty lines tend to be the more unusual or higher risks, much of the market is characterized by a high degree of specialization:

Aviation & Space provides aviation insurance that covers loss of or damage to an aircraft and the aircraft operations' liability to passengers, cargo and hull as well as to third parties. Additionally, liability arising out of non-aircraft operations such as hangars, airports and aircraft products can be covered. Space insurance primarily covers loss of or damage to a satellite during launch and in orbit. The book consists of treaty, written on both a proportional and excess of loss basis, facultative, and primary business.

Marine provides marine reinsurance, primarily written on an excess of loss and proportional basis. Coverage offered includes damage to ships and goods in transit, marine liability lines, and offshore energy industry insurance. Sirius Group also writes yacht business, both on reinsurance and a primary basis. The marine portfolio is diversified across many countries and regions.

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Trade Credit writes credit and bond reinsurance worldwide. The bulk of the business is traditional short-term commercial credit insurance, covering pre-agreed domestic and export sales of goods and services with typical coverage periods of 60 to 120 days. Losses under these policies are correlated to adverse changes in a respective country's gross national product.

Contingency underwrites contingency insurance for event cancellation and non-appearance, primarily on a primary policy and facultative reinsurance basis. Additionally, coverage for liabilities arising from contractual bonus, prize redemption and over-redemption is also offered. The contingency portfolio is diversified across many countries and regions.

Casualty underwrites a cross section of all casualty lines, including general liability, umbrella, auto, workers compensation, professional liability, and other specialty classes, written on a proportional, excess of loss, and primary basis.

Surety underwrites commercial surety bonds, including non-construction contract bonds, in a broad range of business segments in the United States.

Environmental underwrites a pure environmental insurance book in the United States consisting of four core products that revolve around pollution coverage, which are premises pollution liability, contractor's pollution liability, contractor's pollution and professional liability.

Runoff & Other includes the results of Sirius Global Solutions Holding Company ("Sirius Global Solutions"), which specializes in the acquisition and management of runoff liabilities for insurance and reinsurance companies, both in the United States and internationally, as well as asbestos risks, environmental risks and other long-tailed liability exposures.

The following tables summarize the segment results for the three months ended ~~June~~September 30, 2019 and 2018:



		For the three months ended June 30, 2019

(Millions)		Global Property			Global A&H			Specialty & Casualty			Runoff & Other			Corporate Elimination			Total

																			For the three months ended September 30, 2019
(Expressed in millions of U.S. dollars)																			Global Property			Global A&H			Specialty & Casualty			Runoff & Other			Corporate Elimination			Total
Gross written premiums	$	236.2		$	152.8		$	96.9		$	1.2		$	-		$	487.1		$	153.6		$	137.4		$	120.6		$	2.1		$	—		$	413.7



Net written premiums	$	191.6		$	120.6		$	89.2		$	0.3		$	-		$	401.7		$	103.7		$	104.6		$	113.2		$	0.8		$	—		$	322.3



Net earned insurance and reinsurance premiums	$	164.3		$	118.8		$	87.3		$	0.3		$	-		$	370.7		$	159.9		$	115.1		$	98.7		$	0.5		$	—		$	374.2
Loss and allocated LAE⁽¹⁾		(131.3	)		(71.8	)		(61.3	)		(2.4	)		-			(266.8	)	(184.4		)	(63.6		)	(85.5		)	(0.9		)	—			(334.4		)
Insurance and reinsurance acquisition expenses		(27.2	)		(36.0	)		(24.6	)		(1.8	)		12.6			(77.0	)	(29.2		)	(32.5		)	(27.1		)	(0.1		)	13.8			(75.1		)

Technical profit		5.8			11.0			1.4			(3.9	)		12.6			26.9		(53.7		)	19.0			(13.9		)	(0.5		)	13.8			(35.3		)

Unallocated LAE⁽²⁾		(2.6	)		(2.0	)		(2.2	)		(0.2	)		(4.2	)		(11.2	)	(5.5		)	(2.0		)	(3.0		)	(0.2		)	(3.5		)	(14.2		)
Other underwriting expenses		(17.0	)		(5.9	)		(6.7	)		(1.1	)		(4.8	)		(35.5	)	(14.7		)	(6.8		)	(8.8		)	(1.4		)	(3.7		)	(35.4		)

Underwriting income		(13.8	)		3.1			(7.5	)		(5.2	)		3.6			(19.8	)	(73.9		)	10.2			(25.7		)	(2.1		)	6.6			(84.9		)

Service fee revenue⁽³⁾		-			30.3			-			-			(13.7	)		16.6		—			31.0			—			—			(14.6		)	16.4
Managing general underwriter unallocated LAE		-			(5.3	)		-			-			5.3			-		—			(4.3		)	—			—			4.3			—
Managing general underwriter other underwriting expenses		-			(4.8	)		-			-			4.8			-		—			(3.7		)	—			—			3.7			—
General and administrative expenses, MGU + Runoff & Other⁽⁴⁾		-			(15.0	)		-			(1.0	)		-			(16.0	)	—			(15.1		)	—			(1.2		)	—			(16.3		)

Underwriting income (loss), including net service fee income	$	(13.8	)	$	8.3		$	(7.5	)	$	(6.2	)	$	-		$	(19.2	)	(73.9		)	18.1			(25.7		)	(3.3		)	—			(84.8		)

Net investment income																	24.4																	22.8
Net realized investment (losses) gains																	15.6																	15.3
Net unrealized investment (losses) gains																	15.5																	53.9
Net foreign exchange gains (losses)																	(0.6	)																4.9
Other revenue⁽⁵⁾																	(1.2	)																(0.1		)
General and administrative expenses⁽⁶⁾																	(12.2	)																(11.7		)
Intangible asset amortization expenses																	(4.0	)																(3.9		)
Interest expense on debt																	(8.0	)																(7.7		)

Pre-tax income																$	10.3																	$	(11.3	)



Underwriting Ratios
Loss ratio		81.5	%		62.1	%		72.7	%		NM			NM			75.0	%	118.8		%	57.0		%	89.7		%	NM			NM			93.2		%
Acquisition expense ratio		16.6	%		30.3	%		28.2	%		NM			NM			20.8	%	18.3		%	28.2		%	27.5		%	NM			NM			20.1		%
Other underwriting expense ratio		10.3	%		5.0	%		7.7	%		NM			NM			9.6	%	9.2		%	5.9		%	8.9		%	NM			NM			9.5		%

Combined ratio⁽⁷⁾		108.4	%		97.4	%		108.6	%		NM			NM			105.4	%	146.3		%	91.1		%	126.1		%	NM			NM			122.8		%



Goodwill and intangible assets⁽⁸⁾	$	-		$	580.2		$	-		$	8.1		$	-		$	588.3		$	—		$	576.1		$	—		$	8.1		$	—		$	584.2

The following tables summarize the segment results for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:



		For the six months ended June 30, 2019

(Millions)		Global Property			Global A&H			Specialty & Casualty			Runoff & Other			Corporate Elimination			Total

																			For the nine months ended September 30, 2019
(Expressed in millions of U.S. dollars)																			Global Property			Global A&H			Specialty & Casualty			Runoff & Other			Corporate Elimination			Total
Gross written premiums	$	566.9		$	322.1		$	217.8		$	2.6		$	-		$	1,109.4		$	720.5		$	459.5		$	338.4		$	4.7		$	—		$	1,523.1



Net written premiums	$	432.9		$	255.5		$	197.4		$	0.7		$	-		$	886.5		$	536.6		$	360.1		$	310.6		$	1.5		$	—		$	1,208.8



Net earned insurance and reinsurance premiums	$	304.0		$	214.9		$	163.0		$	0.7		$	-		$	682.6		$	463.9		$	330.0		$	261.7		$	1.2		$	—		$	1,056.8
Loss and allocated LAE⁽¹⁾		(193.9	)		(135.0	)		(108.9	)		(3.5	)		-			(441.3	)	(378.3		)	(198.6		)	(194.4		)	(4.4		)	—			(775.7		)
Insurance and reinsurance acquisition expenses		(53.0	)		(62.6	)		(45.1	)		(2.5	)		22.9			(140.3	)	(82.2		)	(95.1		)	(72.2		)	(2.6		)	36.7			(215.4		)

Technical profit		57.1			17.3			9.0			(5.3	)		22.9			101.0		3.4			36.3			(4.9		)	(5.8		)	36.7			65.7

Unallocated LAE⁽²⁾		(4.7	)		(3.5	)		(4.1	)		(0.7	)		(7.6	)		(20.6	)	(10.2		)	(5.5		)	(7.1		)	(0.9		)	(11.1		)	(34.8		)
Other underwriting expenses		(33.2	)		(12.0	)		(14.9	)		(3.2	)		(7.5	)		(70.8	)	(47.9		)	(18.8		)	(23.7		)	(4.6		)	(11.2		)	(106.2		)

Underwriting income (loss)		19.2			1.8			(10.0	)		(9.2	)		7.8			9.6		(54.7		)	12.0			(35.7		)	(11.3		)	14.4			(75.3		)

Service fee revenue⁽³⁾		-			66.6			-			-			(24.7	)		41.9		—			97.6			—			—			(39.3		)	58.3
Managing general underwriter unallocated LAE		-			(9.4	)		-			-			9.4			-		—			(13.7		)	—			—			13.7			—
Managing general underwriter other underwriting expenses		-			(7.5	)		-			-			7.5			-		—			(11.2		)	—			—			11.2			—
General and administrative expenses, MGU + Runoff & Other⁽⁴⁾		-			(31.2	)		-			(1.8	)		-			(33.0	)	—			(46.3		)	—			(3.0		)	—			(49.3		)

Underwriting income (loss), including net service fee income	$	19.2		$	20.3		$	(10.0	)	$	(11.0	)	$	-		$	18.5		(54.7		)	38.4			(35.7		)	(14.3		)	—			(66.3		)

Net investment income																	44.5																	67.3
Net realized investment (losses) gains																	24.6																	39.9
Net unrealized investment (losses) gains																	89.5																	143.4
Net foreign exchange gains (losses)																	4.5																	9.4
Other revenue⁽⁵⁾																	(6.9	)																(7.0		)
General and administrative expenses⁽⁶⁾																	(19.6	)																(31.3		)
Intangible asset amortization expenses																	(7.9	)																(11.8		)
Interest expense on debt																	(15.6	)																(23.3		)

Pre-tax income																$	131.6																	$	120.3



Underwriting Ratios
Loss ratio		65.3	%		64.4	%		69.3	%		NM			NM			67.7	%	83.7		%	61.8		%	77.0		%	NM			NM			76.7		%
Acquisition expense ratio		17.4	%		29.1	%		27.7	%		NM			NM			20.6	%	17.7		%	28.8		%	27.6		%	NM			NM			20.4		%
Other underwriting expense ratio		10.9	%		5.6	%		9.1	%		NM			NM			10.4	%	10.3		%	5.7		%	9.1		%	NM			NM			10.0		%

Combined ratio⁽⁷⁾		93.6	%		99.1	%		106.1	%		NM			NM			98.7	%	111.7		%	96.3		%	113.7		%	NM			NM			107.1		%



Goodwill and intangible assets⁽⁸⁾	$	-		$	580.2		$	-		$	8.1		$	-		$	588.3		$	—		$	576.1		$	—		$	8.1		$	—		$	584.2

The following tables provide summary information regarding net premiums written by client location and underwriting location by reportable segment for the three months ended ~~June~~September 30, 2019 and 2018:

For the three months ended June 30, 2019

(Millions) Global
Property Global
A&H Specialty &
Casualty Runoff &
Other
Total

Net written premiums by client location:
United States $ 103.2 $ 102.5 $ 63.5 $ 0.3 $ 269.5
Europe 15.1 5.0 13.4 - 33.5
Canada, the Caribbean, Bermuda and Latin America 14.6 2.0 2.2 - 18.8
Asia and Other 58.7 11.1 10.1 - 79.9

Total net written premium by client location for the three months ended June 30, 2019 $ 191.6 $ 120.6 $ 89.2 $ 0.3 $ 401.7

Net written premiums by underwriting location:
United States $ 4.4 $ 58.7 $ 12.7 $ 0.3 $ 76.1
Europe 70.1 58.4 34.5 - 163.0
Canada, the Caribbean, Bermuda and Latin America 99.0 3.3 41.7 - 144.0
Asia and Other 18.1 0.2 0.3 - 18.6

Total written premiums by underwriting location for the three months ended June 30, 2019 $ 191.6 $ 120.6 $ 89.2 $ 0.3 $ 401.7



	For the three months ended September 30, 2019
(Expressed in millions of U.S. dollars)	Global Property		Global A&H			Specialty & Casualty		Runoff & Other			Total
Net written premiums by client location:
United States	$	44.0	$	87.6		$	83.1	$	0.7		$	215.4
Europe	14.6		5.8			15.1		(0.1		)	35.4
Canada, the Caribbean, Bermuda and Latin America	19.7		3.7			4.8		0.1			28.3
Asia and Other	25.4		7.5			10.2		0.1			43.2
Total net written premium by client location for the three months ended September 30, 2019	$	103.7	$	104.6		$	113.2	$	0.8		$	322.3
Net written premiums by underwriting location:
United States	$	7.5	$	36.9		$	12.7	$	0.7		$	57.8
Europe	45.0		68.1			51.2		—			164.3
Canada, the Caribbean, Bermuda and Latin America	42.3		(0.6		)	49.0		—			90.7
Asia and Other	8.9		0.2			0.3		0.1			9.5
Total written premiums by underwriting location for the three months ended September 30, 2019	$	103.7	$	104.6		$	113.2	$	0.8		$	322.3

For the three months ended June 30, 2018

(Millions) Global
Property Global
A&H Specialty &
Casualty Runoff &
Other
Total

Net written premiums by client location:
United States $ 91.6 $ 70.6 $ 37.0 $ 5.4 $ 204.6
Europe 19.3 6.1 9.9 - 35.3
Canada, the Caribbean, Bermuda and Latin America 21.8 1.2 2.0 - 25.0
Asia and Other 44.3 4.9 6.2 - 55.4

Total net written premium by client location for the three months ended June 30, 2018 $ 177.0 $ 82.8 $ 55.1 $ 5.4 $ 320.3

Net written premiums by underwriting location:
United States $ 10.9 $ 32.3 $ 3.6 $ 5.4 $ 52.2
Europe 73.7 43.2 24.7 - 141.6
Canada, the Caribbean, Bermuda and Latin America 80.4 7.1 26.3 - 113.8
Asia and Other 12.0 0.2 0.5 - 12.7

Total written premiums by underwriting location for the three months ended June 30, 2018 $ 177.0 $ 82.8 $ 55.1 $ 5.4 $ 320.3



	For the three months ended September 30, 2018
(Expressed in millions of U.S. dollars)	Global Property		Global A&H		Specialty & Casualty		Runoff & Other			Total
Net written premiums by client location:
United States	$	62.4	$	71.4	$	45.3	$	(0.1	)	$	179.0
Europe	22.8		7.4		15.8		0.1			46.1
Canada, the Caribbean, Bermuda and Latin America	24.7		2.6		2.8		—			30.1
Asia and Other	35.0		6.5		8.7		0.3			50.5
Total net written premium by client location for the three months ended September 30, 2018	$	144.9	$	87.9	$	72.6	$	0.3		$	305.7
Net written premiums by underwriting location:
United States	$	12.6	$	27.7	$	5.8	$	—		$	46.1
Europe	61.3		52.7		36.1		—			150.1
Canada, the Caribbean, Bermuda and Latin America	53.8		7.3		30.5		—			91.6
Asia and Other	17.2		0.2		0.2		0.3			17.9
Total written premiums by underwriting location for the three months ended September 30, 2018	$	144.9	$	87.9	$	72.6	$	0.3		$	305.7

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

The following tables provide summary information regarding net premiums written by client location and underwriting location by reportable segment for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:

For the six months ended June 30, 2019

(Millions) Global
Property Global
A&H Specialty &
Casualty Runoff &
Other
Total

Net written premiums by client location:
United States $ 165.2 $ 213.6 $ 131.8 $ 0.3 $ 510.9
Europe 139.7 13.1 38.3 0.2 191.3
Canada, the Caribbean, Bermuda and Latin America 39.1 7.0 6.6 - 52.7
Asia and Other 88.9 21.8 20.7 0.2 131.6

Total net written premium by client location for the six months ended June 30, 2019 $ 432.9 $ 255.5 $ 197.4 $ 0.7 $ 886.5

Net written premiums by underwriting location:
United States $ 12.5 $ 99.1 $ 25.1 $ 0.3 $ 137.0
Europe 224.7 122.0 89.1 0.2 436.0
Canada, the Caribbean, Bermuda and Latin America 161.3 34.0 81.8 - 277.1
Asia and Other 34.4 0.4 1.4 0.2 36.4

Total written premiums by underwriting location for the six months ended June 30, 2019 $ 432.9 $ 255.5 $ 197.4 $ 0.7 $ 886.5



	For the nine months ended September 30, 2019
(Expressed in millions of U.S. dollars)	Global Property		Global A&H		Specialty & Casualty		Runoff & Other		Total
Net written premiums by client location:
United States	$	209.2	$	301.2	$	214.9	$	1.0	$	726.3
Europe	154.3		18.9		53.4		0.1		226.7
Canada, the Caribbean, Bermuda and Latin America	58.8		10.7		11.4		0.1		81.0
Asia and Other	114.3		29.3		30.9		0.3		174.8
Total net written premium by client location for the nine months ended September 30, 2019	$	536.6	$	360.1	$	310.6	$	1.5	$	1,208.8
Net written premiums by underwriting location:
United States	$	20.0	$	136.0	$	37.8	$	1.0	$	194.8
Europe	269.7		190.1		140.3		0.2		600.3
Canada, the Caribbean, Bermuda and Latin America	203.6		33.4		130.8		—		367.8
Asia and Other	43.3		0.6		1.7		0.3		45.9
Total written premiums by underwriting location for the nine months ended September 30, 2019	$	536.6	$	360.1	$	310.6	$	1.5	$	1,208.8

For the six months ended June 30, 2018

(Millions) Global
Property Global
A&H Specialty &
Casualty Runoff &
Other
Total

Net written premiums by client location:
United States $ 178.6 $ 158.1 $ 74.3 $ 11.5 $ 422.5
Europe 125.6 17.7 60.2 - 203.5
Canada, the Caribbean, Bermuda and Latin America 45.0 6.0 4.6 - 55.6
Asia and Other 75.0 16.5 16.6 - 108.1

Total net written premium by client location for the six months ended June 30, 2018 $ 424.2 $ 198.3 $ 155.7 $ 11.5 $ 789.7

Net written premiums by underwriting location:
United States $ 16.2 $ 53.3 $ 3.5 $ 11.5 $ 84.5
Europe 210.2 111.8 96.7 - 418.7
Canada, the Caribbean, Bermuda and Latin America 170.2 32.8 53.8 - 256.8
Asia and Other 27.6 0.4 1.7 - 29.7

Total written premiums by underwriting location for the six months ended June 30, 2018 $ 424.2 $ 198.3 $ 155.7 $ 11.5 $ 789.7



	For the nine months ended September 30, 2018
(Expressed in millions of U.S. dollars)	Global Property		Global A&H		Specialty & Casualty		Runoff & Other		Total
Net written premiums by client location:
United States	$	241.0	$	229.5	$	119.6	$	11.4	$	601.5
Europe	148.4		25.1		76.0		0.1		249.6
Canada, the Caribbean, Bermuda and Latin America	69.7		8.6		7.4		—		85.7
Asia and Other	110.0		23.0		25.3		0.3		158.6
Total net written premium by client location for the nine months ended September 30, 2018	$	569.1	$	286.2	$	228.3	$	11.8	$	1,095.4
Net written premiums by underwriting location:
United States	$	28.8	$	81.0	$	9.3	$	11.5	$	130.6
Europe	271.5		164.5		132.8		—		568.8
Canada, the Caribbean, Bermuda and Latin America	224.0		40.1		84.3		—		348.4
Asia and Other	44.8		0.6		1.9		0.3		47.6
Total written premiums by underwriting location for the nine months ended September 30, 2018	$	569.1	$	286.2	$	228.3	$	11.8	$	1,095.4

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

Note 5. Reserves for unpaid losses and loss adjustment expenses

The following table summarizes the loss and LAE reserve activities of Sirius Group for the three months and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:




		Three months ended June 30,						Six months ended June 30,					Three months ended September 30,						Nine months ended September 30,
(Millions)		2019			2018			2019			2018		2019			2018			2019			2018

Gross beginning balance	$	1,976.3		$	1,875.9		$	2,016.7		$	1,898.5		$	2,023.3		$	1,827.1		$	2,016.7		$	1,898.5
Less beginning reinsurance recoverable on unpaid losses		(349.3	)		(327.8	)		(350.2	)		(319.7	)	(357.4		)	(358.3		)	(350.2		)	(319.7		)

Net loss and LAE reserve balance		1,627.0			1,548.1			1,666.5			1,578.8		1,665.9			1,468.8			1,666.5			1,578.8
Losses and LAE incurred relating to:
Current year losses		214.1			161.8			381.4			305.3		342.2			270.5			723.6			575.8
Prior years losses		63.9			(10.4	)		80.5			(12.9	)	6.4			(10.1		)	86.9			(23.0		)
											��
Total net incurred losses and LAE		278.0			151.4			461.9			292.4		348.6			260.4			810.5			552.8

Foreign currency translation adjustment to net loss and LAE reserves		3.4			(22.2	)		-			(15.5	)	(15.3		)	(5.4		)	(15.3		)	(20.9		)
Acquisitions (See Note 3)													—			0.2			—			0.2
Accretion of fair value adjustment to net loss and LAE reserves		0.1			-			0.1			-		—			0.1			0.1			0.1
Loss and LAE paid relating to:
Current year losses		120.9			40.7			157.1			72.0		97.7			80.5			254.8			152.5
Prior years losses		121.7			167.8			305.5			314.9		108.0			101.6			413.5			416.5

Total loss and LAE payments		242.6			208.5			462.6			386.9		205.7			182.1			668.3			569.0

Net ending balance		1,665.9			1,468.8			1,665.9			1,468.8		1,793.5			1,542.0			1,793.5			1,542.0
Plus ending reinsurance recoverable on unpaid losses		357.4			358.3			357.4			358.3		392.9			349.0			392.9			349.0

Gross ending balance	$	2,023.3		$	1,827.1		$	2,023.3		$	1,827.1		$	2,186.4		$	1,891.0		$	2,186.4		$	1,891.0

Loss and LAE development - Three Months Ended ~~June~~September 30, 2019

For the three months ended ~~June~~September 30, 2019, Sirius Group had net unfavorable loss reserve development of ~~$63.9~~$6.4 million. Increases in loss reserve estimates were primarily recorded in ~~Global Property ($55.6 million),~~ Specialty & Casualty ($~~6.0~~10.2 million)~~, and Runoff & Other ($3.0 million). The unfavorable~~ due to higher than expected claims activity in the Casualty Reinsurance book. These increases were partially offset by favorable loss reserve development in Global ~~Property was primarily attributable to higher prior year catastrophe events, including $46.4 million from Typhoon Jebi.~~

A&H ($5.8 million).

Loss and LAE development - Three Months Ended ~~June~~September 30, 2018

For the three months ended ~~June~~September 30, 2018, Sirius Group had net favorable loss reserve development of $10.4 million. The major reductions in loss reserve estimates were recorded in Global A&H ($4.6 million), Specialty & Casualty ($3.1 million), and Runoff & Other ($3.1 million). These reductions were partially offset by increases in Global Property loss reserve development of $0.6 million resulting from higher than expected reporting from recent accident years.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

~~Loss and LAE development - Six Months Ended June 30, 2019~~

For the six months ended June 30, 2019, Sirius Group had net unfavorable loss reserve development of $80.5 million. Increases in loss reserve estimates were recorded in Global Property ($67.2 million), Specialty & Casualty ($4.6 million), Global A&H ($4.5 million), and Runoff & Other ($4.2 million). The unfavorable loss reserve development in Global Property was primarily attributable to higher prior year catastrophe events, including $46.4 million from Typhoon Jebi, $7.3 million from Hurricane Florence, $7.2 million from Hurricane Irma, and $6.3 million from Hurricane Michael.

~~Loss and LAE development - Six Months Ended June 30, 2018~~

~~For the six months ended June 30, 2018, Sirius Group had net favorable loss reserve development of $12.9~~$10.1 million. The major reductions in loss reserve estimates were recorded in Runoff & Other ($~~12.0~~10.6 million), Specialty & Casualty ($~~10.4~~7.3 million), and Global A&H ($~~8.4~~3.0 million). The reduction in Runoff & Other was primarily due to decrease in runoff casualty reserves from older accident years, whereas Specialty & Casualty was due to favorable loss reserve development across all business lines in more recent accident years. These reductions were partially offset by increases in Global Property loss reserve development of $10.8 million resulting from higher than expected reporting from recent accident years.

Loss and LAE development - Nine Months Ended September 30, 2019

For the nine months ended September 30, 2019, Sirius Group had net unfavorable loss reserve development of $86.9 million. Increases in loss reserve estimates were recorded in Global Property ($67.9 million), Specialty & Casualty ($14.8 million), and Runoff & Other ($5.4 million). The unfavorable loss reserve development in Global Property was primarily attributable to prior year catastrophe events, including Typhoon Jebi and Hurricanes Michael, Florence, and Irma. These reductions were partially offset by a decrease in Global A&H ($1.3 million).

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

Loss and LAE development - Nine Months Ended September 30, 2018

For the nine months ended September 30, 2018, Sirius Group had net favorable loss reserve development of $23.0 million. The major reductions in loss reserve estimates were recorded in Runoff & Other ($22.6 million), Specialty & Casualty ($17.7 million), and Global A&H ($11.4 million). Favorable loss reserve development for Runoff & Other included reduction in World Trade Center claims in response to revised information received by the ~~Company.~~Company in addition to favorable loss reserve development in runoff casualty reserves. In addition, Specialty & Casualty had favorable loss reserve development across all business lines, in particular Aviation & Space with $12.0 million. These reductions were partially offset by increases in Global Property loss reserve development of ~~$17.9~~$28.7 million resulting from higher than expected reporting from recent accident years, including ~~$4.6~~$7.4 million of increases from natural catastrophes, including the 2017 North American natural catastrophes. Also, in Other Property, there was loss deterioration from recent accident years reported in client account statements received, ~~in the first quarter,~~ which accounted for the remainder of Global Property unfavorable loss development in the ~~six~~nine months ended ~~June~~September 30, 2018.

Note 6. Third party reinsurance

In the normal course of business, Sirius Group seeks to protect its businesses from losses due to concentration of risk and losses arising from catastrophic events by reinsuring with third-party reinsurers. Sirius Group remains liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts.

At ~~June~~September 30, 2019, Sirius Group had reinsurance recoverables on paid losses of ~~$69.8~~$55.2 million and reinsurance recoverables of ~~$357.4~~$392.9 million on unpaid losses. At December 31, 2018, Sirius Group had reinsurance recoverables on paid losses of $55.0 million and reinsurance recoverables of $350.2 million on unpaid losses. Because retrocessional reinsurance contracts do not relieve Sirius Group of its obligation to its insureds, the collectability of balances due from Sirius Group's reinsurers is important to its financial strength. Sirius Group monitors the financial strength and ratings of retrocessionaires on an ongoing basis. Uncollectible amounts historically have not been significant.

Note 7. Investment securities

Sirius Group's invested assets consist of investment securities and other long-term investments held for general investment purposes. The portfolio of investment securities includes fixed maturity investments, short-term investments, equity securities, and other-long term investments which are all classified as trading securities. Realized and unrealized investment gains and losses on trading securities are reported in pre-tax revenues.

Net investment income

Sirius Group's net investment income is comprised primarily of interest income along with associated amortization of premium and accretion of discount on Sirius Group's fixed maturity investments, dividend income from its equity investments, and interest income from its short-term investments.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Net investment income for the three months and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 consisted of the following:




		For the three months ended June 30,						For the six months ended June 30,					For the three months ended September 30,						For the nine months ended September 30,
(Millions)		2019			2018			2019			2018		2019			2018			2019			2018

Fixed maturity investments	$	13.1		$	13.7		$	27.2		$	23.6		$	12.8		$	14.2		$	40.0		$	37.8
Short-term investments		4.8			0.5			7.9			1.3		4.1			2.4			12.0			3.7
Equity securities		7.1			7.1			9.8			8.3		2.7			5.9			12.5			14.2
Other long-term investments		3.2			1.3			7.1			2.5		5.2			2.7			12.3			5.2

Total investment income		28.2			22.6			52.0			35.7		24.8			25.2			76.8			60.9
Investment expenses		(3.8	)		(3.4	)		(7.5	)		(5.7	)	(2.0		)	(3.4		)	(9.5		)	(9.1		)

Net investment income	$	24.4		$	19.2		$	44.5		$	30.0		$	22.8		$	21.8		$	67.3		$	51.8

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

Net realized and unrealized investment gains (losses)

Net realized and unrealized investment gains (losses) for the three months and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 consisted of the following:

For the three months
ended June 30, For the six months
ended June 30,
(Millions) 2019 2018 2019 2018

Gross realized gains $ 26.9 $ 12.0 $ 41.0 $ 20.4
Gross realized (losses) (11.3 ) (4.2 ) (16.4 ) (16.3 )

Net realized gains (losses) on investments⁽¹⁾⁽²⁾ 15.6 7.8 24.6 4.1
Net unrealized gains (losses) on investments⁽³⁾⁽⁴⁾ 15.5 24.7 89.5 40.7

Net realized and unrealized gains (losses) on investments $ 31.1 $ 32.5 $ 114.1 $ 44.8



	For the three months ended September 30,						For the nine months ended September 30,
(Millions)	2019			2018			2019			2018
Gross realized gains	$	22.1		$	11.3		$	63.1		$	31.7
Gross realized (losses)	(6.8		)	(7.4		)	(23.2		)	(23.7		)
Net realized gains on investments⁽¹⁾⁽²⁾	15.3			3.9			39.9			8.0
Net unrealized gains (losses) on investments⁽³⁾⁽⁴⁾	53.9			(11.7		)	143.4			29.0
Net realized and unrealized gains (losses) on investments	$	69.2		$	(7.8	)	$	183.3		$	37.0

⁽¹⁾Includes ~~$9.7~~$14.0 and ~~$7.1~~$4.7 of realized gains due to foreign currency for the three months ended ~~June~~September 30, 2019 and 2018, respectively.

(2)Includes ~~$20.5~~$34.5 and ~~$6.0~~$10.7 of realized gains due to foreign currency for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, respectively.

(3)Includes ~~$(7.2)~~$33.9 and ~~$29.7~~$(5.5) of unrealized (losses) gains due to foreign currency for the three months ended ~~June~~September 30, 2019 and 2018, respectively.

⁽⁴⁾ Includes $~~Includes $17.8~~51.7 and ~~$48.6~~$43.1 of unrealized gains due to foreign currency for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, respectively.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Net realized investment gains ~~(losses)~~

Net realized investment gains ~~(losses)~~ for the three months and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 consisted of the following:

For the three months
ended June 30, For the six months
ended June 30,
(Millions) 2019 2018 2019 2018

Fixed maturity investments $ 8.1 $ 3.6 $ 14.9 $ 0.8
Equity securities (1.2 ) 1.7 (1.8 ) 0.2
Short-term investments 3.1 - 3.2 -
Derivative instruments (0.2 ) - (0.8 ) -
Other long-term investments 5.8 2.5 9.1 3.1

Net realized investment gains (losses) $ 15.6 $ 7.8 $ 24.6 $ 4.1



	For the three months ended September 30,						For the nine months ended September 30,
(Millions)	2019			2018			2019			2018
Fixed maturity investments	$	7.5		$	4.2		$	22.4		$	5.0
Equity securities	1.7			(0.6		)	(0.1		)	(0.4		)
Short-term investments	6.5			—			9.7			—
Derivative instruments	(0.7		)	—			(1.5		)	—
Other long-term investments	0.3			0.3			9.4			3.4
Net realized investment gains	$	15.3		$	3.9		$	39.9		$	8.0

Net unrealized investment gains (losses)

Net unrealized investment gains (losses) for the three months and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 consisted of the following:

For the three months
ended June 30, For the six months
ended June 30,
(Millions) 2019 2018 2019 2018

Fixed maturity investments $ 11.0 $ 17.8 $ 40.7 $ 20.8
Equity securities 13.3 (5.2 ) 38.4 1.2
Short-term investments (0.9 ) - 1.8 -
Derivative instruments (0.1 ) - (0.7 ) -
Other long-term investments (7.8 ) 12.1 9.3 18.7

Net unrealized investment (losses) gains $ 15.5 $ 24.7 $ 89.5 $ 40.7



	For the three months ended September 30,					For the nine months ended September 30,
(Millions)	2019		2018			2019		2018
Fixed maturity investments	$	31.4	$	(8.6	)	$	72.1	$	12.2
Equity securities	12.0		0.9			50.4		2.1
Short-term investments	4.6		—			6.4		—
Derivative instruments	0.9		—			0.2		—
Other long-term investments	5.0		(4.0		)	14.3		14.7
Net unrealized investment gains (losses)	$	53.9	$	(11.7	)	$	143.4	$	29.0

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

The following table summarizes the amount of total gains (losses) included in earnings attributable to unrealized investment gains (losses) for Level 3 investments for the three months and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:

For the three months
ended June 30, For the six months
ended June 30,
(Millions) 2019 2018 2019 2018

Fixed maturity investments $ - $ (2.1 ) $ - $ (2.1 )
Other long-term investments - 7.3 8.8 7.7

Total unrealized investment gains (losses) – Level 3 investments $ - $ 5.2 $ 8.8 $ 5.6



	For the three months ended September 30,						For the nine months ended September 30,
(Millions)	2019			2018			2019		2018
Fixed maturity investments	$	—		$	0.1		$	—	$	(2.0	)
Other long-term investments	(0.3		)	(1.6		)	10.1		6.1
Total unrealized investment (losses) gains – Level 3 investments	$	(0.3	)	$	(1.5	)	$	10.1	$	4.1

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Investment holdings

Fixed maturity investments

The cost or amortized cost, gross unrealized investment gains (losses), net foreign currency gains (losses), and fair value of Sirius Group's fixed maturity investments as of ~~June~~September 30, 2019 and December 31, 2018, were as follows:

June 30, 2019

(Millions) Cost or
amortized
cost Gross
unrealized
gains Gross
unrealized
(losses) Net foreign
currency
gains
(losses) Fair value

Corporate debt securities $ 588.8 $ 5.0 $ (1.1 ) $ 13.9 $ 606.6
Residential mortgage-backed securities 381.5 9.9 (1.7 ) 8.3 398.0
Asset-backed securities 510.9 1.0 (1.8 ) 3.5 513.6
Commercial mortgage-backed securities 106.3 0.8 (0.5 ) 1.2 107.8
Non-U.S. government and government agency 27.9 - - 0.6 28.5
U.S. government and government agency 155.1 1.1 (0.1 ) 1.3 157.4
Preferred stocks 1.1 0.1 - - 1.2
U.S. States, municipalities and political subdivision 2.6 - - - 2.6

Total fixed maturity investments $ 1,774.2 $ 17.9 $ (5.2 ) $ 28.8 $ 1,815.7



	September 30, 2019
(Millions)	Cost or amortized cost		Gross unrealized gains		Gross unrealized (losses)			Net foreign currency gains (losses)			Fair value
Corporate debt securities	$	517.7	$	6.3	$	(0.3	)	$	24.0		$	547.7
Asset-backed securities	501.4		1.1		(1.9		)	6.6			507.2
Residential mortgage-backed securities	365.9		11.9		(0.8		)	14.5			391.5
U.S. government and government agency	157.6		1.7		—			3.0			162.3
Commercial mortgage-backed securities	102.0		1.2		(0.4		)	1.8			104.6
Non-U.S. government and government agency	37.8		0.3		(0.1		)	0.4			38.4
Preferred stocks	18.0		0.1		(0.1		)	(0.1		)	17.9
U.S. States, municipalities and political subdivision	1.7		—		—			0.1			1.8
Total fixed maturity investments	$	1,702.1	$	22.6	$	(3.6	)	$	50.3		$	1,771.4



		December 31, 2018

													December 31, 2018
(Millions)		Cost or amortized cost		Gross unrealized gains		Gross unrealized (losses)			Net foreign currency gains (losses)			Fair value	Cost or amortized cost		Gross unrealized gains		Gross unrealized (losses)			Net foreign currency gains (losses)			Fair value

Corporate debt securities	$	694.1	$	1.4	$	(7.3	)	$	7.6		$	695.8	$	694.1	$	1.4	$	(7.3	)	$	7.6		$	695.8
Asset-backed securities		496.3		0.1		(3.8	)		1.9			494.5	496.3		0.1		(3.8		)	1.9			494.5
Residential mortgage-backed securities		413.0		1.7		(7.1	)		5.9			413.5	413.0		1.7		(7.1		)	5.9			413.5
U.S. government and government agency		163.9		0.3		(0.5	)		4.2			167.9	163.9		0.3		(0.5		)	4.2			167.9
Commercial mortgage-backed securities		117.7		0.2		(2.7	)		0.7			115.9	117.7		0.2		(2.7		)	0.7			115.9
Non-U.S. government and government agency		50.6		-		(0.2	)		(0.1	)		50.3	50.6		—		(0.2		)	(0.1		)	50.3
Preferred stocks		14.5		0.6		(6.8	)		0.2			8.5	14.5		0.6		(6.8		)	0.2			8.5
U.S. States, municipalities and political subdivision		2.8		-		-			-			2.8	2.8		—		—			—			2.8

Total fixed maturity investments	$	1,952.9	$	4.3	$	(28.4	)	$	20.4		$	1,949.2	$	1,952.9	$	4.3	$	(28.4	)	$	20.4		$	1,949.2

The weighted average duration of Sirius Group's fixed income portfolio as of ~~June~~September 30, 2019 was approximately ~~1.5~~1.6 years, including short-term investments, and approximately ~~2.2~~2.5 years excluding short-term investments.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

The cost or amortized cost and fair value of Sirius Group's fixed maturity investments as of ~~June~~September 30, 2019 and December 31, 2018 are presented below by contractual maturity. Actual maturities could differ from contractual maturities because borrowers may have the right to call or prepay certain obligations with or without call or prepayment penalties.



		June 30, 2019				December 31, 2018

									September 30, 2019				December 31, 2018
(Millions)		Cost or amortized cost		Fair value		Cost or amortized cost		Fair value	Cost or amortized cost		Fair value		Cost or amortized cost		Fair value

Due in one year or less	$	197.9	$	202.9	$	249.6	$	254.6	$	155.5	$	162.6	$	249.6	$	254.6
Due after one year through five years		523.5		538.7		635.6		636.4	487.3		513.6		635.6		636.4
Due after five years through ten years		52.9		53.4		26.2		25.7	40.8		41.7		26.2		25.7
Due after ten years		0.1		0.1		0.1		0.1	31.2		32.3		0.1		0.1
Mortgage-backed and asset-backed securities		998.7		1,019.4		1,026.9		1,023.9	969.3		1,003.3		1,026.9		1,023.9
Preferred stocks		1.1		1.2		14.5		8.5	18.0		17.9		14.5		8.5

Total	$	1,774.2	$	1,815.7	$	1,952.9	$	1,949.2	$	1,702.1	$	1,771.4	$	1,952.9	$	1,949.2

The following table summarizes the ratings and fair value of fixed maturity investments held in Sirius Group's investment portfolio as of ~~June~~September 30, 2019 and December 31, 2018:




(Millions)		June 30, 2019		December 31, 2018	September 30, 2019		December 31, 2018

AAA	$	597.8	$	602.0	$	573.5	$	602.0
AA		746.8		818.0	740.8		818.0
A		278.2		290.5	257.9		290.5
BBB		133.5		167.4	120.4		167.4
Other		59.4		71.3	78.8		71.3

Total fixed maturity investments⁽¹⁾	$	1,815.7	$	1,949.2	$	1,771.4	$	1,949.2

⁽¹⁾Credit ratings are assigned based on the following hierarchy: 1) Standard & Poor's ("S&P") and 2) Moody's Investors Service ("Moody's").

At ~~June~~September 30, 2019, the above totals included ~~$51.6~~$50.0 million of sub-prime securities. Of this total, ~~$22.4~~$26.1 million was rated AAA, ~~$17.4~~$19.8 million rated AA, ~~$7.1~~$3.9 million rated A and ~~$4.7~~$0.2 million classified as Other. At December 31, 2018, the above totals included $42.6 million of sub-prime securities. Of this total, $17.1 million was rated AAA, $9.8 million rated AA, $6.0 million rated A, $4.7 million rated BBB and $5.0 million classified as Other.

Equity securities and Other long-term investments

The cost or amortized cost, gross unrealized investment gains and losses, net foreign currency gains, and ~~losses, and~~ fair values of Sirius Group's equity securities and other long-term investments as of ~~June~~September 30, 2019 and December 31, 2018, were as follows:

June 30, 2019

(Millions) Cost or
amortized
cost Gross
unrealized
gains Gross
unrealized
losses Net foreign
currency
gains Fair value

Equity securities $ 376.2 $ 38.6 $ (36.7 ) $ 9.7 $ 387.8
Other long-term investments $ 349.9 $ 44.2 $ (24.6 ) $ 10.4 $ 379.9



	September 30, 2019
(Millions)	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Net foreign currency gains		Fair value
Equity securities	$	359.4	$	46.8	$	(35.2	)	$	13.3	$	384.3
Other long-term investments	$	332.6	$	52.7	$	(29.7	)	$	12.8	$	368.4



	December 31, 2018
(Millions)	Cost or amortized cost		Gross unrealized gains		Gross unrealized losses			Net foreign currency gains		Fair value
Equity securities	$	409.4	$	17.8	$	(50.8	)	$	3.6	$	380.0
Other long-term investments	$	337.6	$	32.6	$	(13.5	)	$	8.3	$	365.0

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements
~~Unaudited~~

Unaudited

December 31, 2018

(Millions) Cost or
amortized
cost Gross
unrealized
gains Gross
unrealized
losses Net foreign
currency
gains Fair value

Equity securities $ 409.4 $ 17.8 $ (50.8 ) $ 3.6 $ 380.0
Other long-term investments $ 337.6 $ 32.6 $ (13.5 ) $ 8.3 $ 365.0

Equity securities at fair value consisted of the following as of ~~June~~September 30, 2019 and December 31, 2018:

(Millions) June 30, 2019 December 31, 2018

Investment grade fixed income mutual funds $ 151.9 $ 157.7
Common stocks 233.4 222.3
Other 2.5 -

Total Equity securities $ 387.8 $ 380.0



(Millions)	September 30, 2019		December 31, 2018
Investment grade fixed income mutual funds	$	150.9	$	157.7
Common stocks	231.8		222.3
Other	1.6		—
Total Equity securities	$	384.3	$	380.0

Other long-term investments at fair value consisted of the following as of ~~June~~September 30, 2019 and December 31, 2018:

(Millions) June 30, 2019 December 31, 2018

Hedge funds and private equity funds $ 291.9 $ 301.4
Limited liability companies and private equity securities 88.0 63.6

Total other long-term investments $ 379.9 $ 365.0



(Millions)	September 30, 2019		December 31, 2018
Hedge funds and private equity funds	$	287.7	$	301.4
Limited liability companies and private equity securities	80.7		63.6
Total other long-term investments	$	368.4	$	365.0

Hedge Funds and Private Equity Funds

Sirius Group holds investments in hedge funds and private equity funds, which are included in other long-term investments. The fair value of these investments has been estimated using the net asset value of the funds. As of ~~June~~September 30, 2019, Sirius Group held investments in 9 hedge funds and 29 private equity funds. The largest investment in a single fund was ~~$49.6~~$52.3 million as of ~~June~~September 30, 2019 and $54.8 million as of December 31, 2018.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

The following table summarizes investments in hedge funds and private equity interests by investment objective and sector as of ~~June~~September 30, 2019 and December 31, 2018:



		June 30, 2019				December 31, 2018

									September 30, 2019				December 31, 2018
(Millions)		Fair Value		Unfunded Commitments		Fair Value		Unfunded Commitments	Fair Value		Unfunded Commitments		Fair Value		Unfunded Commitments

Hedge funds:
Long/short multi-sector	$	47.7	$	-	$	41.0	$	-	$	50.6	$	—	$	41.0	$	—
Distressed mortgage credit		49.6		-		54.8		-	52.3		—		54.8		—
Private Credit		20.8		-		20.0			21.2		—		20.0		—
Other		2.3		-		2.5		-	1.5		—		2.5		—

Total hedge funds		120.4		-		118.3		-	125.6		—		118.3		—
Private equity funds:
Energy infrastructure & services		74.8		41.9		93.7		54.2	64.2		41.4		93.7		54.2
Multi-sector		6.5		0.7		9.0		0.7	10.4		7.9		9.0		0.7
Healthcare		35.6		11.7		31.7		15.6	31.9		10.8		31.7		15.6
Life settlement		24.8		-		23.7		-	25.7		—		23.7		—
Manufacturing/Industrial		27.5		4.0		23.6		10.4	27.8		3.8		23.6		10.4
Private equity secondaries		0.8		0.8		1.1		1.1	0.6		0.8		1.1		1.1
Real estate		0.3		-		0.3		-	0.3		—		0.3		—
Other		1.2		2.6		-		-	1.2		2.5		—		—

Total private equity funds		171.5		61.7		183.1		82.0	162.1		67.2		183.1		82.0

Total hedge and private equity funds included in other long-term investments	$	291.9	$	61.7	$	301.4	$	82.0	$	287.7	$	67.2	$	301.4	$	82.0

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

Redemption of investments in certain hedge funds is subject to restrictions including lock-up periods where no redemptions or withdrawals are allowed, restrictions on redemption frequency, and advance notice periods for redemptions. Amounts requested for redemptions remain subject to market fluctuations until the redemption effective date, which generally falls at the end of the defined redemption period.

The following summarizes the ~~June~~September 30, 2019 fair value of hedge funds subject to restrictions on redemption frequency and advance notice period requirements for investments in active hedge funds:

Notice Period

Redemption Frequency
(Millions)
30-59 days
notice 60-89 days
notice 90-119 days
notice 120+ days
notice Total

Monthly
$ - $ 32.3 $ - $ - $ 32.3
Quarterly
0.8 - - - 0.8
Semi-annual
- 0.7 - - 0.7
Annual
- 15.4 50.4 20.8 86.6

Total
$ 0.8 $ 48.4 $ 50.4 $ 20.8 $ 120.4



	Notice Period
Redemption Frequency (Millions)	30-59 days notice		60-89 days notice		90-119 days notice		120+ days notice		Total
Monthly	$	—	$	35.7	$	—	$	—	$	35.7
Quarterly	0.8		—		—		—		0.8
Semi-annual	—		0.3		—		—		0.3
Annual	—		14.9		52.7		21.2		88.8
Total	$	0.8	$	50.9	$	52.7	$	21.2	$	125.6

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Certain of the hedge fund and private equity fund investments in which Sirius Group is invested are no longer active and are in the process of disposing of their underlying investments. Distributions from such funds are remitted to investors as the fund's underlying investments are liquidated. As of ~~June~~September 30, 2019, no distributions were outstanding from these investments. Investments in private equity funds are generally subject to a "lock-up" period during which investors may not request a redemption. Distributions prior to the expected termination date of the fund may be limited to dividends or proceeds arising from the liquidation of the fund's underlying investments.

In addition, certain private equity funds provide an option to extend the lock-up period at either the sole discretion of the fund manager or upon agreement between the fund and the investors.

As of ~~June~~September 30, 2019, investments in private equity funds were subject to lock-up periods as follows:

(Millions)
1 - 3 years 3 – 5 years 5 – 10 years Total

Private Equity Funds – expected lock up period remaining
$ 10.6 $ 4.2 $ 156.7 $ 171.5



(Millions)	1 - 3 years		3 – 5 years		5 – 10 years		Total
Private Equity Funds – expected lock up period remaining	$	10.3	$	3.3	$	148.5	$	162.1

Investments held on deposit or as collateral

As of ~~June~~September 30, 2019 and December 31, 2018 investments of ~~$802.8~~$797.8 million and $792.4 million, respectively, were held in trusts required to be maintained in relation to various reinsurance agreements. Sirius Group's reinsurance operations are required to maintain deposits with certain insurance regulatory agencies in order to maintain their insurance licenses. The fair value of such deposits that are included within total investments totaled ~~$814.4~~$817.5 million and $801.2 million as of ~~June~~September 30, 2019 and December 31, 2018, respectively.

As of ~~June~~September 30, 2019, Sirius Group held $0.2 million of collateral in the form of short-term investments associated with Interest Rate Cap agreements. (SeeNote 11.)

Unsettled investment purchases and sales

As of ~~June~~September 30, 2019 and December 31, 2018 Sirius Group reported ~~$2.6~~$34.7 million and $3.2 million, respectively, in Accounts payable on unsettled investment purchases.

As of ~~June~~September 30, 2019 and December 31, 2018, Sirius Group reported ~~$2.0~~$12.9 million and $5.0 million, respectively, in Accounts receivable on unsettled investment sales.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

Note 8. Fair value measurements

Fair value measurements are categorized into a hierarchy that distinguishes between inputs based on market data from independent sources ("observable inputs") and a reporting entity's internal assumptions based upon the best information available when external market data is limited or unavailable ("unobservable inputs"). Quoted prices in active markets for identical assets or liabilities have the highest priority ("Level 1"), followed by observable inputs other than quoted prices, including prices for similar but not identical assets or liabilities ("Level 2"), and unobservable inputs, including the reporting entity's estimates of the assumptions that market participants would use, having the lowest priority ("Level 3").

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

The availability of observable inputs can vary from financial instrument to financial instrument and is affected by a wide variety factors including, for example, the type of financial instrument, whether the financial instrument is new and not yet established in the marketplace, and other characteristics particular to the instrument. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires significantly more judgment.

Accordingly, the degree of judgment exercised by management in determining fair value is greatest for instruments categorized in Level 3. In periods of market dislocation, the observability of prices and inputs may be reduced for many instruments. This may lead the Company to change the selection of the valuation technique (for example, from market to cash flow approach) or to use multiple valuation techniques to estimate the fair value of a financial instrument. These circumstances could cause an instrument to be reclassified between levels within the fair value hierarchy. Investments valued using Level 1 inputs include fixed maturity investments, primarily investments in U.S. Treasuries Bills and Notes, equity securities, and short-term investments. Investments valued using Level 2 inputs are primarily comprised of fixed maturity investments, which have been disaggregated into classes, including U.S. government and government agency, corporate debt securities, mortgage-backed and asset-backed securities, non-U.S. government and government agency, U.S. state and municipalities and political subdivision and preferred stocks. Investments valued using Level 2 inputs also include certain exchange-traded funds that track U.S. stock indices such as the S&P 500 but are traded on foreign exchanges. Fair value estimates for investments that trade infrequently and have few or no observable market prices are classified as Level 3 measurements. Sirius Group determines when transfers between levels have occurred as of the beginning of the period.

Valuation techniques

Sirius Group uses outside pricing services to assist in determining fair values for its investments. For investments in active markets, Sirius Group uses the quoted market prices provided by outside pricing services to determine fair value. The outside pricing services Sirius Group uses have indicated that they will only provide prices where observable inputs are available. In circumstances where quoted market prices are unavailable or are not considered reasonable, Sirius Group estimates the fair value using industry standard pricing models and observable inputs such as benchmark yields, reported trades, broker-dealer quotes, issuer spreads, benchmark securities, bids, offers, prepayment speeds, reference data including research publications, and other relevant inputs. Given that many fixed maturity investments do not trade on a daily basis, the outside pricing services evaluate a wide range of fixed maturity investments by regularly drawing parallels from recent trades and quotes of comparable securities with similar features. The characteristics used to identify comparable fixed maturity investments vary by asset type and take into account market convention.

The valuation process above is generally applicable to all of Sirius Group's fixed maturity investments. The techniques and inputs specific to asset classes within Sirius Group's fixed maturity investments for Level 2 securities that use observable inputs are as follows:

U.S. government and government agency

U.S. government and government agency securities consist primarily of debt securities issued by the U.S. Treasury and mortgage pass-through agencies such as the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation and the Government National Mortgage Association. Fixed maturity investments included in U.S. government and government agency securities are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources and integrate other observations from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The fair value of each security is individually computed using analytical models that incorporate option-adjusted spreads and other daily interest rate data.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

Non-U.S. government and government agency

Non-U.S. government and government agency securities consist of debt securities issued by non-U.S. governments and their agencies along with supranational organizations (also known as sovereign debt securities). Securities held in these sectors are primarily priced by pricing services that employ proprietary discounted cash flow models to value the securities. Key quantitative inputs for these models are daily observed benchmark curves for treasury, swap, and high issuance credits. The pricing services then apply a credit spread for each security, which is developed by in-depth and real-time market analysis. For securities in which trade volume is low, the pricing services utilize data from more frequently traded securities with similar attributes. These models may also be supplemented by daily market and credit research for international markets.

Corporate debt securities

Corporate debt securities consist primarily of investment-grade debt of a wide variety of U.S. and non-U.S. corporate issuers and industries. The corporate fixed maturity investments are primarily priced by pricing services. When evaluating these securities, the pricing services gather information from market sources regarding the issuer of the security and obtain credit data, as well as other observations, from markets and sector news. Evaluations are updated by obtaining broker-dealer quotes and other market information including actual trade volumes, when available. The pricing services also consider the specific terms and conditions of the securities, including any specific features that may influence risk.

Mortgage-backed and asset-backed securities

The fair value of mortgage and asset-backed securities is primarily priced by pricing services using a pricing model that utilizes information from market sources and leveraging similar securities. Key inputs include benchmark yields, reported trades, underlying tranche cash flow data and collateral performance, plus new issue data, as well as broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including issuer, vintage, loan type, collateral attributes, prepayment speeds, default rates, recovery rates, cash flow stress testing, credit quality ratings, and market research publications.

U.S. states, municipalities and political subdivisions

The U.S. states, municipalities and political subdivisions portfolio contains debt securities issued by U.S. domiciled state and municipal entities. These securities are generally priced by independent pricing services using the techniques described for U.S. government and government agency securities described above.

Preferred stocks

The fair value of preferred stocks is generally priced by independent pricing services using an evaluated pricing model that calculates the appropriate spread over a comparable security for each issue. Key inputs include exchange prices (underlying and common stock of the same issuer), benchmark yields, reported trades, broker-dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, and reference data including sector, coupon, credit quality ratings, duration, credit enhancements, early redemption features, and market research publications.

Level 3 investments

Level 3 valuations are generated from techniques that use assumptions not observable in the market. These unobservable assumptions reflect Sirius Group's assumptions about what market participants would use in valuing the investment. Generally, certain securities may start out as Level 3 when they are originally issued but, as observable inputs become available in the market, they may be reclassified to Level 2.

Sirius Group employs a number of procedures to assess the reasonableness of the fair value measurements for its other long-term investments, including obtaining and reviewing the audited annual financial statements of hedge funds and private equity funds and periodically discussing each fund's pricing with the fund manager. However, since the fund managers do not provide sufficient information to evaluate the pricing inputs and methods for each underlying investment, the inputs are considered to be unobservable.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

The fair values of Sirius Group's investments in private equity securities and private debt instruments have been classified as Level 3 measurements. They are carried at fair value and are initially valued based on transaction price. Their valuation is subsequently estimated based on available evidence such as a market transaction in similar instruments and other financial information for the issuer.

Investments measured using net asset value

The fair value of Sirius Group's investments in hedge funds and private equity funds has been determined using net asset value ("NAV"). The hedge fund's administrator provides quarterly updates of fair value in the form of Sirius Group's proportional interest in the underlying fund's NAV, which is deemed to approximate fair value, generally with a three month delay in valuation. The fair value of investment in hedge funds is measured using the NAV practical expedient and therefore has been not categorized within the fair value hierarchy. The private equity funds provide quarterly or semi-annual partnership capital statements with a three or six month delay which are used as a basis for valuation. These private equity investments vary in investment strategies and are not actively traded in any open markets. Due to a lag in reporting, some of the fund managers, fund administrators, or both, are unable to provide final fund valuations as of the Company's reporting date. In these circumstances, Sirius Group estimates the return of the current period and uses all credible information available. This includes utilizing preliminary estimates reported by its fund managers and using other information that is available to Sirius Group with respect to the underlying investments, as necessary.

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

Fair value measurements by level

The following tables summarize Sirius Group's financial assets and liabilities measured at fair value as of ~~June~~September 30, 2019 and December 31, 2018 by level:



		June 30, 2019

									September 30, 2019
(Millions)		Fair Value		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs	Fair Value		Level 1 Inputs		Level 2 Inputs		Level 3 Inputs

Assets measured at fair value

Fixed maturity investments:
U.S. Government and government agency	$	157.4	$	156.0	$	1.4	$	-	$	162.3	$	160.9	$	1.4	$	—
Corporate debt securities		606.6		-		606.6		-	547.7		—		547.7		—
Residential mortgage-backed securities		398.0		-		398.0		-	391.5		—		391.5		—
Asset-backed securities		513.6		-		513.6		-	507.2		—		507.2		—
Commercial mortgage-backed securities		107.8		-		107.8		-	104.6		—		104.6		—
Non-U.S. government and government agency		28.5		28.5		-		-	38.4		21.3		17.1		—
Preferred stocks		1.2		-		1.2		-	17.9		—		0.9		17.0
U.S. States, municipalities, and political subdivision		2.6		-		2.6		-	1.8		—		1.8		—

Total fixed maturity investments		1,815.7		184.5		1,631.2		-	1,771.4		182.2		1,572.2		17.0
Equity securities:
Investment grade fixed income mutual funds		151.9		151.9		-		-	150.9		150.9		—		—
Common stocks		233.4		233.4		-		-	231.8		231.8		—		—
Other		2.5		-		2.5		-	1.6		—		1.6		—

Total equity securities		387.8		385.3		2.5		-	384.3		382.7		1.6		—
Short-term investments		882.9		845.6		37.3		-	989.3		978.8		10.5		—
Other long-term investments⁽¹⁾		88.0		-		-		88.0	80.7		—		—		80.7

Total investments	$	3,174.4	$	1,415.4	$	1,671.0	$	88.0	$	3,225.7	$	1,543.7	$	1,584.3	$	97.7
Derivative instruments		2.9		0.8		-		2.1	6.3		1.6		—		4.7

Total assets measured at fair value	$	3,177.3	$	1,416.2	$	1,671.0	$	90.1	$	3,232.0	$	1,545.3	$	1,584.3	$	102.4



Liabilities measured at fair value

Contingent consideration liabilities	$	30.8	$	-	$	-	$	30.8	$	26.0	$	—	$	—	$	26.0
Derivative instruments		6.0		0.3		-		5.7	6.9		—		—		6.9

Total liabilities measured at fair value	$	36.8	$	0.3	$	-	$	36.5	$	32.9	$	—	$	—	$	32.9

⁽¹⁾Excludes fair value of ~~$291.9~~$287.7 associated with hedge funds and private equity funds which fair value is measured using NAV practical expedient.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~



		December 31, 2018

									December 31, 2018
(Millions)		Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs	Fair value		Level 1 inputs		Level 2 inputs		Level 3 inputs

Assets measured at fair value

Fixed maturity investments:
U.S. Government and government agency	$	167.9	$	164.7	$	3.2	$	-	$	167.9	$	164.7	$	3.2	$	—
Corporate debt securities		695.8		-		695.8		-	695.8		—		695.8		—
Asset-backed securities		494.5		-		494.5		-	494.5		—		494.5		—
Residential mortgage-backed securities		413.5		-		413.5		-	413.5		—		413.5		—
Commercial mortgage-backed securities		115.9		-		115.9		-	115.9		—		115.9		—
Non-U.S. government and government agency		50.3		42.9		7.4		-	50.3		42.9		7.4		—
Preferred stocks		8.5		-		3.1		5.4	8.5		—		3.1		5.4
U.S. States, municipalities, and political subdivision		2.8		-		2.8		-	2.8		—		2.8		—

Total fixed maturity investments		1,949.2		207.6		1,736.2		5.4	1,949.2		207.6		1,736.2		5.4
Short-term investments		715.5		679.3		36.2		-	715.5		679.3		36.2		—
Equity securities:
Investment grade fixed income mutual funds		157.7		157.7		-		-	157.7		157.7		—		—
Common stocks		222.3		222.3		-		-	222.3		222.3		—		—

Total equity securities		380.0		380.0		-		-	380.0		380.0		—		—
Other long-term investments⁽¹⁾		63.6		-		-		63.6	63.6		—		—		63.6

Total investments	$	3,108.3	$	1,266.9	$	1,772.4	$	69.0	$	3,108.3	$	1,266.9	$	1,772.4	$	69.0
Derivative instruments		4.1		-		-		4.1	4.1		—		—		4.1

Total assets measured at fair value	$	3,112.4	$	1,266.9	$	1,772.4	$	73.1	$	3,112.4	$	1,266.9	$	1,772.4	$	73.1



Liabilities measured at fair value

Contingent consideration liabilities	$	28.8	$	-	$	-	$	28.8	$	28.8	$	—	$	—	$	28.8
Derivative instruments		5.1		0.5		-		4.6	5.1		0.5		—		4.6

Total liabilities measured at fair value	$	33.9	$	0.5	$	-	$	33.4	$	33.9	$	0.5	$	—	$	33.4

⁽¹⁾Excludes fair value of $301.4 associated with hedge funds and private equity funds which fair value is measured using NAV practical expedient.

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

Rollforward of Level 3 fair value measurements

The following tables present changes in Level 3 for financial instruments measured at fair value for the three months ended ~~June~~September 30, 2019 and ~~June~~September 30, 2018:

For the three months ended June 30, 2019

(Millions)
Fixed
Maturities Other
long-term
investments⁽¹⁾ Derivative
instruments
assets &
(liabilities) Contingent
consideration
(liabilities)

Balance at March 31, 2019
$ - $ 88.0 $ (4.8 ) $ (28.8 )
Total realized and unrealized gains (losses)
- - (0.6 ) (2.0 )
Foreign currency gains (losses) through Other Comprehensive Income
- - - -
Purchases
- - - -
Sales/Settlements
- - 1.8 -

Balance at June 30, 2019
$ - $ 88.0 $ (3.6 ) $ (30.8 )



	For the three months ended September 30, 2019
(Millions)	Fixed Maturities		Other long-term investments⁽¹⁾			Derivative instruments assets & (liabilities)			Contingent consideration (liabilities)
Balance at June 30, 2019	$	—	$	88.0		$	(3.6	)	$	(30.8	)
Total realized and unrealized gains (losses)	—		(0.3		)	(2.0		)	(2.1		)
Foreign currency gains (losses) through Other Comprehensive Income	—		(1.0		)	—			—
Purchases	17.0		—			—			—
Sales/Settlements	—		(6.0		)	3.4			6.9
Balance at September 30, 2019	$	17.0	$	80.7		$	(2.2	)	$	(26.0	)

⁽¹⁾Excludes fair value of ~~$291.9~~$287.7 associated with hedge funds and private equity funds which fair value is measured using NAV practical expedient.

For the three months ended June 30, 2018

(Millions)
Fixed
Maturities Other
long-term
investments⁽¹⁾ Derivative
instruments
assets &
(liabilities) Contingent
consideration
(liabilities)

Balance at March 31, 2018
$ 8.6 $ 64.9 $ (6.1 ) $ (42.8 )
Total realized and unrealized gains (losses)
(2.1 ) 8.5 5.6 -
Foreign currency gains (losses) through Other Comprehensive Income
- (1.3 ) - -
Purchases
- 0.5 - -
Sales/Settlements
(0.5 ) (3.6 ) (5.3 ) -

Balance at June 30, 2018
$ 6.0 $ 69.0 $ (5.8 ) $ (42.8 )



	For the three months ended September 30, 2018
(Millions)	Fixed Maturities		Other long-term investments⁽¹⁾			Derivative instruments assets & (liabilities)			Contingent consideration (liabilities)
Balance at June 30, 2018	$	6.0	$	69.0		$	(5.8	)	$	(42.8	)
Total realized and unrealized gains (losses)	0.1		(1.6		)	1.7			—
Foreign currency gains (losses) through Other Comprehensive Income	—		0.1			—			—
Purchases	2.4		0.2			—			—
Sales/Settlements	—		(0.2		)	(0.7		)	0.9
Balance at September 30, 2018	$	8.5	$	67.5		$	(4.8	)	$	(41.9	)

⁽¹⁾Excludes fair value of ~~$247.6~~$281.5 associated with hedge funds and private equity funds which fair value is measured using NAV practical expedient.

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

The following tables present changes in Level 3 for financial instruments measured at fair value for the ~~six~~nine months ended ~~June~~September 30, 2019 and ~~June~~September 30, 2018:

For the six months ended June 30, 2019

(Millions)
Fixed
Maturities Other
long-term
investments⁽¹⁾ Derivative
instruments
assets &
(liabilities) Contingent
consideration
(liabilities)

Balance at December 31, 2018
$ 5.4 $ 63.6 $ (0.5 ) $ (28.8 )
Total realized and unrealized gains (losses)
- 9.3 (5.8 ) (2.0 )
Foreign currency gains (losses) through Other Comprehensive Income
- (0.7 ) - -
Purchases
- 15.8 - -
Sales/Settlements
(5.4 ) - 2.7 -

Balance at June 30, 2019
$ - $ 88.0 $ (3.6 ) $ (30.8 )



	For the nine months ended September 30, 2019
(Millions)	Fixed Maturities			Other long-term investments⁽¹⁾			Derivative instruments assets & (liabilities)			Contingent consideration (liabilities)
Balance at December 31, 2018	$	5.4		$	63.6		$	(0.5	)	$	(28.8	)
Total realized and unrealized gains (losses)	—			10.6			(7.7		)	(4.1		)
Foreign currency gains (losses) through Other Comprehensive Income	—			(1.5		)	—			—
Purchases	17.0			15.8			—			—
Sales/Settlements	(5.4		)	(7.8		)	6.0			6.9
Balance at September 30, 2019	$	17.0		$	80.7		$	(2.2	)	$	(26.0	)

(1)Excludes fair value of ~~$291.9~~$287.7 associated with hedge funds and private equity funds which fair value is measured using NAV practical expedient.

For the six months ended June 30, 2018

(Millions) Fixed
Maturities Other
long-term
investments⁽¹⁾ Derivative
instruments
assets &
(liabilities) Contingent
consideration
(liabilities)

Balance at December 31, 2017 $ 8.0 $ 64.2 $ (6.1 ) $ (42.8 )
Total realized and unrealized gains (losses) (2.1 ) 9.3 5.6 -
Foreign currency gains (losses) through Other Comprehensive Income - (1.6 ) - -
Purchases 0.6 0.9 - -
Sales/Settlements (0.5 ) (3.8 ) (5.3 ) -

Balance at June 30, 2018 $ 6.0 $ 69.0 $ (5.8 ) $ (42.8 )



	For the nine months ended September 30, 2018
(Millions)	Fixed Maturities			Other long-term investments⁽¹⁾			Derivative instruments assets & (liabilities)			Contingent consideration (liabilities)
Balance at December 31, 2017	$	8.0		$	64.2		$	(6.1	)	$	(42.8	)
Total realized and unrealized gains (losses)	(2.0		)	7.7			7.3			—
Foreign currency gains (losses) through Other Comprehensive Income	—			(1.5		)	—			—
Purchases	3.0			1.2			—			—
Sales/Settlements	(0.5		)	(4.1		)	(6.0		)	0.9
Balance at September 30, 2018	$	8.5		$	67.5		$	(4.8	)	$	(41.9	)

⁽¹⁾Excludes fair value of ~~$247.6~~$281.5 associated with hedge funds and private equity funds which fair value is measured using NAV practical expedient.

Fair value measurements – transfers between levels

There were no transfers between Level 3 and Level 2 measurements during the three and nine months ended ~~June~~September 30, 2019 and 2018. ~~There were no transfers between Level 3 and Level 2 measurements during the six months ended June 30, 2019 and 2018.~~

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

Significant unobservable inputs

The table below presents information about the significant unobservable inputs used for recurring fair value measurements for certain Level 3 instruments as of ~~June~~September 30, 2019 and December 31, 2018, and includes only those instruments for which information about the inputs is reasonably available to Sirius Group, such as data from independent third-party valuation service providers and from internal valuation models.




(Millions, except share prices)	June 30, 2019								September 30, 2019

Description	Valuation Technique(s)		Fair value		Unobservable input				Valuation Technique(s)	Fair value			Unobservable input

Private equity securities⁽¹⁾	Share price of recent transaction	$	32.5		Purchase share price	$	40.63		Share price of recent transaction	$	32.5		Purchase share price	$	40.63
Preferred stock⁽¹⁾									Share price of recent transaction	$	17.5		Purchase price	$	7.74
Preferred stock⁽¹⁾	Share price of recent transaction	$	17.5		Purchase price	$	7.74		Purchase price of recent transaction	$	12.2		Purchase price	$	12.2
Private equity securities⁽¹⁾	Multiple of GAAP book value	$	16.8		Book value multiple		1.0	X	Multiple of GAAP book value	$	16.6		Book value multiple	1.0X
Private debt instrument⁽¹⁾	Purchase price of recent transaction	$	7.8		Purchase price	$	9.0		Purchase price of recent transaction	$	7.8		Purchase price	$	9.0
Private debt instrument⁽¹⁾	Purchase price of recent transaction	$	6.0		Purchase price	$	6.0
Private equity securities⁽¹⁾	Share price of recent transaction	$	5.1		Purchase price	$	7.74		Share price of recent transaction	$	5.1		Purchase price	$	7.74
Preferred stock⁽¹⁾									Purchase price of recent transaction	$	4.8		Purchase price	$	4.8
Weather derivatives⁽²⁾	Third party appraisal	$	1.7		Broker quote	$	1.7		Third party appraisal	$	4.0		Broker quote	$	4.0
Private equity securities⁽¹⁾	Purchase price of recent transaction	$	1.0		Purchase price	$	10.0
Private equity securities⁽¹⁾	Purchase price of recent transaction	$	0.8		Purchase price	$	0.8		Purchase price of recent transaction	$	1.0		Purchase price	$	10.0
Equity warrants	Option pricing model	$	0.4		Strike price	$	0.2		Option pricing model	$	0.7		Strike price	$	0.2
Private equity securities⁽¹⁾	Purchase price of recent transaction	$	0.3		Purchase price	$	0.3		Purchase price of recent transaction	$	0.2		Purchase price	$	0.2
Private debt instrument⁽¹⁾	Purchase price of recent transaction	$	0.2		Purchase price	$	0.2
Currency forwards⁽²⁾	Third party appraisal	$	0.2		Broker quote	$	0.2
Currency swaps⁽²⁾	Third party appraisal	$	(3.8	)	Broker quote	$	(3.8	)
Currency swaps⁽¹⁾									Third party appraisal	$	(1.2	)	Broker quote	$	(1.2	)
Currency forwards⁽¹⁾									Third party appraisal	$	(5.7	)	Broker quote	$	(5.7	)
Contingent consideration	External valuation model	$	(30.8	)	Discounted future payments	$	(30.8	)	External valuation model	$	(26.0	)	Discounted future payments	$	(26.0	)

⁽¹⁾As of ~~June~~September 30, 2019, each asset type consists of one security.

(2) See

⁽²⁾~~See~~Note 11for discussion of derivative instruments.


			��

(Millions, except share prices)	December 31, 2018								December 31, 2018

Description	Valuation Technique(s)		Fair value		Unobservable input				Valuation Technique(s)	Fair value			Unobservable input

Private equity securities⁽¹⁾	Share price of recent transaction	$	32.5		Purchase share price	$	40.63		Share price of recent transaction	$	32.5		Purchase share price	$	40.63
Private equity securities⁽¹⁾	Multiple of GAAP book value	$	14.7		Book value multiple		0.9	X	Multiple of GAAP book value	$	14.7		Book value multiple	0.9X
Private debt instrument⁽¹⁾	Purchase price of recent transaction	$	9.0		Purchase price	$	9.0		Purchase price of recent transaction	$	9.0		Purchase price	$	9.0
Private debt instrument⁽¹⁾	Purchase price of recent transaction	$	6.0		Purchase price	$	6.0		Purchase price of recent transaction	$	6.0		Purchase price	$	6.0
Preferred stock⁽¹⁾	Share price of recent transaction	$	4.6		Purchase price	$	1.88		Share price of recent transaction	$	4.6		Purchase price	$	1.88
Weather derivatives⁽²⁾	Third party appraisal	$	3.9		Broker quote	$	3.9		Third party appraisal	$	3.9		Broker quote	$	3.9
Private equity securities⁽¹⁾	Purchase price of recent transaction	$	0.9		Purchase price	$	1.88
Private equity securities(¹⁾									Purchase price of recent transaction	$	0.9		Purchase price	$	1.88
Preferred stock⁽¹⁾	Share price of recent transaction	$	0.8		Purchase price	$	0.8		Share price of recent transaction	$	0.8		Purchase price	$	0.8
Private equity securities⁽¹⁾	Share price of recent transaction	$	0.3		Purchase price	$	10.0		Share price of recent transaction	$	0.3		Purchase price	$	10.0
Private debt instrument⁽¹⁾	Purchase price of recent transaction	$	0.2		Purchase price	$	0.2		Purchase price of recent transaction	$	0.2		Purchase price	$	0.2
Interest rate cap⁽²⁾	Third party appraisal	$	0.2		Broker quote	$	0.2		Third party appraisal	$	0.2		Broker quote	$	0.2
Currency swaps⁽²⁾	Third party appraisal	$	(4.6	)	Broker quote	$	(4.6	)	Third party appraisal	$	(4.6	)	Broker quote	$	(4.6	)
Contingent consideration	External valuation model	$	(28.8	)	Discounted future payments	$	(28.8	)	External valuation model	$	(28.8	)	Discounted future payments	$	(28.8	)

⁽¹⁾As of December 31, 2018, each asset type consists of one security.

(2) See

⁽²⁾~~See~~Note 11for discussion of derivative instruments.

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

Financial instruments disclosed, but not carried at fair value

Sirius Group uses various financial instruments in the normal course of its business. The carrying values of Cash, Accrued investment income, certain other assets, Accounts payable on unsettled investment purchases, certain other liabilities, and other financial instruments not included in the table below approximated their fair values at ~~June~~September 30, 2019 and December 31, 2018, due to their respective short maturities. As these financial instruments are not actively traded, their respective fair values are classified within Level 3. The following table includes financial instruments for which the carrying value differs from the estimated fair values at ~~June~~September 30, 2019 and December 31, 2018:

June 30, 2019 December 31, 2018

(Millions) Fair Value⁽¹⁾ Carrying Value Fair Value⁽¹⁾ Carrying Value

Liabilities, Mezzanine equity, and Non-controlling interest:
2017 SEK Subordinated Notes $ 297.0 $ 292.3 $ 309.5 $ 303.6
2016 SIG Senior Notes $ 386.9 $ 393.6 $ 347.6 $ 393.2
Series B preference shares $ 205.2 $ 241.3 $ 191.7 $ 232.2



	September 30, 2019				December 31, 2018
(Millions)	Fair Value⁽¹⁾		Carrying Value		Fair Value⁽¹⁾		Carrying Value
Liabilities, Mezzanine equity, and Non-controlling interest:
2017 SEK Subordinated Notes	$	279.8	$	276.5	$	309.5	$	303.6
2016 SIG Senior Notes	$	397.3	$	393.8	$	347.6	$	393.2
Series B preference shares	$	195.0	$	236.0	$	191.7	$	232.2

⁽¹⁾Fair value estimated by internal pricing and considered a Level 3 measurement.

Note 9. Debt and standby letters of credit facilities

Sirius Group's debt outstanding as of ~~June~~September 30, 2019 and December 31, 2018 consisted of the following:




(Millions)		June 30, 2019		Effective Rate⁽¹⁾			December 31, 2018		Effective Rate⁽¹⁾		September 30, 2019			Effective Rate⁽¹⁾		December 31, 2018			Effective Rate⁽¹⁾

2017 SEK Subordinated Notes, at face value	$	296.2		3.9	%	$	307.6		3.8	%	$	280.2		4.0	%	$	307.6		3.8	%
Unamortized issuance costs		(3.9	)				(4.0	)			(3.7		)			(4.0		)

2017 SEK Subordinated Notes, carrying value		292.3					303.6				276.5					303.6

2016 SIG Senior Notes, at face value		400.0		4.7	%		400.0		4.7	%	400.0			4.7	%	400.0			4.7	%
Unamortized discount		(2.5	)				(2.6	)			(2.4		)			(2.6		)
Unamortized issuance costs		(3.9	)				(4.2	)			(3.8		)			(4.2		)

2016 SIG Senior Notes, carrying value		393.6					393.2				393.8					393.2

Total debt	$	685.9				$	696.8				$	670.3				$	696.8

⁽¹⁾Effective rate considers the effect of the debt issuance costs.

2017 SEK Subordinated Notes

On September 22, 2017, Sirius Group issued floating rate callable subordinated notes denominated in Swedish kronor ("SEK") in the amount of SEK 2,750.0 million (or $346.1 million on date of issuance) at a 100% issue price ("2017 SEK Subordinated Notes"). The 2017 SEK Subordinated Notes were issued in an offering that was exempt from the registration requirements of the Securities Act of 1933 (the "Securities Act"). The 2017 SEK Subordinated Notes bear interest on their principal amount at a floating rate equal to the applicable Stockholm Interbank Offered Rate ("STIBOR") for the relevant interest period plus an applicable margin, payable quarterly in arrears on March 22, June 22, September 22, and December 22 in each year commencing on December 22, 2017, until maturity in September 2047.

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

Beginning on September 22, 2022, the 2017 SEK Subordinated Notes may be redeemed, in whole or in part, at Sirius Group's option. In addition, within 90 days following the occurrence of a Specified Event (as defined below), the 2017 SEK Subordinated Notes may be redeemed, in whole but not in part, at Sirius Group's option. "Specified Event" means (a) an "Additional Amounts Event" in connection with a change in laws, rules or regulations as a result of which Sirius Group is obligated to pay additional amounts on the notes in respect of any withholding or deduction for taxes, (b) a "Tax Event" in connection with a change in laws, rules or regulations as a result of which interest on the notes is no longer fully deductible by Sirius Group for income tax purposes in the applicable jurisdiction (to the extent that such interest was so deductible as of the time of such Tax Event), (c) a "Rating Methodology Event" in connection with a change in, or clarification to, the rating methodology of Standard & Poor's or Fitch that results in a materially unfavorable capital treatment of the notes, or (d) a "Regulatory Event" in connection with a change in, or clarification to, applicable supervisory regulations that results in the notes no longer qualifying as Tier 2 Capital.

Sirius Group incurred $4.6 million in expenses related to the issuance of the 2017 SEK Subordinated Notes (including SEK 27.5 million, or $3.5 million, in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2017 SEK Subordinated Notes. For the three months ended ~~June~~September 30, 2019 and 2018, Sirius Group recognized ~~$0.3~~$15.9 million and ~~$27.8~~$(1.6) million, respectively, of foreign currency exchange gains (loss) on the remeasurement of the 2017 SEK Subordinated Notes into USD from SEK. For the nine months ended September 30, 2019 and 2018, Sirius Group recognized $27.2 million and $26.2 million, respectively, of foreign currency exchange gains on the remeasurement of the 2017 SEK Subordinated Notes into USD from SEK. For the six months ended June 30, 2019 and 2018, Sirius Group recognized $11.3 million and $27.8 million, respectively, of foreign currency exchange gains on the remeasurement of the 2017 SEK Subordinated Notes into USD from SEK.

Taking into effect the amortization of all underwriting and issuance expenses, and applicable STIBOR, the 2017 SEK Subordinated Notes yielded an effective rate of approximately 4.1% and 3.5% annualized for the three months ended ~~June~~September 30, 2019 and 2018, respectively. The effective rate for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 were ~~3.9%~~4.0% and 3.5% annualized, respectively. Sirius Group recorded ~~$3.2~~$3.0 million and ~~$3.0~~$2.9 million of interest expense, inclusive of amortization of issuance costs on the 2017 SEK Subordinated Notes for the three months ended ~~June~~September 30, 2019 and 2018, respectively. Sirius Group recorded ~~$6.0~~$8.9 million and ~~$5.9~~$8.8 million of interest expense, inclusive of amortization of issuance costs on the 2017 SEK Subordinated Notes for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, respectively.

2016 SIG Senior Notes

On November 1, 2016, Sirius Group issued $400.0 million face value of senior unsecured notes ("2016 SIG Senior Notes") at an issue price of 99.209% for net proceeds of $392.4 million after taking into effect both deferrable and non-deferrable issuance costs. The 2016 SIG Senior Notes were issued in an offering that was exempt from the registration requirements of the Securities Act. The 2016 SIG Senior Notes bear an annual interest rate of 4.6%, payable semi-annually in arrears on May 1, and November 1, in each year commencing on May 1, 2017, until maturity in November 2026.

Sirius Group incurred $5.1 million in expenses related to the issuance of the 2016 SIG Senior Notes (including $3.4 million in underwriting fees), which have been deferred and are being recognized into interest expense over the life of the 2016 SIG Senior Notes.

Taking into effect the amortization of the original issue discount and all underwriting and issuance expenses, the 2016 SIG Senior Notes yield an effective rate of approximately 4.7% per annum. Sirius Group recorded $4.8 million, inclusive of amortization of issuance costs on the 2016 SIG Senior Notes, for both three month periods ended ~~June~~September 30, 2019 and 2018. Sirius Group recorded ~~$9.6~~$14.3 million of interest expense, inclusive of amortization of issuance costs on the 2016 SIG Senior Notes, for both the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Standby letter of credit facilities

On November 9, 2018, Sirius International Insurance Corporation ("Sirius International"), a wholly owned subsidiary of the Company, renewed two standby letter of credit facility agreements totaling $160 million to provide capital support for Lloyd's Syndicate 1945. The first letter of credit is a renewal of a $125 million facility with Nordea Bank Finland Abp, London Branch, which is issued on an unsecured basis. The second letter of credit is a $35 million facility with DNB Bank ASA, Sweden Branch, $25 million of which is issued on an unsecured basis. Each facility is renewable annually. The above referenced facilities are subject to various affirmative, negative and financial covenants that the Company considers to be customary for such borrowings, including certain minimum net worth, maximum debt to capitalization standards, and change in control provisions.

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

Sirius International has other secured letter of credit and trust arrangements with various financial institutions to support its insurance operations. As of ~~June~~September 30, 2019 and December 31, 2018, these secured letter of credit and trust arrangements were collateralized by pledged assets and assets in trust of SEK ~~3.0~~2.9 billion and SEK 2.9 billion, respectively, or ~~$319.0~~$300.5 million and $321.3 million, respectively (based on the ~~June~~September 30, 2019 and December 31, 2018 SEK to USD exchange rates). As of ~~June~~September 30, 2019 and December 31, 2018, Sirius America Insurance Company's trust arrangements were collateralized by pledged assets and assets in trust of ~~$57.2~~$57.5 million and $56.2 million, respectively. As of ~~June~~September 30, 2019 and December 31, 2018, Sirius Bermuda's trust arrangements were collateralized by pledged assets and assets in trust of ~~$349.6~~$350.6 million and $319.7 million, respectively.

Revolving credit facility

In February 2018, Sirius Group, through its indirectly wholly-owned subsidiary Sirius International Group, Ltd. entered into a three-year, $300 million senior unsecured revolving credit facility (the "Facility"). The Facility provides access to loans for working capital and general corporate purposes, and letters of credit to support obligations under insurance and reinsurance agreements and retrocessional agreements. The Facility is subject to various affirmative, negative and financial covenants that Sirius Group considers to be customary for such borrowings, including certain minimum net worth, maximum debt to capitalization, financial strength rating standards, and change in control provisions. As of ~~June~~September 30, 2019, there were no outstanding borrowings under the Facility.

Debt and standby letter of credit facility covenants

As of ~~June~~September 30, 2019, Sirius Group was in compliance with all of the covenants under the 2017 SEK Subordinated Notes, the 2016 SIG Senior Notes, the Nordea Bank Finland Abp, London Branch facility, and the DNB Bank ASA, Sweden Branch facility. In addition, as of ~~June~~September 30, 2019, Sirius Group was in compliance with all of the covenants under the Facility.

Interest

Total interest expense incurred by Sirius Group for its indebtedness for the three months ended ~~June~~September 30, 2019 and 2018 was ~~$8.0~~$7.7 million and ~~$7.8~~$7.6 million, respectively. Total interest expense incurred by Sirius Group for its indebtedness for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 was ~~$15.6~~$23.3 million and ~~$15.5~~$23.1 million, respectively. Total interest paid by Sirius Group for its indebtedness for the three months ended ~~June~~September 30, 2019 and 2018 was ~~$12.2~~$2.8 million and ~~$12.1~~$2.9 million, respectively. Total interest paid by Sirius Group for its indebtedness for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 was ~~$14.9~~$17.7 million and ~~$15.0~~$17.9 million, respectively.

Note 10. Income taxes

The Company and its Bermuda-domiciled subsidiaries are not subject to Bermuda income tax under current Bermuda law. In the event there is a change in the current law such that taxes are imposed, the Company and its Bermuda-domiciled subsidiaries would be exempt from such tax until March 31, 2035, pursuant to the Bermuda Exempted Undertakings Tax Protection Act of 1966. The Company has subsidiaries and branches that operate in various other jurisdictions around the world that are subject to tax in the jurisdictions in which they operate. The jurisdictions in which the Company's subsidiaries and branches are subject to tax are Australia, Belgium, Canada, Denmark, Germany, Gibraltar, Hong Kong (China), Luxembourg, Malaysia, the Netherlands, Shanghai (China), Singapore, Spain, Sweden, Switzerland, the United Kingdom, and the United States.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Sirius Group reported an income tax expense (benefit) of ~~$2.1~~$(3.7) million and ~~$51.2~~$(6.9) million during the three months ended ~~June~~September 30, 2019 and 2018, respectively, on pre-tax income (loss) of ~~$10.3~~$(11.3) million and ~~$149.4~~$(34.6) million, respectively. Sirius Group reported an income tax expense of ~~$19.3~~$15.6 million and ~~$62.3~~$55.4 million during the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, respectively, on pre-tax income of ~~$131.6~~$120.3 million and ~~$203.8~~$169.2 million, respectively. The effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2019 was ~~14.5%~~13.0%, which was lower than the Swedish statutory rate of 21.4% (the rate at which the majority of Sirius Group's worldwide operations are taxed) primarily because of income recognized in jurisdictions with lower rates than Sweden. The effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2018 was ~~30.6%~~32.7%, which was higher than the Swedish statutory rate of 22% (the rate at which the majority of Sirius Group's worldwide operations are taxed) primarily because of non-recurring adjustments to Sirius Group's deferred tax assets which resulted from various internal restructurings and changes in Sirius Group's accounting for uncertain tax positions. In arriving at the effective tax rate for the ~~six~~nine month periods ended ~~June~~September 30, 2019 and 2018, Sirius Group forecasted all income and expense items including the change in unrealized investment gains (losses) and realized investment gains (losses) for the years ending December 31, 2019 and 2018.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

The Tax Cuts and Jobs Act (the "TCJA") was enacted into law in the U.S. in December 2017. The Company previously applied Staff Accounting Bulletin 118 ("SAB 118"), which provided guidance on accounting for the tax effects of the TCJA. SAB 118 addresses situations where accounting for certain income tax effects of the TCJA under ASC 740, Income Taxes ("ASC 740"), may be incomplete upon issuance of an entity's financial statements and provides a one-year measurement period from the enactment date to complete the accounting under ASC 740. The Company has completed its accounting for all material tax effects of the TCJA and recognized adjustments as of December 31, 2018.

The TCJA includes a new Base Erosion and Anti-Abuse Minimum Tax ("BEAT") provision, which is essentially a minimum tax that is potentially applicable to certain otherwise deductible payments made by U.S. entities to non-U.S. affiliates, including cross-border interest payments and reinsurance premiums. The statutory BEAT rate is 10% in 2019-2025, and then rises to 12.5% in 2026 and thereafter. The TCJA also includes provisions for Global Intangible Low-Taxed Income ("GILTI") under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of certain foreign subsidiaries. Consistent with accounting guidance, Sirius Group will treat BEAT as an in period tax charge when incurred in future periods for which no deferred taxes need to be provided and has made an accounting policy election to treat GILTI taxes in a similar manner. No provision for income taxes related to BEAT or GILTI was recorded as of ~~June~~September 30, 2019 and December 31, 2018.

Sirius Group has capital and liquidity in many of its subsidiaries, some of which may reflect undistributed earnings. If such capital or liquidity were to be paid or distributed to the Company or Sirius Group's subsidiaries, as dividends or otherwise, they may be subject to income or withholding taxes. Sirius Group generally intends to operate, and manage its capital and liquidity, in a tax-efficient manner. However, the applicable tax laws in relevant countries are still evolving, including in response to guidance from the Organisation for Economic Cooperation and Development. Accordingly, such payments or earnings may be subject to income or withholding tax in jurisdictions where they are not currently taxed or at higher rates of tax than currently taxed, and the applicable tax authorities could attempt to apply income or withholding tax to past earnings or payments.

Deferred tax asset, net of valuation allowance

Sirius Group's net deferred tax liability, net of the valuation allowance as of ~~June~~September 30, 2019 is ~~$55.3~~$45.8 million. Of the ~~$55.3~~$45.8 million, ~~$32.7~~$33.6 million relates to net deferred tax assets in U.S. subsidiaries, ~~$130.5~~$118.5 million relates to net deferred tax assets in Luxembourg subsidiaries, ~~$12.9~~$13.6 million relates to net deferred tax assets in United Kingdom subsidiaries, ~~$229.7~~$208.6 million relates to net deferred tax liabilities in Sweden subsidiaries, and ~~$1.7~~$2.9 million relates to other net deferred tax liability.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Sirius Group records a valuation allowance against deferred tax assets if it becomes more likely than not that all or a portion of a deferred tax asset will not be realized. Changes in valuation allowances from period to period are included in income tax expense in the period of change. In determining whether or not a valuation allowance, or change therein, is warranted, Sirius Group considers factors such as prior earnings history, expected future earnings, carryback and carryforward periods and strategies that if executed would result in the realization of a deferred tax asset. It is possible that certain planning strategies or projected earnings in certain subsidiaries may not be feasible to utilize the entire deferred tax asset, which could result in material changes to Sirius Group's deferred tax assets and tax expense.

Uncertain tax positions

Recognition of the benefit of a given tax position is based upon whether a company determines that it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. In evaluating the more likely than not recognition threshold, Sirius Group must presume that the tax position will be subject to examination by a taxing authority with full knowledge of all relevant information. If the recognition threshold is met, then the tax position is measured at the largest amount of benefit that is more than 50% likely of being realized upon ultimate settlement.

As of ~~June~~September 30, 2019, the total reserve for unrecognized tax benefits is ~~$63.3~~$59.1 million. If Sirius Group determines in the future that its reserves for unrecognized tax benefits on permanent differences and interest and penalties are not needed, the reversal of ~~$63.2~~$58.9 million of such reserves as of ~~June~~September 30, 2019 would be recorded as an income tax benefit and would impact the effective tax rate. If Sirius Group determines in the future that its reserves for unrecognized tax benefits on temporary differences are not needed, the reversal of ~~$0.1~~$0.2 million of such reserves as of ~~June~~September 30, 2019 would not impact the effective tax rate due to deferred tax accounting but would accelerate the payment of cash to the taxing authority. The vast majority of Sirius Group's reserves for unrecognized tax benefits on temporary differences relate to deductions for loss reserves where the timing of the deductions is uncertain.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

The Swedish Tax Authority ("STA") has denied deductions claimed by two of the Company's Swedish subsidiaries in certain tax years for interest paid on intra-group debt instruments. Sirius Group has challenged the STA's denial in court based on the technical merits. In October 2018, one of the Swedish subsidiaries received an adverse decision from Sweden's Administrative Court, which Sirius Group has appealed. Sirius Group has taken into account this and other relevant developments in applicable Swedish tax law and has established a reserve for this uncertain tax position. As of ~~June~~September 30, 2019, the total amount of such reserve was ~~$60.4~~$56.2 million.

In connection with this matter, Sirius Group has also taken into account the Stock Purchase Agreement ("SPA") by which Sirius Group was sold to CMIG International Holding Pte. Ltd ("CMIG International") in 2016 and has recorded an indemnification asset. Pursuant to the SPA, the seller agreed to indemnify the buyer and Sirius Group for, among other things, (1) any additional tax liability in excess of Sirius Group's accounting for uncertain tax positions for tax periods prior to the sale of Sirius Group to CMIG International, and (2) an impairment in Sirius Group's net deferred tax assets resulting from a final determination by a tax authority. While Sirius Group intends to continue challenging the STA's denial based on the technical merits (including appealing the adverse court decision received in October 2018), the ultimate resolution of these tax disputes is uncertain and no assurance can be given that there will be no material changes to Sirius Group's operating results or balance sheet in connection with these uncertain tax positions or the related indemnification.

With few exceptions, Sirius Group is no longer subject to U.S. federal, state or non-U.S. income tax examinations by tax authorities for years before 2014.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Note 11. Derivatives

Interest Rate Cap

Sirius Group entered into an interest rate swap ("Interest Rate Cap") with two financial institutions where it paid an upfront premium and in return receives a series of quarterly payments based on the 3-month London Interbank Offered Rate at the time of payment. The Interest Rate Cap does not qualify for hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Other revenue. The fair value of the interest rate cap has been estimated using a single broker quote and, accordingly, has been classified as a Level 3 measurement as of ~~June~~September 30, 2019 and December 31, 2018. Collateral held is recorded within short-term investments with an equal amount recognized as a liability to return collateral. Sirius Group's liability to return that collateral is based on the amounts provided by the counterparties and investment earnings thereon. As at ~~June~~September 30, 2019 and December 31, 2018, Sirius Group held collateral balances of $0.2 million and $0.3 million, respectively.

Foreign currency swaps

Sirius Group executes foreign currency swaps to manage foreign currency exposure. The foreign currency swaps have not been designated or accounted for under hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Net foreign exchange gains (losses). The fair value of the foreign currency swaps has been estimated using a single broker quote and, accordingly, has been classified as a Level 3 measurement as of ~~June~~September 30, 2019 and December 31, 2018. Sirius Group does not provide or hold any collateral associated with the swaps.

Foreign currency forward

Sirius Group executes foreign currency forwards to manage currency exposure against a foreign currency investment. The foreign currency forwards are not designated or accounted for under hedge accounting. Changes in fair value are recognized as unrealized gains or losses and are presented within Net foreign exchange gains (losses). The fair value of the foreign currency forwards are estimated using a single broker quote and accordingly, classified as a Level 3 measurement. Sirius Group did not provide or hold any collateral associated with the forwards.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

Weather derivatives

Sirius Group holds assets and assumes liabilities related to weather and weather contingent risk management products. Weather and weather contingent derivative contracts are entered into with the objective of generating profits in normal climatic conditions. Accordingly, Sirius Group's weather and weather contingent derivatives are not designed to meet the criteria for hedge accounting under GAAP. Sirius Group receives payment of premium at the contract inception in exchange for bearing the risk of variations in a quantifiable weather index. Changes in fair value are recognized as unrealized gains or losses and are presented within Other revenue. The fair value of the weather derivatives was estimated using a broker quote. Because of the significance of the unobservable inputs used to estimate the fair value of Sirius Group's weather risk contracts, the fair value measurements of the contracts are deemed to be Level 3 measurements in the fair value hierarchy as of ~~June~~September 30, 2019 and December 31, 2018. Sirius Group does not provide or hold any collateral associated with the weather derivatives.

Equity futures contracts

Sirius Group executes trades in equity futures contracts to hedge against long positions in Common equities. The equity futures contracts are not designated or accounted for under hedge accounting. Changes in fair value are presented within Net realized investment gains (losses). The fair value of the equity put options is widely available and have quoted prices in active markets and accordingly, were classified as a Level 1 measurement.

Equity put options

Sirius Group executes trades in equity put options to hedge against long positions in Common equities. The equity put options are not designated or accounted for under hedge accounting. Changes in fair value are presented within Net unrealized investment (losses) gains. The fair value of the equity put options is widely available and have quoted prices in active markets and accordingly, were classified as a Level 1 measurement.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Equity warrants

Sirius Group holds restricted equity warrants as part of its investment strategy. The equity warrants are not designated or accounted for under hedge accounting. Changes in fair value are presented within Net unrealized investment (losses) gains. The fair value of the equity warrants is estimated using a single broker quote and accordingly, classified as a Level 3 measurement. Sirius Group did not provide or hold any collateral associated with the equity warrants.

The following tables summarize information on the classification and amount of the fair value of derivatives not designated as hedging instruments within the Company's Consolidated Balance Sheets as at ~~June~~September 30, 2019 and December 31, 2018:




(Millions)		June 30, 2019							December 31, 2018					September 30, 2019							December 31, 2018

Derivatives not designated as hedging instruments		Notional Value			Asset derivative at fair value⁽¹⁾		Liability derivative at fair value⁽²⁾		Notional Value		Asset derivative at fair value⁽¹⁾		Liability derivative at fair value⁽²⁾	Notional Value			Asset derivative at fair value⁽¹⁾		Liability derivative at fair value⁽²⁾		Notional Value		Asset derivative at fair value⁽¹⁾		Liability derivative at fair value⁽²⁾

Interest rate cap	$	250.0		$	-	$	-	$	250.0	$	0.2	$	-	$	250.0		$	—	$	—	$	250.0	$	0.2	$	—
Foreign currency swaps	$	90.0		$	-	$	4.9	$	45.0	$	-	$	4.6	$	90.0		$	—	$	1.2	$	45.0	$	—	$	4.6
Foreign currency forwards	$	10.0		$	-	$	0.8	$	-	$	-	$	-	$	(5.0	)	$	—	$	5.7	$	—	$	—	$	—
Weather derivatives	$	53.4		$	1.7	$	-	$	150.5	$	3.9	$	-	$	95.5		$	4.0	$	—	$	150.5	$	3.9	$	—
Equity futures contracts	$	(8.1	)	$	-	$	-	$	-	$	-	$	-	$	1.8		$	—	$	—	$	—	$	—	$	—
Equity put options	$	14.7		$	0.8	$	0.3	$	6.2	$	-	$	0.5	$	23.4		$	1.9	$	0.3	$	6.2	$	—	$	0.5
Equity warrants	$	0.4		$	0.4	$	-	$	-	$	-	$	-	$	0.7		$	0.7	$	—	$	—	$	—	$	—

⁽¹⁾Asset derivatives are classified within Other assets within the Company's Consolidated Balance Sheets at ~~June~~September 30, 2019 and December 31, 2018.

(2)Liability derivatives are classified within Other liabilities within the Company's Consolidated Balance Sheets at ~~June~~September 30, 2019 and December 31, 2018.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

The following table summarizes information on the classification and net impact on earnings, recognized in the Company's Consolidated Statements of Income relating to derivatives during the three months and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:




(Millions)														For the three months ended September 30,						For the nine months ended September 30,
		For the three months ended June 30,						For the six months ended June 30,

Derivatives not designated as hedging instruments	Classification of gains (losses) recognized in earnings		2019			2018			2019			2018	Classification of gains (losses) recognized in earnings	2019			2018			2019			2018

Interest rate cap	Other revenues	$	(0.1	)	$	(0.1	)	$	(0.2	)	$	0.2	Other revenues	$	—		$	—		$	(0.2	)	$	0.2
Foreign currency swaps	Net foreign exchange gains	$	1.6		$	4.3		$	2.4		$	3.0	Net foreign exchange gains	$	3.7		$	(0.1	)	$	6.1		$	2.9
Foreign currency forwards	Net foreign exchange gains (losses)	$	(3.2	)	$	-		$	(3.0	)	$	-	Net foreign exchange gains (losses)	$	(7.8	)	$	—		$	(10.8	)	$	—
Weather derivatives	Other revenues	$	0.6		$	1.4		$	(5.5	)	$	2.4	Other revenues	$	1.9		$	1.8		$	(3.6	)	$	4.2
Equity futures contracts	Net realized investment gains (losses)	$	(0.2	)	$	-		$	(0.8	)	$	-	Net realized investment gains (losses)	$	0.1		$	—		$	(0.7	)	$	—
Equity futures contracts	Net unrealized investment gains	$	-		$	-		$	(0.2	)	$	-	Net unrealized investment gains	$	(0.5	)	$	—		$	(0.6	)	$	—
Equity put options	Net unrealized investment gains	$	(0.1	)	$	1.4		$	(0.5	)	$	2.4	Net realized investment gains (losses)	$	(0.8	)	$	—		$	(0.8	)	$	—
Equity put options													Net unrealized investment gains	$	0.7		$	—		$	0.2		$	—
Equity warrants	Net unrealized investment gains	$	0.4		$	-		$	0.4		$	-	Net unrealized investment gains	$	0.3		$	—		$	0.7		$	—

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Note 12. Share-based compensation

Sirius Group's employee compensation plans include grants for various types of share-based and ~~non share-based~~non-share-based compensation awards to key employees of Sirius Group. As at ~~June~~September 30, 2019, Sirius Group's share-based compensation awards consist of performance shares units, restricted share units, restricted stock and options.

For the three and nine months ended ~~June~~September 30, 2019, Sirius Group granted members of the Board of Directors of the Company ~~34,615~~2,424 restricted ~~shares.~~shares and 37,039 restricted shares, respectively. For the ~~six~~three months ended ~~June~~September 30, 2019, Sirius Group granted ~~401,311~~7,059 performance share units, ~~1,411,714~~16,471 restricted share units, and 2,424 restricted shares. For the nine months ended September 30, 2019, Sirius Group granted 408,370 performance share units, 1,428,185 restricted share units, 1,374,944 officer stock options and ~~34,615 of~~37,039 restricted shares.

During the three ~~and six~~ months ended ~~June~~September 30, 2019, Sirius Group employees forfeited ~~14,335~~43,230 performance share units and ~~46,052~~25,936 restricted share units.

During the nine months ended September 30, 2019, Sirius Group employees forfeited 57,565 performance share units and 71,988 restricted share units.

As at ~~June~~September 30, 2019 there were ~~$31.8~~$27.1 million of unrecognized share-based compensation costs, which are expected to be recognized over the next two to three years. There were no unrecognized share-based compensation costs as at ~~June~~September 30, 2018.

Note 13. Common shareholder's equity, mezzanine equity, and non-controlling interests

Common shareholder's equity

The authorized share capital of the Company consists of 500,000,000 Common shares, $0.01 par value per share, and 100,000,000 Preference shares, $0.01 par value per share.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

The following table presents changes in the Company's issued and outstanding Common shares as of ~~June~~September 30, 2019 and 2018, respectively:

Three months ended June 30, Six months ended June 30,
(Millions) 2019 2018 2019 2018

Common shares:
Shares issued and outstanding, beginning of period 115,262,303 120,000,000 115,151,251 120,000,000
Issuance of shares to directors and employees 34,615 - 145,667 -

Shares issued and outstanding, end of period 115,296,918 120,000,000 115,296,918 120,000,000



	Three months ended September 30,		Nine months ended September 30,
(Millions)	2019	2018	2019	2018
Common shares:
Shares issued and outstanding, beginning of period	115,296,918	120,000,000	115,151,251	120,000,000
Issuance of shares to directors and employees	2,424	—	148,091	—
Shares issued and outstanding, end of period	115,299,342	120,000,000	115,299,342	120,000,000

Dividends

The Company did not pay dividends to common shareholders during the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018.

Mezzanine equity

Series B Preference Shares

On November 5, 2018, in connection with the closing of the Merger, Sirius Group issued 11,901,670 of the 15,000,000 designated Series B preference shares, with a par value of $0.01 per share, as part of the Sirius Group Private Placement. (SeeNote 3.)

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

The Series B preference shares rank senior to common shares with respect to dividend rights, rights of liquidation, winding-up, or dissolution of the Company and junior to all of the Company's existing and future policyholder obligations and debt obligations. Without the consent of the holders of the Series B preference shares, the Company may not issue any class or series of shares that rank senior or pari passu with the Series B preference shares as to the payment of dividends or as to distribution of assets upon any voluntary or involuntary liquidation, winding-up or dissolution of the Company, if the aggregate gross proceeds from the issuance of all such senior or pari passu shares equals or exceeds $100 million.

The Company adjusts the carrying value of the Series B preference shares to equal the redemption value at the end of each reporting period. At ~~June~~September 30, 2019 and December 31, 2018, the balance of the Series B preference shares was ~~$241.3~~$236.0 million and $232.2 million, respectively.

Series A Redeemable Preference Shares

In connection with the acquisition of IMG, the Company issued mandatorily convertible stock in the form of Series A redeemable preference shares as a portion of the consideration paid. The Company issued 100,000 of the 150,000 authorized Series A redeemable preference shares to the seller of IMG. Each Series A redeemable preference share has a liquidation preference per share of $1,000.

On November 5, 2018, in connection with the closing of the Merger, the Company redeemed the 100,000 outstanding shares of Series A redeemable preference shares for $95.0 million. Sirius Group recorded a $13.8 million gain on the redemption of the Series A redeemable preference shares.

Non-controlling interests

Non-controlling interests consist of the ownership interests of non-controlling shareholders in consolidated entities and are presented separately on the balance sheet. At ~~June~~September 30, 2019 and December 31, 2018 Sirius Group's balance sheet included ~~$3.0~~$3.4 million and $1.7 million, respectively, in non-controlling interests.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

The following tables show the change in non-controlling interest for the three months and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:

(Millions) For the three
months ended
June 30, 2019 For the three
months ended
June 30, 2018

Non-controlling interests, beginning of the period $ 2.2 $ 0.5
Net income attributable to non-controlling interests 0.8 0.4
Other, net - 0.1

Non-controlling interests, end of the period $ 3.0 $ 1.0



(Millions)	For the three months ended September 30, 2019		For the three months ended September 30, 2018
Non-controlling interests, beginning of the period	$	3.0	$	1.0
Net income attributable to non-controlling interests	0.4		0.3
Other, net	—		(0.2		)
Non-controlling interests, end of the period	$	3.4	$	1.1

(Millions) For the six
months ended
June 30, 2019 For the six
months ended
June 30, 2018

Non-controlling interests, beginning of the period $ 1.7 $ 0.2
Net income attributable to non-controlling interests 1.2 0.6
Other, net 0.1 0.2

Non-controlling interests, end of the period $ 3.0 $ 1.0



(Millions)	For the nine months ended September 30, 2019		For the nine months ended September 30, 2018
Non-controlling interests, beginning of the period	$	1.7	$	0.2
Net income attributable to non-controlling interests	1.6		0.9
Other, net	0.1		—
Non-controlling interests, end of the period	$	3.4	$	1.1

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Alstead Re

As of ~~June~~September 30, 2019 and December 31, 2018, Sirius Group recorded non-controlling interest of ~~$2.7~~$3.3 million and $1.7 million, respectively, in Alstead Re Insurance Company ("Alstead Re"). (SeeNote 16.)

Note 14. Earnings per share

Basic earnings per share is computed by dividing net income available to Sirius Group common shareholders by the weighted-average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income (loss) available to Sirius Group common shareholders on a diluted basis by the weighted-average number of common shares outstanding adjusted to give effect to potentially dilutive securities.

The Series B preference shares and the Series A redeemable preference shares both qualify as participating securities, which requires the application of the two-class method to compute both basic and diluted earnings per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common shareholders. The Series B preference shares and the Series A redeemable preference shares have no obligation to absorb losses of the Company in periods of net loss.

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

The following table sets forth the computation of basic and diluted earnings per common share for the three months and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018:




		For the three months ended June 30,						For the six months ended June 30,					For the three months ended September 30,						For the nine months ended September 30,
(Millions, except share and per share information)		2019			2018			2019			2018		2019			2018			2019			2018

Basic earnings per share
Numerator:
Net income	$	8.2		$	98.2		$	112.3		$	141.5		$	(7.6	)	$	(27.7	)	$	104.7		$	113.8
Less: Income attributable to non-controlling interests		(0.8	)		(0.4	)		(1.2	)		(0.6	)	(0.4		)	(0.3		)	(1.6		)	(0.9		)
Less: Change in carrying value of Series B preference shares		(0.8	)		-			(9.2	)		-		5.3			—			(3.9		)	—
Less: Accrued dividends on Series A redeemable preference shares		-			-			-			(2.6	)	—			—			—			(2.6		)

Net income available for dividends out of undistributed earnings	$	6.6		$	97.8		$	101.9		$	138.3		$	(2.7	)	$	(28.0	)	$	99.2		$	110.3
Less: Earnings attributable to Series B preference shares		(0.6	)		-			(9.5	)		-		—			—			(9.3		)	—
Less: Earnings attributable to Series A redeemable preference shares		-			(4.0	)		-			(5.7	)	—			—			—			(4.5		)

Net income available to Sirius Group common shareholders	$	6.0		$	93.8		$	92.4		$	132.6		$	(2.7	)	$	(28.0	)	$	89.9		$	105.8

Denominator:
Weighted average shares outstanding for basic earnings per share		115,243,685			120,000,000			115,212,772			120,000,000		115,251,853			120,000,000			115,225,942			120,000,000

Basic earnings per share	$	0.05		$	0.78		$	0.80		$	1.11		$	(0.02	)	$	(0.23	)	$	0.78		$	0.88



Diluted earnings per share
Numerator:
Net income available to Sirius Group common shareholders	$	6.0		$	93.8		$	92.4		$	132.6		$	(2.7	)	$	(28.0	)	$	89.9		$	105.8
Add: Change in carrying value of Series B preference shares		-			-			9.2			-		(5.3		)	—			—			—

Net income available to Sirius Group common shareholders on a diluted basis	$	6.0		$	93.8		$	101.6		$	132.6		$	(8.0	)	$	(28.0	)	$	89.9		$	105.8

Denominator:
Weighted average shares outstanding for basic earnings per share		115,243,685			120,000,000			115,212,772			120,000,000		115,251,853			120,000,000			115,225,942			120,000,000
Add: Series B preference shares		-			-			11,901,670			-		11,901,670			—			—			—
Add: Unvested performance share units and restricted share units		552,682			-			427,960			-		—			—			393,280			—

Weighted average shares outstanding for diluted earnings per share⁽¹⁾		115,796,367			120,000,000			127,542,402			120,000,000		127,153,523			120,000,000			115,619,222			120,000,000

Diluted earnings per share	$	0.05		$	0.78		$	0.80		$	1.11		$	(0.06	)	$	(0.23	)	$	0.78		$	0.88

⁽¹⁾For the three months ended ~~June~~September 30, 2019, there were a total of ~~30,933,781~~19,537,270 potentially dilutive securities excluded from the calculation of Diluted earnings per share. For the ~~six~~nine months ended ~~June~~September 30, 2019, there were a total of ~~19,156,833~~31,045,660 potentially dilutive securities excluded from the calculation of Diluted earnings per share. As at ~~June~~September 30, 2018, there were no potentially dilutive securities excluded from the calculation of Diluted earnings per share.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

Note 15. Investments in unconsolidated entities

Sirius Group's investments in unconsolidated entities are included within Other long-term investments and consist of investments in common equity securities or similar instruments, which give Sirius Group the ability to exert significant influence over the investee's operating and financial policies ("equity method eligible unconsolidated entities"). Such investments may be accounted for under either the equity method or, alternatively, Sirius Group may elect to account for them under the fair value option.

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

The following table presents the components of Other long-term investments as of ~~June~~September 30, 2019 and December 31, 2018:

(Millions) June 30, 2019 December 31, 2018

Equity method eligible unconsolidated entities, at fair value $ 156.3 $ 169.4
Other unconsolidated investments, at fair value⁽¹⁾ 223.6 195.6

Total Other long-term investments⁽²⁾ $ 379.9 $ 365.0



(Millions)	September 30, 2019		December 31, 2018
Equity method eligible unconsolidated entities, at fair value	$	143.5	$	169.4
Other unconsolidated investments, at fair value⁽¹⁾	224.9		195.6
Total Other long-term investments⁽²⁾	$	368.4	$	365.0

⁽¹⁾Includes Other long-term investments that are not equity method eligible.

⁽²⁾There were no investments accounted for using the equity method as of ~~June~~September 30, 2019 and December 31, ~~2018.~~2018

Equity method eligible unconsolidated entities, at fair value

Sirius Group has elected the fair value option to account for its equity method eligible investments accounted for as part of Other long-term investments for consistency of presentation with the rest of its investment portfolio. The following table presents Sirius Group's investments in equity method eligible unconsolidated entities as of ~~June~~September 30, 2019 and December 31, 2018 with ownership interest greater than 20%:

Ownership interest at
Investee June 30,
2019 December 31,
2018 Instrument Held

BE Reinsurance Limited 25.0 % 25.0 % Common shares
BioVentures Investors (Offshore) IV LP 73.0 % 73.0 % Units
Camden Partners Strategic Fund V (Cayman), LP 39.4 % 36.4 % Units
NEC Cypress Buyer LLC 13.3 % 13.3 % Units
New Energy Capital Infrastructure Credit Fund LP⁽¹⁾ 18.3 % 22.9 % Units
New Energy Capital Infrastructure Offshore Credit Fund LP⁽¹⁾ 12.2 % 54.9 % Units
Scion G7, LP 28.3 % 28.8 % Units
Tuckerman Capital V LP 48.3 % 47.6 % Units
Tuckerman Capital V Co-Investment I LP 49.5 % 47.7 % Units



	Ownership interest at
Investee	September 30, 2019		December 31, 2018		Instrument Held
BE Reinsurance Limited	25.0	%	25.0	%	Common shares
BioVentures Investors (Offshore) IV LP	73.0	%	73.0	%	Units
Camden Partners Strategic Fund V (Cayman), LP	36.3	%	36.4	%	Units
NEC Cypress Buyer LLC⁽¹⁾	13.3	%	13.3	%	Units
New Energy Capital Infrastructure Credit Fund LP	23.3	%	22.9	%	Units
New Energy Capital Infrastructure Offshore Credit Fund LP	56.2	%	54.9	%	Units
Scion G7, LP	28.8	%	28.8	%	Units
Tuckerman Capital V LP	48.2	%	47.6	%	Units
Tuckerman Capital V Co-Investment I LP	47.7	%	47.7	%	Units

⁽¹⁾The ownership percentage of ~~New Energy Capital Infrastructure Credit Fund LP and New Energy Capital Infrastructure Offshore Credit Fund LP was greater than 20% at December 31, 2018 but was~~NEC Cypress Buyer LLC is less than 20% at ~~June~~September 30, 2019 and December 31, 2018, but is included in the table ~~for comparative purposes.~~

as it is a subsidiary investment within the New Energy Capital Credit Funds, which are equity method eligible.

Note 16. Variable interest entities

Sirius Group consolidates the results of operations and financial position of every voting interest entity ("VOE") in which it has a controlling financial interest and VIEs in which it is considered to be the primary beneficiary. The consolidation assessment, including the determination as to whether an entity qualifies as a VOE or VIE, depends on the facts and circumstances surrounding each entity.

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

~~Unaudited~~

Sirius Group has determined that Alstead Re is a VIE for which Sirius Group is the primary beneficiary and is required to consolidate it. The following table presents Alstead Re's assets and liabilities, as classified in the Consolidated Balance Sheets as at ~~June~~September 30, 2019 and December 31, 2018:




(Millions)		June 30, 2019		December 31, 2018	September 30, 2019			December 31, 2018

Assets:
Fixed maturity investments, trading at fair value	$	3.9	$	4.0	$	3.9		$	4.0
Short-term investments, at fair value		0.5		0.3	0.5			0.3
Cash		0.1		0.2	0.1			0.2

Total investments		4.5		4.5	4.5			4.5
Insurance and reinsurance premiums receivable		0.2		0.1	(0.3		)	0.1
Funds held by ceding companies		4.7		3.7	4.6			3.7
Deferred acquisition costs		0.3		5.2	0.3			5.2
Other assets		-		0.9	0.1			0.9

Total assets	$	9.7	$	14.4	$	9.2		$	14.4



Liabilities
Loss and loss adjustment expense reserves	$	1.7	$	4.6	$	0.8		$	4.6
Unearned insurance and reinsurance premiums		0.7		3.7	0.6			3.7
Other liabilities		-		-	0.1			—

Total liabilities	$	2.4	$	8.3	$	1.5		$	8.3

Sirius Group is a passive investor in certain third-party-managed hedge and private equity funds, some of which are VIEs. Sirius Group is not involved in the design or establishment of these VIEs, nor does it actively participate in the management of the VIEs. The exposure to loss from these investments is limited to the carrying value of the investments at the balance sheet date.

Sirius Group calculates maximum exposure to loss to be (i) the amount invested in the debt or equity of the VIE, (ii) the notional amount of VIE assets or liabilities where Sirius Group has also provided credit protection to the VIE with the VIE as the referenced obligation, and (iii) other commitments and guarantees to the VIE. Sirius Group does not have any VIEs that it sponsors nor any VIEs where it has recourse to it or has provided a guarantee to the VIE interest holders.

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

The following table presents total assets of unconsolidated VIEs in which Sirius Group holds a variable interest, as well as the maximum exposure to loss associated with these VIEs:

Maximum Exposure to Loss

(Millions) Total VIE
Assets On-Balance
Sheet Off-Balance
Sheet Total

June 30, 2019
Other long-term investments⁽¹⁾ $ 266.3 $ 120.2 $ 18.3 $ 138.5

Total at June 30, 2019 $ 266.3 $ 120.2 $ 18.3 $ 138.5

December 31, 2018
Other long-term investments⁽¹⁾ $ 209.1 $ 103.1 $ 32.0 $ 135.1

Total at December 31, 2018 $ 209.1 $ 103.1 $ 32.0 $ 135.1



			Maximum Exposure to Loss
(Millions)	Total VIE Assets		On-Balance Sheet		Off-Balance Sheet		Total
September 30, 2019
Other long-term investments⁽¹⁾	$	278.8	$	114.2	$	17.9	$	132.1
Total at September 30, 2019	$	278.8	$	114.2	$	17.9	$	132.1
December 31, 2018
Other long-term investments⁽¹⁾	$	209.1	$	103.1	$	32.0	$	135.1
Total at December 31, 2018	$	209.1	$	103.1	$	32.0	$	135.1

⁽¹⁾Comprised primarily of hedge funds and private equity funds.

Table of Contents

Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

Note 17. Transactions with related parties

(Re)insurance contracts

In the normal course of business, Sirius Group enters into insurance and reinsurance contracts with certain of its insurance and MGU affiliates, or their subsidiaries. During the three and ~~six~~nine months ended ~~June~~September 30, 2019, these contracts resulted in gross written premiums of ~~$24.9~~$21.7 million and ~~$49.0~~$70.7 million, respectively. During the three and ~~six~~nine months ended ~~June~~September 30, 2018, these contracts resulted in gross written premiums of ~~$18.9~~$14.0 million and ~~$38.2~~$52.2 million, respectively. As at ~~June~~September 30, 2019 and December 31, 2018, Sirius Group had total receivables due from affiliates of ~~$23.2~~$24.1 million and $14.3 million, respectively. As at ~~June~~September 30, 2019 ~~and~~Sirius Group had total payables due to affiliates of $0.4 million. At December 31, 2018, Sirius Group did not have any payables due to affiliates.

Other

Meyer "Sandy" Frucher ("Mr. Frucher") is the Company's Interim Chairman of the board of directors and is also Vice Chairman of Nasdaq, Inc. ("Nasdaq"). The Company is traded on the Nasdaq Global Select Market and has business transactions that are related to its listing on the exchange under the normal course of business. (SeeNote 3.) On October, 21, 2019, Nasdaq announced Mr. Frucher will conclude his tenure as Vice Chairman of Nasdaq and will assume the role of Strategic Advisor, effective January 1, 2020.

Note 18. Commitments and contingencies

Legal Proceedings

Sirius Group, and the insurance and reinsurance industry in general, are routinely subject to claims related litigation and arbitration in the normal course of business, as well as litigation and arbitration that do not arise from, or are directly related to, claims activity. Sirius Group estimates of the costs of settling matters routinely encountered in claims activity are reflected in the reserves for unpaid loss and LAE. (SeeNote 5.)

Sirius Group considers the requirements of ASC 450,Contingencies ("ASC 450"), when evaluating its exposure to non-claims related litigation and arbitration. ASC 450 requires that accruals be established for litigation and arbitration if it is probable that a loss has been incurred and it can be reasonably estimated. ASC 450 also requires that litigation and arbitration be disclosed if it is probable that a loss has been incurred or it there is a reasonable possibility that a loss may have been incurred.

Leases

~~Table of Contents~~

~~Sirius International Insurance Group, Ltd.~~
~~Notes to Consolidated Financial Statements~~
~~Unaudited~~

~~Leases~~

Sirius Group leases office space and equipment under various ~~noncancellable~~noncancelable operating lease agreements. The average life of the office leases is 7 years and the equipment leases is 3 years.

During the three and ~~six~~nine months ended ~~June~~September 30, 2019, Sirius Group recognized operating lease expense of ~~$3.2~~$3.4 million and ~~$5.8~~$9.3 million, respectively, including property taxes and routine maintenance expense as well as rental expenses related to short term leases. As at ~~June~~September 30, 2019, Sirius Group had ~~$31.5~~$28.8 million operating lease right-of-use assets included in Other assets. As at ~~June~~September 30, 2019, Sirius Group had ~~$33.5~~$30.7 million operating lease liability included in Other liabilities.

The following table presents the lease balances within the Consolidated Balance Sheets as at ~~June~~September 30, 2019:



(millions)
~~(millions)~~	Balance Sheet Classification		~~June~~September 30, 2019

Operating lease right-of-use assets	Other assets	$~~31.5~~28.8
Current lease liabilities	Other liabilities	$~~8.9~~8.5
Non-current lease liabilities	Other liabilities	$~~24.6~~
22.2

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Sirius International Insurance Group, Ltd.

Notes to Consolidated Financial Statements

Unaudited

The following table presents weighted average remaining lease term and weighted average discount rate as at ~~June~~September 30, 2019:




Weighted average lease term (years) as at ~~June~~September 30, ~~2019:~~	2019
Leased offices	7 years	~~7.0 years~~
Leased equipment	3 years	~~3.0 years~~
Weighted average discount rate:
Leased offices	3.7	~~3.7%~~%
Leased equipment	3.4	~~3.4%~~


		%

The following table presents future annual minimum rental payments required under non-cancellable leases and the present value discount to arrive at total lease liability as at ~~June~~September 30, 2019:

(Millions) Future Payments

2019 $ 5.0
2020 9.2
2021 7.9
2022 7.0
2023 4.3
2024 and after 2.8

Total future annual minimum rental payments as at June 30, 2019 36.2
Less: present value discount (2.7 )

Total lease liability as at June 30, 2019 $ 33.5



(Millions)	Future Payments
2019	$	2.5
2020	9.0
2021	7.8
2022	6.9
2023	4.3
2024 and after	2.8
Total future annual minimum rental payments as at September 30, 2019	33.3
Less: present value discount	(2.6		)
Total lease liability as at September 30, 2019	$	30.7

As of ~~June~~September 30, 2019, the Company's future operating lease obligations that have not yet commenced are immaterial.

~~Table of Contents~~

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is management's discussion and analysis ("MD&A") of the Company's unaudited consolidated results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 and the Company's consolidated financial condition, liquidity and capital resources as of ~~June~~September 30, 2019 and December 31, 2018. This discussion and analysis should be read in conjunction with our historical consolidated financial statements and the related notes appearing in our Annual Report on Form 10-K for the year ended December 31, 2018 (our "2018 Annual Report"), filed with the Securities and Exchange Commission ("SEC") on March 14, 2019, and the Company's Unaudited Consolidated Financial Statements and related notes included elsewhere in this Quarterly Report on Form 10-Q. The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP").

The following MD&A includes forward-looking statements, which are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed or implied by our forward-looking statements. See "Cautionary Note Regarding Forward-Looking Statements".

INDEX TO MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Sirius Group is a Bermuda exempted company whose principal businesses are conducted through its insurance and reinsurance subsidiaries and other affiliates. Sirius Group's subsidiaries, including Sirius Bermuda Insurance Company Ltd. ("Sirius Bermuda"), Sirius International Insurance Corporation ("Sirius International"), Sirius America Insurance Company ("Sirius America") and Lloyd's Syndicate 1945 ("Syndicate 1945"), provide insurance, reinsurance and insurance services on a worldwide basis. Sirius Group writes treaty and facultative reinsurance, as well as primary insurance. In recent years, Sirius Group expanded its accident and health primary business capabilities in the U.S. via the acquisitions of International Medical Group Acquisition, Inc. ("IMG") and ArmadaCorp Capital, LLC ("Armada") in 2017. In addition to growing in accident and health insurance, Sirius Group further expanded its primary insurance platform launching its primary Surety and Environmental insurance platforms in the U.S. in late 2017. In mid-2018, Sirius Group began writing primary Casualty insurance through Pie Insurance Holdings, Inc. ("Pie Insurance"), a start-up specializing in a data driven approach to workers compensation insurance. Sirius Group also has a minority investment in Pie Insurance and carrier relationship. In addition to these primary insurance platforms, Sirius Group re-entered the U.S. Casualty reinsurance market in early 2017.

~~Table of Contents~~

Reportable Segments

Sirius Group provides insurance and reinsurance products for property lines and agriculture ("Global Property"), accident and health ("Global A&H"), and specialty lines including Aviation & Space, Marine, Trade Credit, Contingency, Casualty, Surety, and Environmental ("Specialty & Casualty"), which together with Runoff & Other, constitute its four reportable segments.

•

Global Property—The Global Property segment consists of Sirius Group's underwriting lines of business that offer other property insurance and reinsurance, property catastrophe excess reinsurance and agriculture reinsurance on a worldwide basis.

•

Global A&H—The Global A&H segment consists of Sirius Group's Global A&H insurance and reinsurance underwriting unit along with two managing general underwriters ("MGUs") (IMG and Armada). As part of Global A&H, Sirius Group provides supplemental healthcare and medical travel insurance products as well as related administration services through its MGU subsidiaries.

•

Specialty & Casualty—The Specialty & Casualty segment offers insurance and reinsurance specialty & casualty product lines on a worldwide basis. Specialty lines represent unique risks where the more difficult and unusual risks are underwritten. Because specialty lines tend to be the more unusual or high risks, much of the market is characterized by a higher degree of specialization. Specialty & Casualty consists of Aviation & Space, Marine, Trade Credit, Contingency, Casualty, Surety, and Environmental specialty lines.

•

Runoff & Other—The Runoff & Other segment includes the results of Sirius Global Solutions Holding Company ("Sirius Global Solutions"), which specializes in the acquisition and management of runoff liabilities for insurance and reinsurance companies, both in the U.S. and internationally, as well as asbestos risks, environmental risks and other long-tailed liability exposures.

Executive Summary

Three Months Ended ~~June~~September 30, 2019 and 2018

Sirius Group ended the ~~second~~third quarter of 2019 with net ~~income~~(loss) attributable to common shareholders of ~~$7 million~~$(3) million. Basic earnings per share was $(0.02) and ~~basic~~diluted earnings per common share of ~~$0.05.~~$(0.06). This compares to net ~~income~~(loss) attributable to common shareholders of ~~$98~~$(28) million and basic and diluted earnings per common share of ~~$0.78~~$(0.23) for the ~~second~~third quarter of 2018. The ~~decrease~~increase was primarily due to ahigher net ~~underwriting (loss) recorded for the second quarter of 2019 driven mainly~~realized and unrealized investment gains, partially offset by higher catastrophe losses and net unfavorable prior year loss reserve development. During the three months ended September 30, 2019, Sirius Group recorded catastrophe losses, net of reinsurance and reinstatement premiums, of $109 million compared to $77 million for the three months ended September 30, 2018. Catastrophe losses, net of reinsurance and reinstatement premiums, for the three months ended September 30, 2019 included $52 million for Typhoon Faxai and $44 million for Hurricane Dorian whereas catastrophe losses, net of reinsurance and reinstatement premiums, for the three months ended September 30, 2018 included $48 million for Typhoon Jebi, $9 million for Hurricane Florence, and $7 million for the Kerala Floods. Our Faxai loss estimate implies an industry loss of around $9 billion and our Dorian loss estimate is consistent with an industry loss of $8.5 billion. The three months ended ~~June~~September 30, 2019 included ~~$64~~$6 million of net unfavorable prior year loss reserve development compared to $10 million of net favorable prior year loss reserve development for the three months ended ~~June~~September 30, 2018. ~~During the three months ended June 30, 2019,~~

Sirius ~~Group recorded catastrophe losses of $8 million compared to $1 million~~Group's combined ratio was 123% for the three months ended ~~June~~September 30, ~~2018.~~

~~Sirius Group's combined ratio was 105%~~2019 compared to 111% for the three months ended ~~June 30, 2019 compared to 83% for the three months ended June~~September 30, 2018. The increase in the combined ratio from the prior period was driven primarily by higher catastrophe losses, higher current accident year losses, and net unfavorable prior year loss reserve development. Sirius Group's combined ratio included 29 points of catastrophe losses for the three months ended September 30, 2019 compared to 24 points for the three months ended September 30, 2018. The combined ratio for the three months ended ~~June~~September 30, 2019 was impacted by 172 points of net unfavorable prior year loss reserve development compared to 3 points of net favorable prior year loss reserve development for the three months ended ~~June~~September 30, 2018. ~~Sirius Group's combined ratio included 2 points of catastrophe losses for the three months ended June 30, 2019 compared to less than 1 point for the three months ended June 30, 2018.~~

~~Table of Contents~~

~~Six~~

Nine Months Ended ~~June~~September 30, 2019 and 2018

Sirius Group ended the first ~~six~~nine months of 2019 with net income attributable to common shareholders of ~~$102~~$99 million and basic and diluted earnings per common share of ~~$0.80.~~$0.78. This compares to net income attributable to common shareholders of ~~$138~~$110 million and basic and diluted earnings per common share of ~~$1.11~~$0.88 for the ~~six~~nine months ended ~~June~~September 30, 2018. The decrease was primarily due to net unfavorable prior year loss reserve development and higher catastrophe losses, partially offset by higher net realized and unrealized investment gains. The ~~six~~nine months ended ~~June~~September 30, 2019 included ~~$81~~$87 million of net unfavorable prior year loss reserve development compared to ~~$13~~$23 million of net favorable prior year loss reserve development for the ~~six~~nine months ended ~~June~~September 30, 2018. During the ~~six~~nine months ended ~~June~~September 30, 2019, Sirius Group recorded catastrophe losses, net of ~~$10~~reinsurance and reinstatement premiums, of $119 million compared to $3$80 million for the ~~six~~nine months ended ~~June~~September 30, 2018.

Sirius Group's combined ratio was ~~99%~~107% for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to ~~85%~~94% for the ~~six~~nine months ended ~~June~~September 30, 2018. The increase in the combined ratio was driven primarily by net unfavorable prior year loss reserve ~~development.~~development, higher catastrophe losses, and higher current accident year losses in the Specialty & Casualty segment. The combined ratio for the ~~six~~nine months ended ~~June~~September 30, 2019 was impacted by 128 points of net unfavorable prior year loss reserve development compared to 23 points of net favorable prior year loss reserve development for the ~~six~~nine months ended ~~June~~September 30, 2018. Sirius Group's combined ratio included ~~1 point~~11 points of catastrophe losses for ~~each of~~ the ~~six~~nine months ended ~~June~~September 30, 2019 ~~and~~compared to 9 points for the nine months ended September 30, 2018.

Book Value Per Common Share

Sirius Group ended the first ~~six~~nine months of 2019 with book value per common share of ~~$15.47~~$15.11 compared to $14.80 as of December 31, 2018, an increase of ~~4.5%~~2.1% due to comprehensive income of ~~$84~~$34 million recognized for the ~~six~~nine months ended ~~June~~September 30, 2019. Total common shareholders' equity at the end of the ~~second~~third quarter of 2019 was ~~$1,784~~$1,743 million compared to $1,704 million as of December 31, 2018.

Return onOn Equity

~~The return on net~~

Return On Equity ("ROE"), calculated by dividing Net (loss) income attributable to Sirius Group's common shareholders onfor the period by beginning common shareholders' equity, was ~~0.4%~~(0.2)% for the three months ended ~~June~~September 30, 2019 compared to ~~5.0%~~(1.4)% for the three months ended ~~June~~September 30, 2018 due to a lower net ~~income~~(loss) recognized.

~~The return on net income attributable to common shareholders on beginning common shareholders' equity~~

ROE was ~~6.0%~~5.8% for each of the ~~six~~nine months ended ~~June~~September 30, 2019 ~~compared to 7.2% for the six months ended June 30, 2018 due to lower net income recognized.~~

and 2018.

Adjusted Book Value Per Share

Sirius Group ended the first ~~six~~nine months of 2019 with Adjusted book value per share, which assumes that the Series B preference shares will convert into common shares on a one-for-one basis, and also incorporates the impact of dilution arising from share-based compensation programs, of ~~$15.87~~$15.47 compared to $15.24 as of December 31, 2018, an increase of ~~4.1%,~~1.5% due to the comprehensive income recognized. For ~~June~~the nine months ended September 30, 2019, Adjusted book value and Adjusted book value per share include the earned effects of share-based compensation awards issued during 2019.

See "Non-GAAP Financial Measures" for an explanation and calculation of Adjusted book value and Adjusted book value per share.

Adjusted Tangible Book Value Per Share

Sirius Group ended the first nine months of 2019 with Adjusted tangible book value per share, which is derived by subtracting Goodwill, Intangible assets, and Net deferred tax liability on intangible assets from Adjusted book value, and also incorporates the impact of dilution arising from share-based compensation programs, of $11.10 compared to $10.76 as of December 31, 2018, an increase of 3.2% due to the comprehensive income recognized.

See "Non-GAAP Financial Measures" for an explanation and calculation of Adjusted tangible book value and Adjusted tangible book value per share.

Operating (loss) income attributable to common shareholders

For the three months ended ~~June~~September 30, 2019, Operating (loss) attributable to common shareholders was $(65) million compared to $(21) million for the three months ended September 30, 2018, primarily due to a higher net underwriting (loss) recognized in the third quarter of 2019.

For the nine months ended September 30, 2019, Operating (loss) income attributable to common shareholders was ~~$(19)~~$(66) million compared to ~~$41~~$50 million for the ~~three~~nine months ended ~~June~~September 30, 2018, primarily due to the net underwriting (loss) ~~recorded in~~recognized for the ~~second quarter of 2019.~~

~~For the six~~nine months ended ~~June~~September 30, 2019, Operating (loss) income attributable to common shareholders was $(1) million compared to $71 million for the six months ended June 30, 2018, primarily due to lower net underwriting gains and a loss on the change in fair value of weather derivatives.

2019.

See "Non-GAAP Financial Measures" for an explanation and calculation of Operating (loss) income attributable to common shareholders.

~~Table of Contents~~

Consolidated Results of Operations – Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2019 and 2018

(Expressed in millions of U.S. dollars, except ratios, share and per share information)

Three months ended
June 30, Six months ended
June 30,

2019 2018 2019 2018

Revenues
Gross written premiums
$ 487.1 $ 505.0 $ 1,109.4 $ 1,120.2

Net written premiums
$ 401.7 $ 320.3 $ 886.5 $ 789.7

Net earned insurance and reinsurance premiums
$ 370.7 $ 308.9 $ 682.6 $ 593.4
Net investment income
24.4 19.2 44.5 30.0
Net realized investment gains
15.6 7.8 24.6 4.1
Net unrealized investment gains
15.5 24.7 89.5 40.7
Net foreign exchange (losses) gains
(0.6 ) 25.6 4.5 22.1
Other revenue
15.4 55.6 35.0 79.0

Total revenues
441.0 441.8 880.7 769.3

Expenses
Loss and loss adjustment expenses ("LAE")
278.0 151.4 461.9 292.4
Insurance and reinsurance acquisition expenses
77.0 66.8 140.3 129.8
Other underwriting expenses
35.5 38.2 70.8 81.4
General and administrative expenses
28.2 24.2 52.6 38.5
Intangible asset amortization expenses
4.0 4.0 7.9 7.9
Interest expense on debt
8.0 7.8 15.6 15.5

Total expenses
430.7 292.4 749.1 565.5

Pre-tax income 10.3 149.4 131.6 203.8
Income tax expense
(2.1 ) (51.2 ) (19.3 ) (62.3 )

Net income 8.2 98.2 112.3 141.5
Income attributable to non-controlling interests
(0.8 ) (0.4 ) (1.2 ) (0.6 )

Net income attributable to Sirius Group 7.4 97.8 111.1 140.9

Change in carrying value of Series B preference shares
(0.8 ) - (9.2 ) -
Accrued dividends on Series A redeemable preference shares
- - - (2.6 )
Net income attributable to Sirius Group's common shareholders $ 6.6 $ 97.8 101.9 $ 138.3
��

Comprehensive income
Net income $ 8.2 $ 98.2 $ 112.3 $ 141.5
Other comprehensive income (loss), net of tax
Change in foreign currency translation, net of tax 1.1 (48.5 ) (26.7 ) (61.9 )

Total other comprehensive income (loss) 1.1 (48.5 ) (26.7 ) (61.9 )

Comprehensive income 9.3 49.7 85.6 79.6
Income attributable to non-controlling interests (0.8 ) (0.4 ) (1.2 ) (0.6 )

Comprehensive income attributable to Sirius Group $ 8.5 $ 49.3 $ 84.4 $ 79.0

Ratios:
Loss ratio⁽¹⁾ 75.0 % 49.0 % 67.7 % 49.3 %
Acquisition expense ratio⁽²⁾ 20.8 % 21.6 % 20.6 % 21.9 %
Other underwriting expense ratio⁽³⁾ 9.6 % 12.4 % 10.4 % 13.7 %

Combined ratio⁽⁴⁾
105.4 % 83.0 % 98.7 % 84.9 %

Selected financial data:
Basic earnings per common share and common shares equivalent $ 0.05 $ 0.78 $ 0.80 $ 1.11
Diluted earnings per common share and common shares equivalent $ 0.05 $ 0.78 $ 0.80 $ 1.11
Basic weighted average number of common shares and common share equivalents outstanding 115,243,685 120,000,000 115,212,772 120,000,000
Diluted weighted average number of common shares and common share equivalents outstanding 115,796,367 120,000,000 127,542,402 120,000,000
Return on equity⁽⁵⁾ 0.4 % 5.0 % 6.0 % 7.2 %
Operating (loss) income attributable to common shareholders⁽⁶⁾ $ (19.4 ) $ 40.5 $ (0.5 ) $ 71.4



	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Revenues
Gross written premiums	$	413.7		$	398.0		$	1,523.1		$	1,518.2
Net written premiums	$	322.3		$	305.7		$	1,208.8		$	1,095.4
Net earned insurance and reinsurance premiums	$	374.2		$	321.1		$	1,056.8		$	914.5
Net investment income	22.8			21.8			67.3			51.8
Net realized investment gains	15.3			3.9			39.9			8.0
Net unrealized investment gains (losses)	53.9			(11.7		)	143.4			29.0
Net foreign exchange gains (losses)	4.9			(0.4		)	9.4			21.7
Other revenue	16.3			17.0			51.3			96.0
Total revenues	487.4			351.7			1,368.1			1,121.0
Expenses
Loss and loss adjustment expenses ("LAE")	348.6			260.4			810.5			552.8
Insurance and reinsurance acquisition expenses	75.1			59.2			215.4			189.0
Other underwriting expenses	35.4			35.7			106.2			117.1
General and administrative expenses	28.0			19.5			80.6			58.0
Intangible asset amortization expenses	3.9			3.9			11.8			11.8
Interest expense on debt	7.7			7.6			23.3			23.1
Total expenses	498.7			386.3			1,247.8			951.8
Pre-tax (loss) income	(11.3		)	(34.6		)	120.3			169.2
Income tax benefit (expense)	3.7			6.9			(15.6		)	(55.4		)
Net (loss) income	(7.6		)	(27.7		)	104.7			113.8
Income attributable to non-controlling interests	(0.4		)	(0.3		)	(1.6		)	(0.9		)
Net (loss) income attributable to Sirius Group	(8.0		)	(28.0		)	103.1			112.9
Change in carrying value of Series B preference shares	5.3			—			(3.9		)	—
Accrued dividends on Series A redeemable preference shares	—			—			—			(2.6		)
Net (loss) income attributable to Sirius Group's common shareholders	$	(2.7	)	$	(28.0	)	$	99.2		$	110.3
Comprehensive (loss) income
Net (loss) income	$	(7.6	)	$	(27.7	)	$	104.7		$	113.8
Other comprehensive (loss) income, net of tax
Change in foreign currency translation, net of tax	(42.3		)	4.7			(69.0		)	(57.2		)
Total other comprehensive (loss) income	(42.3		)	4.7			(69.0		)	(57.2		)
Comprehensive (loss) income	(49.9		)	(23.0		)	35.7			56.6
Income attributable to non-controlling interests	(0.4		)	(0.3		)	(1.6		)	(0.9		)
Comprehensive (loss) income attributable to Sirius Group	$	(50.3	)	$	(23.3	)	$	34.1		$	55.7
Ratios:
Loss ratio⁽¹⁾	93.2		%	81.1		%	76.7		%	60.4		%
Acquisition expense ratio⁽²⁾	20.1		%	18.4		%	20.4		%	20.7		%
Other underwriting expense ratio⁽³⁾	9.5		%	11.1		%	10.0		%	12.8		%
Combined ratio⁽⁴⁾	122.8		%	110.6		%	107.1		%	93.9		%
Selected financial data:
Basic earnings per common share and common shares equivalent	$	(0.02	)	$	(0.23	)	$	0.78		$	0.88
Diluted earnings per common share and common shares equivalent	$	(0.06	)	$	(0.23	)	$	0.78		$	0.88
Basic weighted average number of common shares and common share equivalents outstanding	115,251,853			120,000,000			115,225,942			120,000,000
Diluted weighted average number of common shares and common share equivalents outstanding	127,153,523			120,000,000			115,619,222			120,000,000
Return on equity⁽⁵⁾	(0.2		)%	(1.4		)%	5.8		%	5.8		%
Operating (loss) income attributable to common shareholders⁽⁶⁾	$	(65.4	)	$	(21.4	)	$	(65.9	)	$	50.0

⁽¹⁾The loss ratio is calculated by dividing loss and LAE expenses by net earned insurance and reinsurance premiums.

~~Table of Contents~~

⁽²⁾The acquisition expense ratio is calculated by dividing insurance and reinsurance acquisition expenses by net earned insurance and reinsurance premiums.

⁽³⁾The other underwriting expense ratio is calculated by dividing other underwriting expenses by net earned insurance and reinsurance premiums.

⁽⁴⁾The combined ratio is calculated by combining the loss ratio, the acquisition expense ratio, and the other underwriting expense ratio.

⁽⁵⁾Return on equity is calculated by dividing ~~net~~Net (loss) income attributable to Sirius Group's common shareholders for the period by ~~the~~ beginning common shareholders' equity.

⁽⁶⁾Operating (loss) income attributable to common shareholders is a non-GAAP financial measure. See "Non-GAAP Financial Measures" for an explanation and calculation of Operating (loss) income attributable to common shareholders.

As of
June 30, 2019 As of
December 31, 2018

Selected balance sheet data:
Common shares outstanding 115,296,918 115,151,251
Series B preference shares outstanding 11,901,670 11,901,670
Earned share-based compensation awards, excluding stock options 374,912 -
Earned portion of Stock option awards issued 152,772 -

Adjusted shares outstanding⁽¹⁾ 127,726,272 127,052,921

Total common shareholders' equity

$
  1,784.1

$
  1,704.5

Series B preference shares 241.3 232.2
Earned portion of future proceeds from stock option awards 1.9 -

Adjusted book value⁽¹⁾ $   2,027.3 $   1,936.7

Book value per common share

$
  15.47

$
  14.80

Adjusted book value per share⁽¹⁾ $   15.87 $   15.24



	As of September 30, 2019		As of December 31, 2018
Selected balance sheet data:
Book value per common share ⁽¹⁾	$	15.11	$	14.80
Adjusted book value per share ⁽²⁾	$	15.47	$	15.24
Adjusted tangible book value per share ⁽²⁾	$	11.10	$	10.76

⁽¹⁾~~Adjusted~~Book value per common share is calculated by dividing Total common shareholders' equity by the total number of Common shares ~~outstanding,~~ outstanding.

⁽²⁾Adjusted book value per share and Adjusted tangible book value per share are non-GAAP financial measures. See "Non-GAAP Financial Measures" for an explanation and calculation of Adjusted ~~share outstanding, Adjusted~~ book value per share and Adjusted tangible book value per share.

Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2019 and 2018

Gross written premiums – Gross written premiums for the three months ended ~~June~~September 30, 2019 ~~was $487~~were $414 million, ~~a decrease~~an increase of ~~$18~~$16 million or 4% compared to gross written premiums of ~~$505~~$398 million for the three months ended ~~June~~September 30, 2018, with Specialty & Casualty up ~~59%~~57%, Global A&H up ~~37%~~17%, and Global Property down ~~27%~~25%. Absent the effect of a single fronting arrangement within the Global Property segment, gross written premiums increased ~~20%~~9% compared to the prior period. See "Results of Reportable Segments" below.

Gross written premiums for the ~~six~~nine months ended ~~June~~September 30, 2019 ~~was $1,109~~were $1,523 million, ~~a decrease~~an increase of ~~$11~~$5 million or 1%0.3% compared to gross written premiums of ~~$1,120~~$1,518 million for the ~~six~~nine months ended ~~June~~September 30, 2018, with ~~Global A&H up 25%,~~ Specialty & Casualty up ~~24%~~34%, Global A&H up 23%, and Global Property down ~~16%~~18%. Absent the effect of a single fronting arrangement within the Global Property segment, gross written premiums increased 7% compared to the prior period. See "Results of Reportable Segments" below.

Net written premiums – Net written premiums for the three months ended ~~June~~September 30, 2019 ~~was $402~~were $322 million, an increase of ~~$82~~$16 million or ~~26%~~5% compared to net written premiums of ~~$320~~$306 million for the three months ended ~~June~~September 30, 2018, with Specialty & Casualty up ~~62%~~55%, Global A&H up ~~46%~~19%, and Global Property ~~up 8%~~down 28%. See "Results of Reportable Segments" below.

Net written premiums for the ~~six~~nine months ended ~~June~~September 30, 2019 ~~was $887~~were $1,209 million, an increase of ~~$97~~$114 million or ~~12%~~10% compared to net written premiums of ~~$790~~$1,095 million for the ~~six~~nine months ended ~~June~~September 30, 2018, with ~~Global A&H up 29%,~~ Specialty & Casualty up 36% Global A&H up 26%, and Global Property ~~up 2%~~down 6%. See "Results of Reportable Segments" below.

~~Table of Contents~~

Net earned insurance and reinsurance premiums – Net earned insurance and reinsurance premiums for the three months ended ~~June~~September 30, 2019 ~~was $371~~were $374 million, an increase of ~~$62~~$53 million or ~~20%~~17% compared to net earned premiums of ~~$309~~$321 million for the three months ended ~~June~~September 30, 2018, with Specialty & Casualty up ~~55%~~71%, Global A&H up ~~47%~~28% and Global Property down 2%8%. See "Results of Reportable Segments" below.

Net earned insurance and reinsurance premiums for the ~~six~~nine months ended ~~June~~September 30, 2019 ~~was $683~~were $1,057 million, an increase of ~~$90~~$142 million or ~~15%~~16% compared to net earned premiums of ~~$593~~$915 million for the ~~six~~nine months ended ~~June~~September 30, 2018, with Specialty & Casualty up ~~48% and~~56%, Global A&H up ~~27%~~28%, and Global Property down 3%. See "Results of Reportable Segments" below.

Net investment income, Net realized investment gains, Net unrealized investment gains (losses) and Net foreign exchange gains (losses) ~~gains~~ – Net investment income increased ~~26%~~5% to ~~$24~~$23 million for the three months ended ~~June~~September 30, 2019 from ~~$19~~$22 million for the three months ended ~~June~~September 30, 2018. Sirius Group reported net realized investment gains of $15 million for the three months ended September 30, 2019, which included $14 million of net realized foreign currency gains, compared to net realized investment gains of $4 million for the three months ended September 30, 2018, which included $5 million of net realized foreign currency gains. Net unrealized investment gains were $54 million for the three months ended September 30, 2019, which included $34 million of net unrealized foreign currency gains, compared to net unrealized investment (losses) of $(12) million for the three months ended September 30, 2018, which included $(6) million of net unrealized foreign currency losses. See "Summary of Investment Results" below. Additionally, Sirius Group recorded $5 million of non-investment related foreign exchange gains for the three months ended September 30, 2019 compared to less than $(1) million of non-investment related foreign exchange (losses) for the three months ended September 30, 2018. Included in the amount for the three months ended September 30, 2019 is $16 million of favorable currency movement compared to $(2) million of unfavorable currency movement for the three months ended September 30, 2018 on the 2017 SEK Subordinated Notes. See "Foreign Currency Translation" below.

Net investment income increased 29% to $67 million for the nine months ended September 30, 2019 from $52 million for the nine months ended September 30, 2018 due primarily to a higher interest rate environment. Sirius Group reported net realized investment gains of ~~$16~~$40 million for the ~~three~~nine months ended ~~June~~September 30, 2019, which included ~~$10~~$35 million of net realized foreign currency gains, compared to net realized investment gains of $8 million for the ~~three~~nine months ended ~~June~~September 30, 2018, which included $7$11 million of net realized foreign currency gains. Net unrealized investment gains were ~~$16~~$143 million for the ~~three~~nine months ended ~~June~~September 30, 2019, which included $(7) million of net unrealized foreign currency (losses), compared to net unrealized investment gains of $25 million for the three months ended June 30, 2018, which included $30 million of net unrealized foreign currency gains. See "~~Summary of Investment Results"~~ below. Additionally, Sirius Group recorded $(1) million of non-investment related foreign exchange (losses) for the three months ended June 30, 2019 compared to $26 million of non-investment related foreign exchange gains for the three months ended June 30, 2018. Included in the amount for the three months ended June 30, 2019 is less than $1 million of favorable currency movement compared to $28 million of favorable currency movement for the three months ended June 30, 2018 on the 2017 SEK Subordinated Notes. See "~~Foreign Currency Translation~~~~" below.~~

Net investment income increased 50% to $45 million for the six months ended June 30, 2019 from $30 million for the six months ended June 30, 2018 due primarily to a higher interest rate environment. Sirius Group reported net realized investment gains of $25 million for the six months ended June 30, 2019, which included $21 million of net realized foreign currency gains, compared to net realized investment gains of $4 million for the six months ended June 30, 2018, which included $6 million of net realized foreign currency gains. Net unrealized investment gains were $90 million for the six months ended June 30, 2019, which included $18$52 million of net unrealized foreign currency gains, compared to net unrealized investment gains of ~~$41~~$29 million for the ~~six~~nine months ended ~~June~~September 30, 2018, which included ~~$49~~$43 million of net unrealized foreign currency gains. See"Summary of Investment Results" below. Additionally, Sirius Group recorded $5$9 million of non-investment related foreign exchange gains for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to $22 million of non-investment related foreign exchange gains for the ~~six~~nine months ended ~~June~~September 30, 2018. Included in the ~~six~~nine months ended ~~June~~September 30, 2019 amount is ~~$11~~$27 million of favorable currency movement compared to ~~$28~~$26 million of favorable foreign currency movement for the ~~six~~nine months ended ~~June~~September 30, 2018 on the 2017 SEK Subordinated Notes. See "Foreign Currency Translation" below.

Other revenue – Other revenue decreased to ~~$15~~$16 million for the three months ended ~~June~~September 30, 2019 from ~~$56~~$17 million for the three months ended ~~June~~September 30, 2018.

Other revenue decreased to $51 million for the nine months ended September 30, 2019 from $96 million for the nine months ended September 30, 2018. The decrease in other revenue was primarily attributable to management's estimate of a right of indemnification against a third party in connection with an uncertain tax position that was recorded in other revenue in the second quarter of 2018.

Other revenue decreased to $35 million for the six months ended June 30, 2019 from $79 million for the six months ended June 30, 2018. The decrease in other revenue was primarily attributable to management's estimate of a right of indemnification against a third party in connection with an uncertain tax position that was recorded in other revenue in the second quarter of 2018.

Loss and loss adjustment expenses – Loss and loss adjustment expenses increased ~~84%~~34% to ~~$278~~$349 million for the three months ended ~~June~~September 30, 2019 from ~~$151~~$260 million for the three months ended ~~June~~September 30, 2018 primarily due to higher catastrophe losses, net unfavorable prior year loss reserve development, and increased net earned insurance and reinsurance premiums for the three months ended September 30, 2019. See "Results of Reportable Segments" below.

Loss and loss adjustment expenses increased 47% to $811 million for the nine months ended September 30, 2019 from $553 million for the nine months ended September 30, 2018 primarily due to net unfavorable prior year loss reserve development, higher catastrophe losses, and increased net earned insurance and reinsurance premiums for the ~~three~~nine months ended ~~June~~September 30, 2019. See "Results of Reportable Segments" below.

~~Table of Contents~~

Loss and loss adjustment expenses increased 58% to $462 million for the six months ended June 30, 2019 from $292 million for the six months ended June 30, 2018, primarily due to net unfavorable prior year loss reserve development, higher catastrophe losses, and increased net earned insurance and reinsurance premiums for the six months ended June 30, 2019. See "~~Results of Reportable Segments~~~~" below.~~

Insurance and reinsurance acquisition expenses – Insurance and reinsurance acquisition expenses increased ~~15%~~27% to ~~$77~~$75 million for the three months ended ~~June~~September 30, 2019 from ~~$67~~$59 million for the three months ended ~~June~~September 30, 2018 primarily due to an increase in net earned insurance and reinsurance premiums for Specialty & Casualty and Global A&H for the three months ended September 30, 2019. See "Results of Reportable Segments" below.

Insurance and reinsurance acquisition expenses increased 14% to $215 million for the nine months ended September 30, 2019 from $189 million for the nine months ended September 30, 2018 primarily due to an increase in net earned insurance and reinsurance premiums and higher acquisition expenses for Specialty & Casualty and Global A&H partially offset by lower acquisition expenses for Global Property, primarily due to business mix, for the ~~three~~nine months ended ~~June~~September 30, 2019. See "Results of Reportable Segments" below.

Insurance and reinsurance acquisition expenses increased 8% to $140 million for the six months ended June 30, 2019 from $130 million for the six months ended June 30, 2018, due to an increase in net earned insurance and reinsurance premiums and higher acquisition expenses for Specialty & Casualty and Global A&H partially offset by lower acquisition expenses for Global Property, primarily due to business mix, for the six months ended June 30, 2019. See "~~Results of Reportable Segments~~~~" below.~~

Other underwriting expenses – Other underwriting expenses decreased 5%3% to $35 million for the three months ended September 30, 2019 from $36 million for the three months ended ~~June 30, 2019 from $38 million for the three months ended June~~September 30, 2018. See "Results of Reportable Segments" below.

Other underwriting expenses decreased ~~12%~~9% to ~~$71~~$106 million for the ~~six~~nine months ended ~~June~~September 30, 2019 from ~~$81~~$117 million for the ~~six~~nine months ended ~~June~~September 30, 2018 primarily due to lower variable incentive compensation expense. In addition, higher operating expenses were included in other underwriting expense for the MGUs for the six months ended June 30, 2018, representing costs associated with the support of the Global A&H underwriting team. See "Results of Reportable Segments" below.

General and administrative expenses – General and administrative expenses increased ~~17%~~40% to $28 million for the three months ended ~~June~~September 30, 2019 from ~~$24~~$20 million for the three months ended ~~June~~September 30, 2018 primarily due to an increase in professional fees.

General and administrative expenses increased 40% to $81 million for the nine months ended September 30, 2019 from $58 million for the nine months ended September 30, 2018 primarily due to an increase in expenses related to IMG and professional fees.

General and administrative expenses increased 36% to $53 million for the six months ended June 30, 2019 from $39 million for the six months ended June 30, 2018, primarily due to an increase in expenses related to IMG and professional fees.

Summary of Investment Results

Pre-Tax Return on Investments

Total return on investments includes investment income, net realized gains and losses and the change in unrealized gains and losses generated by the investment portfolio including equity method investments for which we have made fair value election and net income or loss in investments in unconsolidated affiliates. Total return is calculated on a pre-tax basis and includes the impact of investment related foreign exchange gains or losses whether reflected in pre-tax income or other comprehensive income, unless otherwise noted. Returns are calculated on average investments for the period displayed and presented gross of separately managed account fees as well as internal expenses in order to produce a better comparison to benchmark returns which exclude an expense load.

Sirius Group maintains an equity portfolio that consists of equity securities and other long-term investments, including hedge funds, private equity funds and direct investments in privately held common equity securities investments. From time to time, Sirius may also invest in exchange-traded funds ("ETFs") and mutual funds. For return purposes, investments in fixed-income ETFs and mutual funds are included in the fixed income results and excluded from equity portfolio results. Returns exclude the impact of third-party currency forwards and/or swaps.

~~Table of Contents~~

A summary of Sirius Group's total pre-tax net investment results and performance metrics for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018, respectively, follows:

For the Three Months Ended
June 30, For the Six Months Ended
June 30,

(Millions) 2019 2018 2019 2018

Pre-tax investment results
Net investment income $ 24.4 $ 19.2 $ 44.5 $ 30.0
Net realized and unrealized investment gains⁽¹⁾ 31.1 43.8 114.1 58.5
Change in foreign currency translation on investments recognized through other comprehensive income⁽²⁾ (0.1 ) (78.1 ) (41.8 ) (99.0 )

Net pre-tax investment gains (losses) $ 55.4 $ (15.1 ) $ 116.8 $ (10.5 )



	Three months ended September 30,						Nine months ended September 30,
(Millions)	2019			2018			2019			2018
Pre-tax investment results
Net investment income	$	22.8		$	21.8		$	67.3		$	51.8
Net realized and unrealized investment gains (losses) ⁽¹⁾	69.2			(11.5		)	183.3			47.0
Change in foreign currency translation on investments recognized through other comprehensive income⁽²⁾	(67.8		)	6.4			(109.6		)	(92.6		)
Net pre-tax investment gains	$	24.2		$	16.7		$	141.0		$	6.2

⁽¹⁾Includes foreign exchange gains (losses) for the three months ended ~~June~~September 30, 2019 and 2018 of ~~$2.4~~$47.9 million and ~~$48.2~~$(4.5) million, respectively, and for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 of ~~$38.3~~$86.2 million and ~~$68.3~~$63.8 million, respectively.

⁽²⁾Excludes non-investment related foreign exchange gains (losses) ~~gains~~ for the three months ended ~~June~~September 30, 2019 and 2018 of ~~$(0.6)~~$4.9 million and ~~$29.6~~$(1.7) million, respectively, and for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 of ~~$4.5~~$9.4 million and ~~$37.1~~$35.4 million, respectively.



	For the Three Months Ended June 30,				For the Six Months Ended June 30,

	2019		2018		2019		2018		Three months ended September 30,				Nine months ended September 30,

									2019		2018		2019		2018
Performance metrics
Total fixed income investment returns:
In U.S. dollars	1.4	%	(0.4	)%	2.4	%	(0.5	)%	0.4	%	0.6	%	2.8	%	0.2	%
In local currencies	1.3	%	0.4	%	2.5	%	0.4	%	0.8	%	0.5	%	3.4	%	1.0	%
Bloomberg Barclays US Agg 1-3 Year Total Return Value Unhedged USD	1.5	%	0.3	%	2.7	%	0.1	%	0.7	%	0.3	%	3.4	%	0.4	%
OMX Stockholm OMRX Total Bond Index	1.1	%	0.6	%	2.0	%	1.1	%	0.6	%	(0.5	)%	2.6	%	0.6	%
Bloomberg Barclays Pan-European Aggregate: Corp 1-3 Years Total Return	0.1	%	(0.1	)%	1.4	%	0.1	%	0.3	%	0.1	%	1.8	%	0.4	%
Total equity securities and other long-term investments returns:
In U.S. dollars	3.0	%	(0.5	)%	9.0	%	1.6	%	2.4	%	0.5	%	11.7	%	2.1	%
In local currencies	2.7	%	1.0	%	8.5	%	2.7	%	2.8	%	0.5	%	11.5	%	3.3	%
S&P 500 Index (total return)	4.3	%	3.4	%	18.5	%	2.6	%	1.7	%	7.7	%	20.6	%	10.6	%
Total consolidated portfolio
In U.S. dollars	1.7	%	(0.4	)%	3.6	%	(0.2	)%	0.8	%	0.6	%	4.4	%	0.4	%
In local currencies	1.5	%	0.5	%	3.6	%	0.7	%	1.2	%	0.5	%	4.8	%	1.3	%

Three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018

Sirius Group's pre-tax total gross return on invested assets was ~~1.7%~~0.8% for the three months ended ~~June~~September 30, 2019 compared to ~~(0.4)%~~0.6% for the three months ended ~~June~~September 30, 2018. The result for the three months ended ~~June~~September 30, 2019 included foreign currency (losses) on investments, which decreased the total pre-tax return by (0.4)%. The 2018 result included foreign currency gains on investments, which increased the total pre-tax return by ~~0.2%. The 2018 result included foreign currency losses on investments, which decreased the total pre-tax return by (0.9)%~~0.1%. The currency ~~gains~~(loss) for the ~~second~~third quarter of 2019 ~~were~~was generated mainly from our Swedish kronor, Euro, and Canadian dollar ~~and Israeli shekel~~ holdings as these currencies ~~strengthened 1.4%~~weakened by (5.7)%, ~~1.9%~~(4.4)%, and ~~1.8%~~(1.1)%, respectively, versus the U.S. dollar. The currency ~~losses~~gains for the ~~second~~third quarter of 2018 were generated mainly from our Swedish kronor ~~Euro, and Israeli shekel~~ holdings as ~~these currencies weakened 7.2%~~this currency strengthened 0.5%, ~~5.7%, and 4.3%, respectively,~~ versus the U.S. dollar.

~~Table of Contents~~

For the ~~six~~nine months ended ~~June~~September 30, 2019, Sirius Group's pre-tax total gross return on invested assets was ~~3.6%~~4.4% versus ~~(0.2)%~~0.4% for the same period in 2018. Currency ~~did not impact our six month~~reduced the nine months ended September 30, 2019 ~~investments~~investment result ~~while the~~by (0.4)%. The investment result for the ~~six~~nine months ended ~~June~~September 30, 2018 was adversely impacted by the strengthening of the U.S. dollar which reduced our return by (0.9)%.

Net investment income was ~~$24~~$23 million for the three months ended ~~June~~September 30, 2019 compared to ~~$19~~$22 million for the three months ended ~~June~~September 30, 2018. Net investment income was ~~$45~~$67 million for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to ~~$30~~$52 million for the ~~six~~nine months ended ~~June~~September 30, 2018. The increase ~~in both periods~~for the nine months ended September 30, 2019 was driven by higher earned income from our ~~equity~~fixed income securities and other long term investments; in addition, the increase for the ~~six~~nine months ended ~~June~~September 30, 2019 was driven by a higher interest rate environment at the time of reinvestment.

Net realized and unrealized investment gains (losses), excluding foreign currency, were ~~$29~~$21 million for the three months ended ~~June~~September 30, 2019 compared to ~~$(4)~~$(7) million for the three months ended ~~June~~September 30, 2018. For the ~~six~~nine months ended ~~June~~September 30, 2019, net realized and unrealized investment gains (losses), excluding foreign currency, were ~~$76~~$97 million compared to ~~$(10)~~$(17) million for the ~~six~~nine months ended ~~June~~September 30, 2018. The increase in both periods was driven by unrealized investment gains consistent with overall market performance.

Fixed income results (including short-term investments)

As of ~~June~~September 30, 2019, the fixed income portfolio duration was approximately ~~1.5~~1.6 years compared to 1.7 years as of December 31, 2018. The average credit quality of the fixed income portfolio, including short term investments, was AA at ~~June~~September 30, 2019 which is unchanged from December 31, 2018. As of ~~June~~September 30, 2019 and December 31, 2018, Sirius Group held ~~$357~~$324 million and $361 million, respectively, of non-U.S. denominated fixed income securities.

The fixed income portfolio gained ~~1.4%~~0.4% on a U.S. dollar basis and ~~1.3%~~0.8% in local currencies for the three months ended ~~June~~September 30, 2019. Our U.S. portfolio returned ~~1.4%~~0.9% versus the Barclays 1-3 Year Aggregate ("BarcAg1-3") of ~~1.5%~~0.7%. Our non-U.S. portfolio returned ~~0.3%~~0.1% in ~~original~~local currencies, which compares to the OMX Stockholm OMRX Total Return Bond Index ("OMRX") of ~~1.1%~~0.6% and the Bloomberg Barclays Pan-European Aggregate: Corp 1-3 Years Total Return ("BarcAg1-3 EUR") of ~~0.1%~~0.3%. The fixed income portfolio ~~lost (0.4)%~~returned 0.6% on a U.S. dollar basis and returned ~~0.4%~~0.5% in local currencies for the three months ended ~~June~~September 30, 2018. Our U.S. portfolio returned ~~0.3%~~0.6% versus the BarcAg1-3 of 0.3%. Our non-U.S. portfolio returned ~~0.6%~~0.0% in ~~original~~local currencies which compares to the OMRX of ~~0.6%~~(0.5)%.

The fixed income portfolio gained ~~2.4%~~2.8% on a U.S. dollar basis and ~~2.5%~~3.4% in local currencies for the ~~six~~nine months ended ~~June~~September 30, 2019. Our U.S. portfolio returned ~~2.8%~~3.7% versus the BarcAg1-3 of ~~2.7%~~3.4%. Our non-U.S. portfolio returned ~~0.7%~~0.9% in ~~original~~local currencies which compares to the OMRX of ~~2.0%~~2.6% and the BarcAg1-3 EUR of ~~1.4%~~1.8%. For the three and nine months ended September 30, 2019, the duration of the comparative indices was longer versus our portfolio. The lower duration of our portfolio adversely impacted our return versus the indices due to the decreasing interest rate environment. The return for the ~~six~~nine months ended ~~June~~September 30, 2018 was ~~(0.5)%~~0.2% on a U.S. dollar basis and ~~0.4%~~1.0% in ~~original~~local currencies. Our U.S. portfolio returned ~~0.3%~~0.9% versus the BarcAg1-3 of ~~0.1%~~0.4%. The outperformance was due to a lower concentration in treasuries in our portfolio compared to the BarcAg1-3. Our non-U.S. portfolio returned 0.8% in ~~original~~local currencies which compares to the OMRX of ~~1.1%~~0.6%, due to a ~~market driven negative return in~~market-driven strong performance of our ~~euro denominated~~Canadian dollar fixed income investments.

Equity securities and other long-term investments results

As of ~~June~~September 30, 2019, the equity and other long-term investments portfolio included ~~$475~~$491 million of U.S. dollar denominated securities compared to $439 million of U.S. dollar denominated securities as of December 31, 2018. As of ~~June~~September 30, 2019 and December 31, 2018, Sirius Group held ~~$187~~$183 million and $149 million, respectively, of non-U.S. denominated equity and other long-term investments.

For the three months ended ~~June~~September 30, 2019, the equity portfolio gained ~~3.0%~~2.4% on a U.S. dollar basis and gained ~~2.7%~~2.8% in local currencies. The S&P 500 gained ~~4.3%~~1.7% for the same period. For the three months ended ~~June~~September 30, 2018, the equity portfolio ~~lost (0.5)%~~gained 0.5% on a U.S. dollar basis ~~but gained 1.0%~~and in local currencies. The S&P 500 gained ~~3.4%~~7.7% for the same period.

~~Table of Contents~~

For the ~~six~~nine months ended ~~June~~September 30, 2019, the equity portfolio returned ~~9.0%~~11.7% on a U.S. dollar basis and ~~8.5%~~11.5% in ~~original~~local currencies versus the S&P 500 of ~~18.5%~~20.6%. Performance lagged the S&P 500 due to the market neutral strategy of a large portion of our equity and other long-term investments portfolio. For the ~~six~~nine months ended ~~June~~September 30, 2018, the equity portfolio returned ~~1.6%~~2.1% on a U.S. dollar basis and ~~2.7%~~3.3% in local currencies versus the S&P 500 of ~~2.6%~~10.6%.

Foreign Currency Translation

Impact of Foreign Currency Translation

The U.S. dollar is the functional currency for Sirius Group's businesses except for Sirius International, Syndicate 1945, several subsidiaries of IMG, and the Canadian reinsurance operations of Sirius America. Sirius Group also invests in securities denominated in foreign currencies. Assets and liabilities recorded in these foreign currencies are translated into U.S. dollars at exchange rates in effect at the balance sheet date, and revenues and expenses are converted using the average exchange rates for the period. Net foreign exchange gains and losses arising from the translation of functional currencies into U.S. dollars are reported in common shareholders' equity under the caption Other comprehensive (loss). As of ~~June~~September 30, 2019 and December 31, 2018, Sirius Group had net unrealized foreign currency translation (losses) of ~~$(229)~~$(271) million and $(202) million, respectively, recorded in Accumulated other comprehensive (loss) on its Consolidated Balance Sheets.

Assets and liabilities relating to foreign operations are remeasured into the functional currency using current exchange rates; revenues and expenses are remeasured into the functional currency using the weighted average exchange rate for the period. The resulting exchange gains and losses are reported as a component of net income in the period in which they arise within Net realized investment gains, Net unrealized investment gains (losses), and Net foreign exchange gains (losses) ~~gains.~~

The following rates of exchange for the U.S. dollar have been used for translation of investments whose functional currency is not the U.S. dollar as of ~~June~~September 30, 2019 and December 31, 2018:




Currency	Closing Rate June 30, 2019		Closing Rate December 31, 2018		Closing Rate September 30, 2019	Closing Rate December 31, 2018

Swedish kronor		9.2838		8.9397	9.8155	8.9397
British pound		0.7866		0.7850	0.8121	0.7850
Euro		0.8786		0.8734	0.9173	0.8734
Canadian dollar		1.3097		1.3614	1.3243	1.3614

Sirius International holds a large portfolio of investments that are denominated in U.S. dollars, but its functional currency is the ~~SEK.~~Swedish kronor. When Sirius International prepares its stand-alone GAAP financial statements, it remeasures its U.S. dollar-denominated investments to ~~SEK~~the Swedish kronor and recognizes the related foreign currency remeasurement gains or losses through pre-tax income. When Sirius Group consolidates Sirius International, it translates Sirius International's stand-alone GAAP financial statements to U.S. dollars and recognizes the related foreign currency translation gains or losses through other comprehensive income (loss). Since Sirius Group reports its financial statements in U.S. dollars, there is no net effect to book value per common share or to investment returns from foreign currency translation on its U.S. dollar-denominated investments at Sirius International. However, net realized and unrealized investment gains (losses), other revenues, net income (loss), earnings per share, and other comprehensive income (loss) can be significantly affected during periods of high volatility in the foreign exchange rate between the U.S. dollar and other currencies, especially the ~~SEK.~~

Swedish kronor.

~~Table of Contents~~

A summary of the impact of foreign currency translation on Sirius Group's consolidated financial results for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018 follows:

Three Months
Ended June 30, Six Months
Ended June 30,

(Millions)
2019 2018 2019 2018

Net realized investment gains - foreign currency⁽¹⁾
$ 9.6 $ 7.1 $ 20.5 $ 6.0
Net unrealized investment (losses) gains - foreign currency⁽²⁾
(7.2 ) 29.7 17.8 48.6

Net realized and unrealized investment gains - foreign currency
2.4 36.8 38.3 54.6
Net foreign exchange gains - foreign currency translation gains⁽³⁾
0.9 21.5 5.0 19.4
Net foreign exchange gains - currency swaps⁽³⁾
1.4 4.3 2.4 3.0
Net foreign exchange (losses) - currency forwards⁽³⁾
(3.0 ) - (3.0 ) -
Net foreign exchange (losses) - other⁽³⁾
- (0.1 ) - (0.2 )
Income tax benefit (expense)
1.1 - 0.9 (0.5 )

Total foreign currency remeasurement gains recognized through net income, after tax
2.8 62.5 43.6 76.3
Change in foreign currency translation on investments recognized through other comprehensive income, after tax
(0.1 ) (78.6 ) (41.8 ) (99.0 )
Change in foreign currency translation on non - investment net liabilities recognized through other comprehensive income, after tax
1.2 30.1 15.1 37.1

Total foreign currency translation gains (losses) recognized through other comprehensive income, after tax
1.1 (48.5 ) (26.7 ) (61.9 )

Total foreign currency gains recognized in comprehensive income, after tax
$ 3.9 $ 14.0 $ 16.9 $ 14.4



(Millions)	Three months ended September 30,						Nine months ended September 30,
	2019			2018			2019			2018
Net realized investment gains - foreign currency⁽¹⁾	$	14.0		$	4.7		$	34.5		$	10.7
Net unrealized investment gains (losses) - foreign currency⁽²⁾	33.9			(5.5		)	51.7			43.1
Net realized and unrealized investment gains (losses) - foreign currency	47.9			(0.8		)	86.2			53.8
Net foreign exchange gains (losses) - foreign currency translation gains (losses) ⁽³⁾	9.0			(0.4		)	14.0			19.0
Net foreign exchange gains (losses) - currency swaps⁽³⁾	3.7			(0.1		)	6.1			2.9
Net foreign exchange (losses) - currency forwards⁽³⁾	(7.8		)	—			(10.8		)	—
Net foreign exchange (losses) - other⁽³⁾	—			—			—			(0.2		)
Income tax (expense) benefit	(0.8		)	0.1			0.1			(0.4		)
Total foreign currency remeasurement gains (losses) recognized through net (loss) income, after tax	52.0			(1.2		)	95.6			75.1
Change in foreign currency translation on investments recognized through other comprehensive income, after tax	(67.8		)	6.4			(109.6		)	(92.6		)
Change in foreign currency translation on non - investment net liabilities recognized through other comprehensive income, after tax	25.5			(1.7		)	40.6			35.4
Total foreign currency translation (losses) gains recognized through other comprehensive income, after tax	(42.3		)	4.7			(69.0		)	(57.2		)
Total foreign currency gains recognized in comprehensive (loss) income, after tax	$	9.7		$	3.5		$	26.6		$	17.9

⁽¹⁾Component of Net realized investment gains on the Consolidated Statements of Income

⁽²⁾Component of Net unrealized investment gains (losses) on the Consolidated Statements of Income

⁽³⁾Component of Net foreign exchange gains (losses) ~~gains~~ on the Consolidated Statements of Income

As of ~~June~~September 30, 2019, the following currencies represented the largest exposure to foreign currency risk as a percentage of Sirius Group's common shareholders' equity: the Swedish kronor 5% (short) and the Israeli shekel 1% (long). As of December 31, 2018, the following currencies represented the largest exposure to foreign currency risk as a percentage of Sirius Group's common shareholders' equity: the Swedish kronor 13% (short) and the Israeli shekel 4% (long).

Investment portfolio composition by currency

As of ~~June~~September 30, 2019 and December 31, 2018, Sirius Group's investment portfolio included approximately ~~$487~~$473 million and $468 million of non-U.S. dollar denominated investments, most of which is denominated in Swedish kronor, Euro, Canadian dollar, Israeli shekel, ~~Canadian dollar,~~ and British pound. The investment values in this portfolio are impacted by changes in the exchange rate between the U.S. dollar and those currencies.

~~Table of Contents~~

Set forth below is the carrying value of our cash and investment holdings in U.S. dollars and foreign currencies as of ~~June~~September 30, 2019 and December 31, 2018:



	Carrying Value at June 30, 2019			Carrying Value at December 31, 2018

Currency (Millions)	Local Currency		USD	Local Currency		USD

							Carrying Value at September 30, 2019			Carrying Value at December 31, 2018
Currency (Millions)							Local Currency	USD		Local Currency	USD
U.S. Dollar	2,979.3	$	2,979.3	2,941.6	$	2,941.6	3,040.4	$	3,040.4	2,941.6	$	2,941.6
Swedish kronor	1,473.3		158.7	1,348.1		150.8	1,498.8	152.7		1,348.1	150.8
Euro	87.9		100.0	105.2		120.5	82.5	89.9		105.2	120.5
Canadian dollar							113.4	85.6		84.0	61.7
Israeli shekel	273.2		76.5	232.7		62.1	279.3	80.3		232.7	62.1
Canadian dollar	88.5		67.6	84.0		61.7
British pound	6.1		7.8	8.2		10.4	8.4	10.3		8.2	10.4
Other	-		76.4	-		62.6	—	54.2		—	62.6

Total investments		$	3,466.3		$	3,409.7		$	3,513.4		$	3,409.7

Results of Reportable Segments

Global Property

Three months ended
June 30, Six months ended
June 30,

Global Property(Millions) 2019 2018 2019 2018

Gross written premiums $ 236.2 $ 325.4 $ 566.9 $ 672.0
Net written premiums 191.6 177.0 432.9 424.2
Net earned insurance and reinsurance premiums 164.3 167.5 304.0 303.6
Loss and allocated LAE (131.3 ) (68.2 ) (193.9 ) (138.6 )
Insurance and reinsurance acquisition expenses (27.2 ) (34.1 ) (53.0 ) (63.4 )

Technical profit
$ 5.8 $ 65.2 $ 57.1 $ 101.6

Unallocated LAE (2.6 ) (2.5 ) (4.7 ) (4.4 )
Other underwriting expenses (17.0 ) (18.1 ) (33.2 ) (35.5 )

Underwriting (loss) income $ (13.8 ) $ 44.6 $ 19.2 $ 61.7

Ratios:
Loss ratio⁽¹⁾ 81.5 % 42.2 % 65.3 % 47.1 %
Acquisition expense ratio⁽²⁾ 16.6 % 20.4 % 17.4 % 20.9 %
Other underwriting expense ratio⁽³⁾ 10.3 % 10.8 % 10.9 % 11.7 %

Combined ratio⁽⁴⁾ 108.4 % 73.4 % 93.6 % 79.7 %



	Three months ended September 30,						Nine months ended September 30,
Global Property (Millions)	2019			2018			2019			2018
Gross written premiums	$	153.6		$	203.7		$	720.5		$	875.7
Net written premiums	103.7			144.9			536.6			569.1
Net earned insurance and reinsurance premiums	159.9			172.7			463.9			476.3
Loss and allocated LAE	(184.4		)	(173.2		)	(378.3		)	(311.8		)
Insurance and reinsurance acquisition expenses	(29.2		)	(30.1		)	(82.2		)	(93.5		)
Technical (loss) profit	$	(53.7	)	$	(30.6	)	$	3.4		$	71.0
Unallocated LAE	(5.5		)	(3.3		)	(10.2		)	(7.7		)
Other underwriting expenses	(14.7		)	(17.5		)	(47.9		)	(53.0		)
Underwriting (loss) income	$	(73.9	)	$	(51.4	)	$	(54.7	)	$	10.3
Ratios:
Loss ratio⁽¹⁾	118.8		%	102.2		%	83.7		%	67.1		%
Acquisition expense ratio⁽²⁾	18.3		%	17.4		%	17.7		%	19.6		%
Other underwriting expense ratio⁽³⁾	9.2		%	10.1		%	10.3		%	11.1		%
Combined ratio⁽⁴⁾	146.3		%	129.7		%	111.7		%	97.8		%

⁽¹⁾The loss ratio is calculated by dividing the sum of loss and allocated LAE and Unallocated LAE expenses by net earned insurance and reinsurance premiums.

⁽²⁾The acquisition expense ratio is calculated by dividing insurance and reinsurance acquisition expenses by net earned insurance and reinsurance premiums.

⁽³⁾The other underwriting expense ratio is calculated by dividing other underwriting expenses by net earned insurance and reinsurance premiums.

⁽⁴⁾The combined ratio is calculated by combining the loss ratio, the acquisition expense ratio, and the other underwriting expense ratio.

~~Table of Contents~~

Three months ended ~~June~~September 30, 2019 and 2018

Gross written premiums decreased ~~27%~~25% to ~~$236~~$154 million for the three months ended ~~June~~September 30, 2019 from ~~$325~~$204 million for the three months ended ~~June~~September 30, 2018, due to ~~a decrease~~decreases in Other Property ($~~118~~36 million) and Property Catastrophe Excess ($13 million). Absent the effect of a single fronting arrangement, gross written premiums ~~increased 3%~~decreased 21% compared to the prior period. This was ~~due to an increase in Property Catastrophe Excess ($33 million), partially offset~~mainly driven by lower Other Property and Property Catastrophe Excess writings due to reduced treaty participations and non-renewals of certain accounts. Net written premiums ~~increased 8%~~decreased 28% to ~~$192~~$104 million for the three months ended ~~June~~September 30, 2019 from ~~$177~~$145 million for the three months ended ~~June~~September 30, 2018 due ~~primarily~~ to ~~an increase in Property Catastrophe Excess ($38 million), partially offset by a decrease in Other Property ($19 million).~~the same reasons mentioned above. The Other Property fronting arrangement did not impact Global Property's net written or earned insurance and reinsurance premiums for either the 2019 or 2018 periods.

Global Property produced a net combined ratio of ~~108%~~146% for the three months ended ~~June~~September 30, 2019 compared to ~~73%~~130% for the three months ended ~~June~~September 30, 2018. The increase in the combined ratio was driven by higher ~~net unfavorable prior year loss reserve development and higher~~ catastrophe losses, partially offset by lower net ~~commissions, primarily due to business mix.~~

unfavorable prior year loss reserve development.

Global Property recorded an underwriting (loss) of ~~$(14)~~$(74) million for the three months ended ~~June~~September 30, 2019 compared to an underwriting ~~income~~(loss) of ~~$45~~$(51) million for the three months ended June 30, 2018. Net unfavorable prior year loss reserve development was $56 million (34 points) primarily related to Property Catastrophe Excess ($39 million) and Other Property ($14 million) for the three months ended June 30, 2019. The unfavorable loss reserve development in Global Property was driven by higher losses from recent accident years, including $46 million from Typhoon Jebi. Net unfavorable prior year loss reserve development was $1 million (less than 1 point) for the three months ended JuneSeptember 30, 2018. The three months ended ~~June~~September 30, 2019 included catastrophe losses, net of reinsurance and reinstatement premiums, of $7$109 million (4(68 points) principally from Typhoon Faxai ($52 million) and Hurricane Dorian ($44 million) compared to $76 million (44 points) for the three months ended September 30, 2018 principally from Typhoon Jebi ($48 million), Hurricane Florence ($9 million), the Kerala Floods ($7 million) and other catastrophic events. Net unfavorable prior year loss reserve development was $1 million ~~(less than 1~~(1 point) for the three months ended ~~June~~September 30, ~~2018.~~2019 as net unfavorable prior year loss reserve development in Other Property ($14 million) and Agriculture ($1 million) was partially offset by net favorable prior year loss reserve development in Property Catastrophe ~~losses~~Excess ($14 million). Net unfavorable prior year loss reserve development was $11 million (6 points) for the three months ended ~~June~~September 30, ~~2019 were~~2018 primarily ~~from Cyclone Fani~~related to Other Property ($37 million) and Property Catastrophe Excess ($4 million), resulting from higher than expected loss reporting from recent accident years, including $6 million of increases from natural catastrophes, including the 2017 North ~~Queensland Monsoon ($1 million), and Windstorm Alfrida ($1 million).~~

~~Six~~American natural catastrophes.

Nine months ended ~~June~~September 30, 2019 and 2018

Gross written premiums decreased ~~16%~~18% to ~~$567~~$721 million for the ~~six~~nine months ended ~~June~~September 30, 2019 from ~~$672~~$876 million for the ~~six~~nine months ended ~~June~~September 30, 2018. Absent the effect of a single fronting arrangement, gross written premiums decreased 5%9% compared to the prior period. This was due to a decrease in Other Property primarily driven by reduced treaty participations and non-renewals of certain accounts, partially offset by an increase in Property Catastrophe Excess ($3218 million). Net written premiums ~~increased 2%~~decreased 6% to ~~$433~~$537 million for the ~~six~~nine months ended ~~June~~September 30, 2019 from ~~$424~~$569 million for the ~~six~~nine months ended ~~June~~September 30, 2018 due primarily to a decrease in Other Property ($66 million), partially offset by an increase in Property Catastrophe Excess ($~~55 million), partially offset by a decrease in Other Property ($47~~34 million). The Other Property fronting arrangement did not impact Global Property's net written or earned insurance and reinsurance premiums for either the 2019 or 2018 periods.

Global Property produced a net combined ratio of ~~94%~~112% for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to ~~80%~~98% for the ~~six~~nine months ended ~~June~~September 30, 2018. The increase in the combined ratio was driven by higher net unfavorable prior year loss reserve development and higher catastrophe ~~losses, partially offset by lower net commissions, primarily due to business mix.~~

losses.

~~Table of Contents~~

Global Property recorded an underwriting ~~income~~(loss) of ~~$19 million and $62~~$(55) million for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to $10 million of underwriting income for the nine months ended September 30, 2018. The nine months ended September 30, 2019 included catastrophe losses, net of reinsurance and ~~2018, respectively.~~reinstatement premiums, of $118 million (25 points) compared to $79 million (17 points) for the nine months ended September 30, 2018. Catastrophe losses, net of reinsurance and reinstatement premiums, for the nine months ended September 30, 2019 were primarily from Typhoon Faxai ($52 million) and Hurricane Dorian ($44 million). Net unfavorable prior year loss reserve development was ~~$67~~$68 million ~~(22~~(15 points) primarily related to Other Property ($3953 million) and Property Catastrophe Excess ($2814 million) for the ~~six~~nine months ended ~~June~~September 30, 2019. The unfavorable loss reserve development in Global Property for the nine months ended September 30, 2019 was driven by higher losses from recent accident years mainly Typhoon Jebi and Hurricanes ~~Irma,~~ Michael, Florence, and ~~Florence.~~Irma. A portion of this unfavorable loss reserve development is due to projected increased costs for claims adjusting associated with insureds' assignment of benefits to third parties, primarily associated with Hurricanes Irma and Michael exposures. Net unfavorable prior year loss reserve development was ~~$18~~$29 million (6 points) for the ~~six~~nine months ended ~~June~~September 30, ~~2018. The six months ended June 30, 2019 included catastrophe losses, net~~2018, primarily related to Other Property ($20 million) and Property Catastrophe Excess ($11 million), resulting from higher than expected loss reporting from recent accident years, including $7 million of ~~reinsurance and reinstatement premiums, of $8 million (3 points) compared to $3 million (1 point) for~~increases from natural catastrophes, including the ~~six months ended June 30, 2018. Catastrophe losses for the six months ended June 30, 2019 were primarily from Cyclone Fani ($3 million), the~~2017 North ~~Queensland Monsoon ($2 million), and Windstorm Alfrida ($2 million).~~

American natural catastrophes.

Global Property gross written premiums

Three months ended June 30, Six months ended June 30,

Global Property (Millions) 2019 2018 2019 2018

Other property $ 114.8 $ 232.5 $ 267.6 $ 405.2
Property catastrophe excess 78.8 45.6 244.1 212.2
Agriculture 42.6 47.3 55.2 54.6

Total $ 236.2 $ 325.4 $ 566.9 $ 672.0



	Three months ended September 30,				Nine months ended September 30,
Global Property (Millions)	2019		2018		2019		2018
Other property	$	103.3	$	138.8	$	370.9	$	544.0
Property catastrophe excess	42.3		55.3		286.4		267.5
Agriculture	8.0		9.6		63.2		64.2
Total	$	153.6	$	203.7	$	720.5	$	875.7

Three months ended ~~June~~September 30, 2019 and 2018

Global Property's gross written premiums decreased ~~27%~~25% to ~~$236~~$154 million for the three months ended ~~June~~September 30, 2019 from ~~$325~~$204 million for the three months ended ~~June~~September 30, 2018 due to decreases in Other Property ($36 million) and Property Catastrophe Excess ($13 million). The decrease in Other Property was due to lower premium volume on an Other Property fronting arrangement ($16 million), reduced treaty participations, and non-renewals of certain accounts.

Nine months ended September 30, 2019 and 2018

Global Property's gross written premiums decreased 18% to $721 million for the nine months ended September 30, 2019 from $876 million for the nine months ended September 30, 2018. The decrease in Other Property was due to lower premium volume on an Other Property fronting arrangement ($9594 million), reduced treaty participations, and non-renewals of certain accounts. This decrease was partially offset by an increase in Property Catastrophe Excess ($3318 million).

~~Six months ended June 30, 2019 and 2018~~

Global Property's gross written premiums decreased 16% to $567 million for the six months ended June 30, 2019 from $672 million for the six months ended June 30, 2018. The decrease in Other Property was due to lower premium volume on an Other Property fronting arrangement ($77 million), reduced treaty participations, and non-renewals of certain accounts. This decrease was partially offset by an increase in Property Catastrophe Excess ($32 million).

Global Property net earned insurance and reinsurance premiums

Three months ended
June 30, Six months ended
June 30,

Global Property (Millions) 2019 2018 2019 2018

Other property $ 90.3 $ 103.1 $ 180.7 $ 196.4
Property catastrophe excess 51.9 42.0 96.0 84.4
Agriculture 22.1 22.4 27.3 22.8

Total $ 164.3 $ 167.5 $ 304.0 $ 303.6



	Three months ended September 30,				Nine months ended September 30,
Global Property (Millions)	2019		2018		2019		2018
Other property	$	86.7	$	98.6	$	267.4	$	295.0
Property catastrophe excess	49.4		50.9		145.4		135.3
Agriculture	23.8		23.2		51.1		46.0
Total	$	159.9	$	172.7	$	463.9	$	476.3

~~Table of Contents~~

Three months ended ~~June~~September 30, 2019 and 2018

Global Property's net earned insurance and reinsurance premiums decreased 2%8% to ~~$164~~$160 million for the three months ended ~~June~~September 30, 2019 from ~~$168~~$173 million for the three months ended ~~June~~September 30, ~~2018.~~2018 due primarily to a decrease in Other Property ($12 million). The Other Property fronting treaty did not impact Global Property's net earned insurance and reinsurance premiums for either the 2019 or 2018 periods.

~~Six~~

Nine months ended ~~June~~September 30, 2019 and 2018

Global Property's net earned insurance and reinsurance premiums ~~was $304~~decreased 3% to $464 million for ~~each of~~ the ~~six~~nine months ended ~~June~~September 30, 2019 from $476 million for the nine months ended September 30, 2018. Decreases in Other Property ($28 million) were partially offset by increases in Property Catastrophe Excess ($10 million) and ~~2018.~~Agriculture ($5 million). The Other Property fronting treaty did not impact Global Property's net earned insurance and reinsurance premiums for either the 2019 or 2018 periods.

Global A&H

Global A&H consists of Sirius Group's Global A&H insurance and reinsurance underwriting unit along with two MGUs (IMG and Armada).



		Three months ended June 30,						Six months ended June 30,

													Three months ended September 30,						Nine months ended September 30,
Global A&H (*Millions*)		2019			2018			2019			2018		2019			2018			2019			2018

Gross written premiums	$	152.8		$	112.3		$	322.1		$	257.9		$	137.4		$	117.1		$	459.5		$	375.0
Net written premiums		120.6			82.8			255.5			198.3		104.6			87.9			360.1			286.2
Net earned insurance and reinsurance premiums		118.8			80.8			214.9			168.8		115.1			89.6			330.0			258.4
Loss and allocated LAE		(71.8	)		(40.9	)		(135.0	)		(86.7	)	(63.6		)	(51.3		)	(198.6		)	(138.0		)
Insurance and reinsurance acquisition expenses		(36.0	)		(26.4	)		(62.6	)		(55.6	)	(32.5		)	(26.7		)	(95.1		)	(82.3		)

Technical profit	$	11.0		$	13.5		$	17.3		$	26.5		$	19.0		$	11.6		$	36.3		$	38.1

Unallocated LAE		(2.0	)		(1.0	)		(3.5	)		(2.6	)	(2.0		)	(1.7		)	(5.5		)	(4.3		)
Other underwriting expenses		(5.9	)		(6.3	)		(12.0	)		(14.3	)	(6.8		)	(6.4		)	(18.8		)	(20.7		)

Underwriting income	$	3.1		$	6.2		$	1.8		$	9.6		$	10.2		$	3.5		$	12.0		$	13.1

Service fee revenue		30.3			27.4			66.6			60.2		31.0			29.3			97.6			89.5
MGU unallocated LAE		(5.3	)		(5.1	)		(9.4	)		(5.1	)	(4.3		)	(4.7		)	(13.7		)	(9.8		)
MGU other underwriting expenses		(4.8	)		(3.5	)		(7.5	)		(11.9	)	(3.7		)	(2.0		)	(11.2		)	(13.9		)
MGU general and administrative expenses		(15.0	)		(14.2	)		(31.2	)		(23.7	)	(15.1		)	(13.8		)	(46.3		)	(37.5		)

Underwriting income, including net service fee income	$	8.3		$	10.8		$	20.3		$	29.1		$	18.1		$	12.3		$	38.4		$	41.4



Ratios:
Loss ratio⁽¹⁾		62.1	%		51.9	%		64.4	%		52.9	%	57.0		%	59.2		%	61.8		%	55.1		%
Acquisition expense ratio⁽²⁾		30.3	%		32.7	%		29.1	%		32.9	%	28.2		%	29.8		%	28.8		%	31.8		%
Other underwriting expense ratio⁽³⁾		5.0	%		7.8	%		5.6	%		8.5	%	5.9		%	7.1		%	5.7		%	8.0		%

Combined ratio ⁴⁾		97.4	%		92.4	%		99.1	%		94.3	%



Combined ratio⁽⁴⁾													91.1		%	96.1		%	96.3		%	94.9		%

⁽¹⁾The loss ratio is calculated by dividing the sum of loss and allocated LAE and Unallocated LAE expenses by net earned insurance and reinsurance premiums.

⁽²⁾The acquisition expense ratio is calculated by dividing insurance and reinsurance acquisition expenses by net earned insurance and reinsurance premiums.

⁽³⁾The other underwriting expense ratio is calculated by dividing other underwriting expenses by net earned insurance and reinsurance premiums.

⁽⁴⁾The combined ratio is calculated by combining the loss ratio, the acquisition expense ratio, and the other underwriting expense ratio.

~~Table of Contents~~

Three months ended ~~June~~September 30, 2019 and 2018

Gross written premiums increased ~~37%~~17% to ~~$153~~$137 million for the three months ended ~~June~~September 30, 2019 from ~~$112~~$117 million for the three months ended ~~June~~September 30, 2018 due to higher writings for risks primarily originating from the U.S. Net written premiums increased ~~46%~~19% to ~~$121~~$105 million for the three months ended ~~June~~September 30, 2019 from ~~$83~~$88 million for the three months ended ~~June~~September 30, 2018 due to higher writings for risks primarily originating from the U.S. as well as higher retentions.

Global A&H produced a net combined ratio of ~~97%~~91% for the three months ended ~~June~~September 30, 2019 compared to ~~92%~~96% for the three months ended ~~June~~September 30, 2018. Net favorable prior year loss reserve development was $1$6 million ~~(1 point)~~(5 points) for the three months ended ~~June~~September 30, 2019 compared to net favorable prior year loss reserve development of $5$3 million (6(3 points) for the three months ended ~~June~~September 30, 2018. The decrease in the acquisition expense ratio from the prior period was due to business mix as increased primary insurance writings for risks originating from the U.S. are recorded at lower net commission ratios.

Underwriting income, including net service fee income, for Global A&H was $8$18 million for the three months ended ~~June~~September 30, 2019 compared to ~~$11~~$12 million for the three months ended ~~June~~September 30, 2018. The ~~decrease~~increase of $3$6 million was primarily driven by ~~lower~~higher underwriting income due to ~~the change in~~higher favorable loss reserve development compared to the prior ~~period.~~

~~Six~~period and higher net earned insurance and reinsurance premiums.

Nine months ended ~~June~~September 30, 2019 and 2018

Gross written premiums increased ~~25%~~23% to ~~$322~~$460 million for the ~~six~~nine months ended ~~June~~September 30, 2019 from ~~$258~~$375 million for the ~~six~~nine months ended ~~June~~September 30, 2018 due to higher writings for risks primarily originating from the U.S. Net written premiums increased ~~29%~~26% to ~~$256~~$360 million for the ~~six~~nine months ended ~~June~~September 30, 2019 from ~~$198~~$286 million for the ~~six~~nine months ended ~~June~~September 30, 2018 due to higher writings for risks primarily originating from the U.S. as well as higher retentions.

Global A&H produced a net combined ratio of ~~99%~~96% for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to ~~94%~~95% for the ~~six~~nine months ended ~~June~~September 30, 2018. ~~The increase in~~For the ~~combined ratio was due to~~nine months ended September 30, 2019, net ~~unfavorable~~favorable prior year loss reserve development ~~of $5~~was $1 million ~~(2 points) for the six months ended June 30, 2019~~(less than 1 point) compared to $8$11 million (5(4 points) of net favorable prior year loss reserve development for the ~~six~~nine months ended ~~June~~September 30, 2018. The ~~net unfavorable loss reserve development recorded for~~decrease in the ~~six months ended June 30, 2019~~acquisition expense ratio from the prior period was due to ~~higher than expected claims activity.~~

business mix as increased primary insurance writings for risks originating from the U.S. are recorded at lower net commission ratios. Additionally, net earned insurance and reinsurance premiums increased 28% to $330 million for the nine months ended September 30, 2019 from $258 million for the nine months ended September 30, 2018.

Underwriting income, including net service fee income, for Global A&H was ~~$20~~$38 million for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to ~~$29~~$41 million for the ~~six~~nine months ended ~~June~~September 30, 2018. The decrease of $9$3 million was primarily driven by lower net service fee income and underwriting income ~~due to the net unfavorable loss reserve development recorded~~ for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to the prior period.

~~Table of Contents~~

Specialty & Casualty

Specialty & Casualty consists of Sirius Group's insurance and reinsurance underwriting units, which offer specialty & casualty product lines on a worldwide basis.



		Three months ended June 30,						Six months ended June 30,

													Three months ended September 30,						Nine months ended September 30,
Specialty & Casualty (*Millions*)		2019			2018			2019			2018		2019			2018			2019			2018

Gross written premiums	$	96.9		$	60.9		$	217.8		$	176.4		$	120.6		$	76.5		$	338.4		$	252.9
Net written premiums		89.2			55.1			197.4			155.7		113.2			72.6			310.6			228.3
Net earned insurance and reinsurance premiums		87.3			55.5			163.0			109.9		98.7			58.4			261.7			168.3
Loss and allocated LAE		(61.3	)		(31.7	)		(108.9	)		(53.3	)	(85.5		)	(34.1		)	(194.4		)	(87.4		)
Insurance and reinsurance acquisition expenses		(24.6	)		(14.6	)		(45.1	)		(28.7	)	(27.1		)	(16.2		)	(72.2		)	(44.9		)

Technical profit	$	1.4		$	9.2		$	9.0		$	27.9

Technical (loss) profit													$	(13.9	)	$	8.1		$	(4.9	)	$	36.0
Unallocated LAE		(2.2	)		(1.7	)		(4.1	)		(2.9	)	(3.0		)	(1.6		)	(7.1		)	(4.5		)
Other underwriting expenses		(6.7	)		(7.9	)		(14.9	)		(15.9	)	(8.8		)	(8.4		)	(23.7		)	(24.3		)

Underwriting (loss) income	$	(7.5	)	$	(0.4	)	$	(10.0	)	$	9.1		$	(25.7	)	$	(1.9	)	$	(35.7	)	$	7.2



Ratios:
Loss ratio⁽¹⁾		72.7	%		60.2	%		69.3	%		51.1	%	89.7		%	61.1		%	77.0		%	54.6		%
Acquisition expense ratio⁽²⁾		28.2	%		26.3	%		27.7	%		26.1	%	27.5		%	27.7		%	27.6		%	26.7		%
Other underwriting expense ratio⁽³⁾		7.7	%		14.2	%		9.1	%		14.5	%	8.9		%	14.4		%	9.1		%	14.4		%

Combined ratio⁽⁴⁾		108.6	%		100.7	%		106.1	%		91.7	%	126.1		%	103.2		%	113.7		%	95.7		%

⁽¹⁾The loss ratio is calculated by dividing the sum of loss and allocated LAE and Unallocated LAE expenses by net earned insurance and reinsurance premiums.

⁽²⁾The acquisition expense ratio is calculated by dividing insurance and reinsurance acquisition expenses by net earned insurance and reinsurance premiums.

⁽³⁾The other underwriting expense ratio is calculated by dividing other underwriting expenses by net earned insurance and reinsurance premiums.

⁽⁴⁾The combined ratio is calculated by combining the loss ratio, the acquisition expense ratio, and the other underwriting expense ratio.

Three months ended ~~June~~September 30, 2019 and 2018

Gross written premiums increased ~~59%~~57% to ~~$97~~$121 million for the three months ended ~~June~~September 30, 2019 from ~~$61~~$77 million for the three months ended ~~June~~September 30, 2018 due primarily to increases in Casualty ($2833 million), and Aviation & Space ($6 million)~~, and Trade Credit ($4 million)~~. Net written premiums increased ~~62%~~55% to ~~$89~~$113 million for the three months ended ~~June~~September 30, 2019 from ~~$55~~$73 million for the three months ended ~~June~~September 30, 2018 due to the same lines of business as the gross written premiums increase.

Specialty & Casualty produced a net combined ratio of ~~109%~~126% for the three months ended ~~June~~September 30, 2019 compared to ~~101%~~103% for the three months ended ~~June~~September 30, 2018. The higher net combined ratio was due to a higher Loss ratio driven by net unfavorable prior year loss reserve development and higher current accident year losses in Aviation & Space and Trade Credit, which included $1$6 million ~~of loss development~~ from the ~~Ethiopian Airlines plane crash.~~

Thomas Cook bankruptcy.

Specialty & Casualty recorded an underwriting (loss) of ~~$(8)~~$(26) million for the three months ended ~~June~~September 30, 2019 compared to an underwriting loss of ~~$(0.4)~~$(2) million for the three months ended ~~June~~September 30, 2018. Specialty & Casualty had $6$10 million (7(10 points) of net unfavorable prior year loss reserve development for the three months ended ~~June~~September 30, 2019, primarily driven by ~~Marine~~Casualty ($~~4 million) and Aviation & Space ($3~~9 million) compared to $3$7 million (5(12 points) of net favorable prior year loss reserve development for the three months ended ~~June~~September 30, 2018, primarily driven by ~~Aviation & Space~~Contingency ($13 million) and Marine ($2 million).

~~Table of Contents~~

~~Six~~ The net unfavorable prior year loss reserve for the three months ended ~~June~~September 30, 2019 for Casualty was due to higher than expected claims activity.

Nine months ended September 30, 2019 and 2018

Gross written premiums increased ~~24%~~34% to ~~$218~~$338 million for the ~~six~~nine months ended ~~June~~September 30, 2019 from ~~$176~~$253 million for the ~~six~~nine months ended ~~June~~September 30, 2018 due primarily to ~~an increase~~increases in Casualty ($6395 million), Aviation & Space ($10 million), and Environmental ($6 million), partially offset by ~~a decrease~~decreases in Trade Credit ($1716 million) and Contingency ($9 million). Net written premiums increased 26% to $197 million for the six months ended June 30, 2019 from $156 million for the six months ended June 30, 2018 due to the same lines of business as the gross written premiums increase.

Specialty & Casualty produced a net combined ratio of ~~106%~~114% for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to ~~92%~~96% for the ~~six~~nine months ended ~~June~~September 30, 2018. The higher net combined ratio was due to a higher Loss ratio driven by net unfavorable prior year loss reserve development and higher current accident year losses in Trade Credit, which included $6 million from the Thomas Cook bankruptcy, and Aviation & Space, which included $4 million from the Ethiopian Airlines plane crash.

Specialty & Casualty recorded an underwriting (loss) of ~~$(10)~~$(36) million for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to underwriting income of $9$7 million for the ~~six~~nine months ended ~~June~~September 30, 2018. Specialty & Casualty had $5$15 million (3(6 points) of net unfavorable prior year loss reserve development for the ~~six~~nine months ended ~~June~~September 30, 2019, primarily driven by unfavorable loss reserve development in Casualty ($11 million), Marine ($4 million), and Aviation & Space ($~~4 million), Marine ($~~3 ~~million), and Casualty ($2~~ million), partially offset by favorable loss reserve development in Trade Credit ($32 million) and Contingency ($2 million). For the ~~six~~nine months ended ~~June~~September 30, 2018, Specialty & Casualty had ~~$10~~$18 million (9(11 points) of favorable prior year loss reserve development, primarily driven by Aviation & Space ($1112 million) and Marine ($3 million).

Catastrophe losses, net of reinsurance and reinstatement premiums, were $1 million (less than 1 point) each for the nine months ended September 30, 2019 and 2018, respectively.

Specialty & Casualty gross written premiums



		Three months ended June 30,				Six months ended June 30,

									Three months ended September 30,				Nine months ended September 30,
Specialty & Casualty (*Millions*)		2019		2018		2019		2018	2019		2018		2019		2018

Casualty	$	56.1	$	28.1	$	117.9	$	55.2	$	74.1	$	41.4	$	192.0	$	96.6
Aviation & Space		17.1		10.8		34.4		31.9	20.4		13.5		54.8		45.4
Trade Credit		10.3		6.2		30.0		47.2	11.5		10.7		41.5		57.9
Marine		6.5		8.5		20.9		26.1	6.1		1.5		27.0		27.6
Environmental		3.9		2.4		8.3		2.8	4.8		3.9		13.1		6.7
Surety		1.6		1.4		3.2		2.8	2.8		2.7		6.0		5.5
Contingency		1.4		3.5		3.1		10.4	0.9		2.8		4.0		13.2

Total	$	96.9	$	60.9	$	217.8	$	176.4	$	120.6	$	76.5	$	338.4	$	252.9

Three months ended ~~June~~September 30, 2019 and 2018

Gross written premiums increased ~~59%~~57% to ~~$97~~$121 million for the three months ended ~~June~~September 30, 2019 from ~~$61~~$77 million for the three months ended ~~June~~September 30, 2018. Increases in gross written premiums were primarily driven by increases in Casualty ($2833 million), and Aviation & Space ($6 million)~~, and Trade Credit ($4 million)~~.

~~Six~~

Nine months ended ~~June~~September 30, 2019 and 2018

Gross written premiums increased ~~24%~~34% to ~~$218~~$338 million for the ~~six~~nine months ended ~~June~~September 30, 2019 from ~~$176~~$253 million for the ~~six~~nine months ended ~~June~~September 30, 2018. Increases in gross written premiums were primarily driven by increases in Casualty ($6395 million), Aviation & Space ($10 million), and Environmental ($6 million), partially offset by ~~a decrease~~decreases in Trade Credit ($1716 million) and Contingency ($9 million).

~~Table of Contents~~

Specialty & Casualty Net Earned Insurance and Reinsurance Premiums



		Three months ended June 30,				Six months ended June 30,

									Three months ended September 30,				Nine months ended September 30,
Specialty & Casualty (*Millions*)		2019		2018		2019		2018	2019		2018		2019		2018

Casualty	$	50.2	$	16.8	$	88.6	$	27.5	$	57.6	$	23.2	$	146.2	$	50.7
Aviation & Space		14.3		15.3		28.9		30.1	18.0		14.1		46.9		44.2
Trade Credit		11.2		9.5		22.0		20.6	12.7		11.7		34.7		32.3
Marine		7.7		9.6		16.2		23.0	6.6		4.0		22.8		27.0
Surety		1.8		0.5		3.0		0.4	1.4		1.9		4.4		2.3
Contingency		1.3		3.7		2.9		8.2	1.4		3.1		4.3		11.3
Environmental		0.8		0.1		1.4		0.1	1.0		0.4		2.4		0.5

Total	$	87.3	$	55.5	$	163.0	$	109.9	$	98.7	$	58.4	$	261.7	$	168.3

Three months ended ~~June~~September 30, 2019 and 2018:

Net earned insurance and reinsurance premiums increased ~~55%~~71% to ~~$87~~$99 million for the three months ended ~~June~~September 30, 2019 from ~~$56~~$58 million for the three months ended ~~June~~September 30, 2018. Casualty ($3335 million) was the main driver for the increase from the prior period.

~~Six~~Nine months ended ~~June~~September 30, 2019 and 2018:

Net earned insurance and reinsurance premiums increased ~~48%~~56% to ~~$163~~$262 million for the ~~six~~nine months ended ~~June~~September 30, 2019 from ~~$110~~$168 million for the ~~six~~nine months ended ~~June~~September 30, 2018. Casualty ($5995 million) was the main driver for the increase from the prior period.

Runoff & Other

Runoff & Other includes the results of Sirius Global Solutions, which specializes in the acquisition and management of runoff liabilities for insurance and reinsurance companies, both in the U.S. and internationally, as well as asbestos risks, environmental risks and other long-tailed liability exposures.



		Three months ended June 30,						Six months ended June 30,

													Three months ended September 30,						Nine months ended September 30,
Runoff & Other (*Millions*)		2019			2018			2019			2018		2019			2018			2019			2018

Gross written premiums	$	1.2		$	6.4		$	2.6		$	13.9		$	2.1		$	0.7		$	4.7		$	14.6
Net written premiums		0.3			5.4			0.7			11.5		0.8			0.3			1.5			11.8
Net earned insurance and reinsurance premiums		0.3			5.1			0.7			11.1		0.5			0.4			1.2			11.5
Loss and allocated LAE		(2.4	)		(0.3	)		(3.5	)		2.1		(0.9		)	10.2			(4.4		)	12.3
Insurance and reinsurance acquisition expenses		(1.8	)		(1.5	)		(2.5	)		(2.2	)	(0.1		)	(0.1		)	(2.6		)	(2.3		)

Technical (loss) profit	$	(3.9	)	$	3.3		$	(5.3	)	$	11.0		$	(0.5	)	$	10.5		$	(5.8	)	$	21.5

Unallocated LAE		(0.2	)		-			(0.7	)		(0.9	)	(0.2		)	(0.7		)	(0.9		)	(1.6		)
Other underwriting expenses		(1.1	)		(2.4	)		(3.2	)		(3.8	)	(1.4		)	(1.4		)	(4.6		)	(5.2		)

Underwriting (loss) income	$	(5.2	)	$	0.9		$	(9.2	)	$	6.3		$	(2.1	)	$	8.4		$	(11.3	)	$	14.7

General and administrative expenses		(1.0	)		(1.0	)		(1.8	)		(2.1	)	(1.2		)	(0.8		)	(3.0		)	(2.9		)

Underwriting (loss) income	$	(6.2	)	$	(0.1	)	$	(11.0	)	$	4.2		$	(3.3	)	$	7.6		$	(14.3	)	$	11.8

~~Table of Contents~~

Three months ended ~~June~~September 30, 2019 and 2018

Runoff & Other recorded $2 million of gross written premiums for the three months ended September 30, 2019 compared to $1 million of gross written premiums for the three months ended ~~June~~September 30, ~~2019 compared to $6 million of gross written premiums for the three months ended June 30,~~ 2018. ~~Gross written premiums for the three months ended June 30, 2018 relate primarily to premiums from a quota share.~~

Runoff & Other recorded an underwriting (loss) of ~~$(6) million and $(0.1)~~$(3) million for the three months ended ~~June~~September 30, 2019 ~~and 2018, respectively.~~compared to underwriting income of $8 million for the three months ended September 30, 2018. Runoff & Other recorded $3$1 million of net unfavorable prior year loss reserve development for the three months ended ~~June~~September 30, 2019 compared to $3$11 million of net favorable prior year loss reserve development for the three months ended ~~June~~September 30, 2018. ~~The net unfavorable prior year loss reserve development for the three~~

Runoff & Other recorded $3$5 million of gross written premiums for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to ~~$14~~$15 million of gross written premiums for the ~~six~~nine months ended ~~June~~September 30, 2018. Gross written premiums for the ~~six~~nine months ended ~~June~~September 30, 2018 relate primarily to premiums from a loss portfolio transfer and quota share.

Runoff & Other recorded an underwriting (loss) of ~~$(11)~~$(14) million for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to an underwriting ~~gain~~income of $4$12 million for the ~~six~~nine months ended ~~June~~September 30, 2018. Runoff & Other recorded $4$5 million of net unfavorable prior year loss reserve development for the ~~six~~nine months ended ~~June~~September 30, 2019 compared to ~~$12~~$23 million of net favorable prior year loss reserve development for the ~~six~~nine months ended ~~June~~September 30, 2018. The net unfavorable prior year loss reserve development for the ~~six~~nine months ended ~~June~~September 30, 2019 was due primarily to an increase in reserves for a disputed Latin American Facultative Surety claim in arbitration. The net favorable prior year loss reserve development for the ~~six~~nine months ended ~~June~~September 30, 2018 was due primarily to reductions in World Trade Center claims in response to revised information received by the Company and runoff Casualty reserves.

The following tables display Sirius Group's underwriting ratios prior to cessions to reinsurers ("Gross"), cessions to reinsurers ("Ceded") and after cessions to reinsurers ("Net") basis.

Sirius Group's net combined ratio was 46 points higher than the gross combined ratio primarily due to the costs of retrocessional protections with limited ceded loss recoveries for the three months ended ~~June~~September 30, 2019, driven by Global Property. ~~Within Specialty & Casualty, the lower net combined ratio was primarily due to high ceded loss recoveries in Aviation & Space.~~

~~Table of Contents~~



	Three months ended June 30, 2018
	Global Property	Global A&H	Specialty & Casualty	Total

					Three months ended September 30, 2018
					Global Property	Global A&H	Specialty & Casualty	Total
Gross ratios:
Loss ratio	45.5%	52.5%	56.6%	49.9%	74.2%	66.7%	53.0%	68.8%
Acquisition expense ratio	25.7%	29.0%	24.3%	24.3%	20.6%	28.0%	25.9%	20.1%
Other underwriting expense ratio	6.5%	5.7%	12.6%	10.2%	7.1%	5.4%	12.9%	8.3%

Gross Combined ratio	77.7%	87.2%	93.5%	84.4%	101.9%	100.1%	91.8%	97.2%



Ceded ratios:
Loss ratio	50.5%	54.4%	23.5%	51.6%	8.1%	89.6%	(25.7)%	32.9%
Acquisition expense ratio	33.7%	18.5%	16.3%	30.3%	28.0%	22.4%	8.5%	24.8%

Ceded Combined ratio	84.2%	72.9%	39.8%	81.9%	36.1%	112.0%	(17.2)%	57.7%



Net ratios:
Loss ratio	42.2%	51.9%	60.2%	49.0%	102.2%	59.2%	61.1%	81.1%
Acquisition expense ratio	20.4%	32.7%	26.3%	21.6%	17.4%	29.8%	27.7%	18.4%
Other underwriting expense ratio	10.8%	7.8%	14.2%	12.4%	10.1%	7.1%	14.4%	11.1%

Net Combined ratio	73.4%	92.4%	100.7%	83.0%	129.7%	96.1%	103.2%	110.6%

Sirius Group's net combined ratio was ~~one point lower~~14 points higher than the gross combined ratio for the three months ended ~~June~~September 30, 2018.

~~Six~~ The net combined ratio was higher than the gross combined ration due primarily to the costs of retrocessional protections with limited ceded loss recoveries.

Sirius Group's net combined ratio was 5 points higher than the gross combined ratio primarily due to the costs of retrocessional protections with limited ceded loss recoveries for the ~~six~~nine months ended ~~June~~September 30, 2019, driven by Global Property. Within Specialty & Casualty, the lower net combined ratio was primarily due to ~~high~~ ceded loss recoveries in Aviation & Space.

~~Table of Contents~~



	Six months ended June 30, 2018
	Global Property	Global A&H	Specialty & Casualty	Total

					Nine months ended September 30, 2018
					Global Property	Global A&H	Specialty & Casualty	Total
Gross ratios:
Loss ratio	47.5%	53.8%	49.3%	49.7%	56.8%	58.3%	50.5%	56.3%
Acquisition expense ratio	23.8%	29.9%	24.2%	23.0%	22.7%	29.2%	24.8%	22.0%
Other underwriting expense ratio	7.7%	6.4%	12.8%	10.0%	7.5%	6.1%	12.8%	9.4%

Gross Combined ratio	79.0%	90.1%	86.3%	82.7%	87.0%	93.6%	88.1%	87.7%



Ceded ratios:
Loss ratio	48.4%	56.7%	35.0%	50.9%	35.5%	68.5%	18.0%	44.9%
Acquisition expense ratio	29.5%	20.2%	9.9%	26.0%	29.0%	21.0%	9.3%	25.6%

Ceded Combined ratio	77.9%	76.9%	44.9%	76.9%	64.5%	89.5%	27.3%	70.5%



Net ratios:
Loss ratio	47.1%	52.9%	51.1%	49.3%	67.1%	55.1%	54.6%	60.4%
Acquisition expense ratio	20.9%	32.9%	26.1%	21.9%	19.6%	31.8%	26.7%	20.7%
Other underwriting expense ratio	11.7%	8.5%	14.5%	13.7%	11.1%	8.0%	14.4%	12.8%

Net Combined ratio	79.7%	94.3%	91.7%	84.9%	97.8%	94.9%	95.7%	93.9%

Sirius Group's net combined ratio was 26 points higher than the gross combined ratio primarily due to the costs of retrocessional protections with limited ceded loss recoveries for the ~~six~~nine months ended ~~June~~September 30, 2018.

In presenting Sirius ~~Group's~~Group’s results, management has included and discussed ~~the following~~ non-GAAP financial measures: Adjusted book value, Adjusted book value per share, Adjusted tangible book value, Adjusted tangible book value per share and Operating (loss) income attributable to common shareholders. The Company believes that these non-GAAP financial measures, which may be defined and calculated differently by other companies, better explain and enhance the understanding of the ~~Company's~~Company’s results of operations. However, these measures should not be viewed as a substitute for those determined in accordance with GAAP.

Adjusted book value, Adjusted book value per share, Adjusted tangible book value, and Adjusted tangible book value per share are non-GAAP financial measures. Adjusted book value and Adjusted book value per share are ~~non-GAAP financial measures~~ used to show the ~~Company's~~Company’s total worth on a per-share basis and isare useful to management and investors in analyzing the intrinsic value of the Company.

Adjusted tangible book value and Adjusted tangible book value per share are useful to investors because they measure the realizable value of shareholder returns, excluding the impact of goodwill, intangible assets, and net deferred liability on intangible assets.

Adjusted shares outstanding is derived by summing Common shares outstanding, Series B preference shares outstanding, ~~(which were issued to the cornerstone investors),~~ and the ~~Earned~~earned portion of share-based compensation awards. Adjusted book value is derived by summing Total common ~~shareholders'~~shareholders’ equity, the Series B preference share amount reflected in mezzanine equity, and the Earned portion of future proceeds from stock option awards. Outstanding warrants are excluded as they are anti-dilutive as of the respective reporting dates.

~~As of June~~ Adjusted tangible book value is derived by subtracting Goodwill, Intangible assets and Net deferred tax liability on intangible assets from Adjusted book value.

At September 30, 2019, Adjusted book value, Adjusted book value per share, Adjusted tangible book value, and Adjusted tangible book value per share include the earned effects of share-based compensation awards issued during 2019.

Adjusted book value per share is derived by dividing the Adjusted book value by the Adjusted shares outstanding. Adjusted tangible book value per share is derived by dividing Adjusted tangible book value by the Adjusted shares outstanding.

The reconciliation to Total common ~~shareholders'~~shareholders’ equity and Book value per common share, the most directly comparable GAAP measures, are presented in the table below.



(Expressed in Millions, except share information)		As of June 30, 2019		As of December 31, 2018


					September 30,			December 31,
(Expressed in millions of U.S. dollars, except share and per share amounts)					2019			2018
Common shares outstanding		115,296,918		115,151,251	115,299,342			115,151,251
Series B preference shares outstanding		11,901,670		11,901,670	11,901,670			11,901,670
Earned share-based compensation awards, excluding stock options		374,912		-	648,551			—
Earned portion of Stock option awards issued		152,772		-	267,350			—

Adjusted shares outstanding		127,726,272		127,052,921	128,116,913			127,052,921

Total common shareholders' equity	$	1,784.1	$	1,704.5
Total common shareholders’ equity					$	1,742.6		$	1,704.5
Series B preference shares		241.3		232.2	236.0			232.2
Earned portion of future proceeds from stock option awards		1.9		-	3.4			—

Adjusted book value	$	2,027.3	$	1,936.7	$	1,982.0		$	1,936.7
Goodwill					(400.4		)	(400.6		)
Intangible assets					(183.8		)	(195.6		)
Net deferred tax liability on intangible assets					24.0			26.3
Adjusted tangible book value					$	1,421.8		$	1,366.8

Book value per common share	$	15.47	$	14.80	$	15.11		$	14.80
Adjusted book value per share	$	15.87	$	15.24	$	15.47		$	15.24



Adjusted tangible book value per share					$	11.10		$	10.76

The Company uses Operating (loss) income attributable to common shareholders as a measure to evaluate the underlying fundamentals of its operations and believes it to be a useful measure of its core performance. Operating (loss) income attributable to common shareholders as used herein differs from net (loss) income attributable to common shareholders, which the Company believes is the most directly comparable GAAP measure, by the exclusion of net realized and unrealized gains ~~(losses)~~and losses on investments, net foreign exchange gains (losses) and the associated income tax expense or benefit. The ~~Company's~~Company’s management believes that Operating (loss) income attributable to common shareholders is useful to investors because it is more reflective of the ~~Company's~~Company’s core business, as it removes the variability arising from fluctuations in the ~~Company's~~Company’s fixed maturity investment portfolio, equity investments trading, investments-related derivatives, and net foreign exchange gains (losses) and the associated income tax expense or benefit of those fluctuations. The following is a reconciliation of net (loss) income attributable to common shareholders to Operating (loss) income attributable to common shareholders:

Three months
ended June 30, Six months
ended June 30,
(Expressed in Millions)

2019

2018

2019

2018

Net income attributable to common shareholders
$ 6.6 $ 97.8 $ 101.9 $ 138.3
Adjustment for net realized and unrealized gains on investments
(31.1 ) (32.5 ) (114.1 ) (44.8 )
Adjustment for net foreign exchange gains
- (25.6 ) (5.1 ) (22.1 )
Adjustment for income tax expense⁽¹⁾
5.1 0.8 16.8 -

Operating (loss) income attributable to common shareholders
$ (19.4 ) $ 40.5 $ (0.5 ) $ 71.4



(Expressed in millions of U.S. dollars)	Three months ended September 30,						Nine months ended September 30,
(Expressed in millions of U.S. dollars)	2019			2018			2019			2018
Net (loss) income attributable to common shareholders	$	(2.7	)	$	(28.0	)	$	99.2		$	110.3
Adjustment for net realized and unrealized (gains) losses on investments	(69.2		)	7.8			(183.3		)	(37.0		)
Adjustment for net foreign exchange (gains) losses	(4.3		)	0.4			(9.4		)	(21.7		)
Adjustment for income tax expense (benefits) ⁽¹⁾	10.8			(1.6		)	27.6			(1.6		)
Operating (loss) income attributable to common shareholders	$	(65.4	)	$	(21.4	)	$	(65.9	)	$	50.0

⁽¹⁾Adjustment for income tax expense (benefits) represents the income tax expense (benefits) associated with the adjustment for net realized and unrealized ~~gains~~losses (gains) on investments and the income tax expense (benefits) associated with the adjustment for net foreign exchange ~~gains.~~gains (losses). The income tax impact is estimated by applying the statutory rates of applicable jurisdictions, after consideration of other relevant factors.

~~Table of Contents~~

Liquidity is a measure of a company's ability to generate cash flows sufficient to meet the short-term and long-term cash requirements of its business operations. Sirius Group's insurance and reinsurance operations are subject to regulation and supervision in each of the jurisdictions where they are domiciled and licensed to conduct business. Generally, regulatory authorities have broad supervisory and administrative powers over such matters as licenses, standards of solvency, premium rates, policy forms, investments, security deposits, methods of accounting, form and content of financial statements, reserves for unpaid loss and LAE, reinsurance, minimum capital and surplus requirements, dividends and other distributions to shareholders, periodic examinations and annual and other report filings. In general, such regulation is for the protection of policyholders rather than shareholders. Sirius Group manages its liquidity needs primarily through the maintenance of a short duration and high quality fixed income portfolio.

Sirius Group's top tier regulated insurance and reinsurance operating subsidiary is Sirius Bermuda. Sirius Bermuda's ability to pay dividends is limited under Bermuda law and regulations. Under the Insurance Act 1978, Sirius Bermuda is restricted with respect to the payment of dividends. Sirius Bermuda is prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year's statutory balance sheet) unless it files, at least seven days before payment of such dividends, with the Bermuda Monetary Authority ("BMA") an affidavit stating that it will continue to meet the required margins following the declaration of those dividends. As of December 31, 2018, Sirius Bermuda could pay approximately $539 million to its parent company, Sirius International Group, Ltd., during 2019. Sirius Bermuda indirectly owns Sirius International, Sirius America and Sirius Group's other insurance and reinsurance operating companies, each of which are limited in their ability to pay dividends by the insurance laws of their relevant jurisdictions. CMIG International Holding Pte. Ltd. ("CMIG International"), which is approximately 82% owned by China Minsheng Investment Group Corp., Ltd. ("CMIG"), indirectly holds approximately 87% of the voting and dispositive control over the Sirius Group common shares as of ~~June~~September 30, 2019, through CMIG International's wholly-owned Bermuda holding company, CM Bermuda Ltd. ("CM Bermuda"). During 2019, CMIG has made several public announcements relating to defaults and cross-defaults on certain bonds and other debt obligations issued by certain subsidiaries of CMIG (the "CMIG Defaults"), the failure and uncertainty of CMIG's subsidiaries to repay their debt obligations as they become due and the existence of certain asset freeze orders relating to the equity interests of CMIG in certain Chinese subsidiaries not within the chain of control of Sirius Group. On May 3, 2019, in connection with the CMIG Defaults, Sirius Bermuda and Sirius Group entered into a voluntary undertaking with the BMA to provide further comfort to the BMA as the group supervisor of Sirius Group and primary regulator of Sirius Bermuda, the designated insurer for group supervisory purposes regarding the potential risks to Sirius Group in connection with the CMIG Defaults. Pursuant to the voluntary undertaking, each of Sirius Group and Sirius Bermuda have agreed, until May 3, 2020, (a) to provide ten days prior written notice to the BMA prior to declaring any dividend or capital distribution, which notice shall include an affidavit confirming that the declaration and payment of such dividend would not be in breach of (i) the provisions of section 54 of the Companies Act 1981 in the case of Sirius Bermuda, (ii) the Minimum Liquidity Ratio as defined in the Insurance Act 1978 in the case of Sirius Bermuda; and (iii) the Target Capital Level of 120% of the Enhanced Capital Requirement as defined by the Bermuda Solvency Capital Requirement promulgated by the BMA for Sirius Group and Sirius Bermuda, and a summary description of the use proceeds from such declaration or dividend or capital distribution within Sirius Group or Sirius Bermuda; (b) not to enter into any guarantees, keepwells, loans or other financial arrangements between Sirius Group and CMIG, or provide any credit support with respect to any obligations of CMIG; and (c) not to enter into any related party transaction with CMIG.

Sirius International has the ability to pay dividends to Sirius Bermuda subject to the availability of unrestricted equity, calculated in accordance with the Swedish Act on Annual Accounts in Insurance Companies and the Swedish Financial Supervisory Authority (the "SFSA"). Unrestricted equity is calculated on a consolidated group account basis and on a parent account basis. Differences between the two include but are not limited to accounting for goodwill, subsidiaries (with parent accounts stated at original foreign exchange rates), taxes and pensions. Sirius International's ability to pay dividends is limited to the "lower of" unrestricted equity as calculated within the group and parent accounts. As of December 31, 2018, Sirius International had $373 million (based on the December 31, 2018 SEK to USD exchange rate) of unrestricted equity on a parent account basis (the lower of the two approaches) available to pay dividends in 2019. The amount of dividends available to be paid by Sirius International in any given year is also subject to cash flow and earnings generated by Sirius International's business, the maintenance of adequate solvency capital ratios for Sirius International and the consolidated Sirius International UK Holdings Ltd. group, as well as dividends received from its subsidiaries, including Sirius America. Earnings generated by Sirius International's business that are allocated to the Safety Reserve are not available to pay dividends (see "Safety Reserve" below). For the ~~six~~nine months ended ~~June~~September 30, 2019, Sirius International did not declare a dividend and paid an insignificant amount of dividends declared in 2017.

Under the normal course of business, Sirius America has the ability to pay dividends to its immediate parent during any twelve-month period without the prior approval of regulatory authorities in an amount set by a formula based on the lesser of net investment income, as defined by statute, or 10% of statutory surplus, in both cases as most recently reported to regulatory authorities, subject to the availability of earned surplus and subject to dividends paid in prior periods. Based on this formula, Sirius America has ordinary dividend capacity as of ~~June~~September 30, 2019, without prior regulatory approval. As of December 31, 2018, Sirius America had $522 million of statutory surplus and $108 million of earned surplus. For the ~~six~~nine months ended ~~June~~September 30, 2019, Sirius America did not pay any dividends to its immediate parent.

For the ~~six~~nine months ended ~~June~~September 30, 2019, Sirius Group did not pay any dividends. As of ~~June~~September 30, 2019, Sirius Group had ~~$76~~$62 million of net unrestricted cash, short-term investments, and fixed maturity investments outside of its regulated and unregulated insurance and reinsurance operating subsidiaries.

Effective August 27, 2019, the capital maintenance agreement between Sirius International and Sirius America, which ~~obligates~~obligated Sirius International to make contributions to Sirius America's surplus in order for Sirius America to maintain surplus equal to at least 125% of the company action level risk-based capital as defined in the National Association of Insurance Commissioners' Property/Casualty Risk-Based Capital ~~Report.~~Report was terminated. The agreement ~~provides~~provided for a maximum contribution to Sirius America of $200 million. ~~For the six months ended June 30, 2019,~~ Sirius International did not make any contributions to the surplus of Sirius ~~America.~~

America up to and including the termination date.

Subject to certain limitations under Swedish law, Sirius International is permitted to transfer pre-tax income amounts into ~~an untaxed~~a reserve referred to as a "Safety Reserve." As of ~~June~~September 30, 2019, Sirius International's Safety Reserve amounted to SEK 10.7 billion, or ~~$1.2~~$1.1 billion (based on the ~~June~~September 30, 2019 SEK to USD exchange rate). Under GAAP, an amount equal to the Safety Reserve, net of a related deferred tax liability established at the Swedish tax rate, is classified as common shareholders' equity. Generally, this deferred tax liability ($224 million based on the September 30, 2019 SEK to USD exchange rate) is only required to be paid by Sirius International if it fails to maintain prescribed levels of premium writings and loss reserves in future years. As a result of the indefinite deferral of these taxes, Swedish regulatory authorities apply no taxes to the Safety Reserve when calculating solvency capital under Swedish insurance regulations.

Pursuant to tax legislation enacted in Sweden in June 2018, the tax rate applicable to Swedish corporations decreased to 21.4% effective as of January 1, 2019, and then will further reduce to 20.6% starting in 2021. The tax legislation also introduced a permanent tax on the Safety Reserve effective as of January 1, 2019. This provision adds additional taxable income for the Company annually. The calculation applies the Government Borrowing Rate (with a floor rate of +0.5%) to the Safety Reserve balance at the beginning of the year. At the current year tax rate of 21.4 %, the additional tax expense for 2019 is SEK 11 million, or $1 million (based on the September 30, 2019 SEK to USD exchange rate).

Further, the enacted legislation also included a new provision treating an amount equal to 6% of the Safety Reserve balance as of January 1, 2021, as additional taxable income in tax year 2021 only, subject to tax at the applicable 20.6% rate. Based on this new provision and Sirius International's ~~positive effect~~Safety Reserve balance as of ~~the decreased tax rate on the deferred tax liability is offset by~~December 31, 2018, Sirius International recorded an additional deferred tax liability as of December 31, 2018 in the amount of ~~$15~~SEK 132.1 million, ~~as of December 31, 2018.~~

or $14 million (based on the September 30, 2019 SEK to USD exchange rate).

Under local statutory requirements, an amount equal to the deferred tax liability on Sirius International's Safety Reserve ~~($251 million as of June 30, 2019)~~ is included in solvency capital. Access to the Safety Reserve is restricted to coverage of insurance and reinsurance losses and to coverage of a breach of the Solvency Capital Requirement. Access for any other purpose requires the approval of Swedish regulatory authorities. Similar to the approach taken by Swedish regulatory authorities, most major rating agencies generally include the ~~$1.2~~$1.1 billion balance of the Safety Reserve, without any provision for deferred taxes, in Sirius International's regulatory capital when assessing Sirius International and Sirius Group's financial strength. Subject to certain limitations under Swedish law, Sirius International is permitted to transfer certain portions of its pre-tax income to its Swedish parent companies to minimize taxes (referred to as a group contribution). For the ~~six~~nine months ended ~~June~~September 30, 2019, Sirius International did not transfer any of its 2019 pre-tax income via group contributions to its Swedish parent companies.

Insurance float is an important aspect of Sirius Group's insurance and reinsurance operations. Insurance float represents funds that an insurance or reinsurance company holds for a limited time. In an insurance or reinsurance operation, float arises because premiums are collected before losses are paid. This interval can extend over many years. During that time, the insurer or reinsurer invests the funds. When the premiums that an insurer or reinsurer collects do not cover the losses and expenses it eventually must pay, the result is an underwriting loss, which can be considered as the cost of insurance float.

Insurance float can increase in a number of ways, including through acquisitions of insurance and reinsurance operations, organic growth in existing insurance and reinsurance operations and recognition of losses that do not immediately cause a corresponding reduction in investment assets. Conversely, insurance float can decrease in a number of other ways, including sales of insurance and reinsurance operations, shrinking or runoff of existing insurance and reinsurance operations, the acquisition of operations that do not have substantial investment assets (e.g., an agency) and the recognition of gains that do not cause a corresponding increase in investment assets. It is Sirius Group's intention to generate low-cost float over time through a combination of acquisitions and organic growth in its existing insurance and reinsurance operations.

Certain operational leverage metrics can be measured with ratios that are calculated using insurance float. There are many activities that do not change the amount of insurance float at an insurance or reinsurance company but can have a significant impact on Sirius Group's operational leverage metrics. For example, investment gains and losses, foreign currency translation gains and losses, debt issuances and repurchases/repayments, common and preferred share issuances and repurchases and dividends paid to shareholders are all activities that do not change insurance float but can meaningfully impact operational leverage metrics that are calculated using insurance float.

The following table illustrates Sirius Group's consolidated insurance float position as of ~~June~~September 30, 2019 and December 31, 2018:



	Title of each class			Trading symbol	Name of each exchange on which registered
Common shares, par value $0.01 per share		SG	Nasdaq Global Select Market

				~~Page~~


~~Part I~~		~~Financial Information~~			1	Page
Part I	Financial Information	1
	Cautionary Note Regarding Forward-Looking Statements			1
Item 1.		Unaudited Consolidated Financial Statements	2
		3
		Consolidated Balance Sheets at ~~June~~September 30, 2019 and December 31, 2018	2
		3
		Consolidated Statements of Income for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018	3
		4
		Consolidated Statements of Comprehensive Income for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018	4
		5
		Consolidated Statements of Shareholders' Equity for the three and ~~six~~nine months ended ~~June~~September 30, 2019 and 2018	5
		6
		Consolidated Statements of Cash Flows for the ~~six~~nine months ended ~~June~~September 30, 2019 and 2018	6
		7
		Notes to Consolidated Financial Statements			87
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations			5246
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			8376
Item 4.		Controls and Procedures			8476
Part II		Other Information			8577
Item 1.		Legal Proceedings			8577
Item 1A.		Risk Factors			8677
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			8979
Item 3.		Defaults Upon Senior Securities			9079
Item 4.		Mine Safety Disclosures	79
Item 5.	Other Information	79
Item 6.	Exhibits	80
	Signatures	9181
~~Item 5.~~		~~Other Information~~			92
~~Item 6.~~		~~Exhibits~~			93
		~~Signatures~~			94


		Six months ended June 30,					Nine months ended September 30,
(Expressed in millions of U.S. dollars)		2019			2018		2019			2018

Cash flows from operations:
Net income	$	112.3		$	141.5		$	104.7		$	113.8
Adjustments to reconcile net income to net cash provided from operations:
Net realized and unrealized investment (gains)		(114.1	)		(44.7	)	(183.3		)	(37.0		)
Amortization of premium on fixed maturity investments		(3.2	)		5.6		(4.7		)	5.9
Amortization of intangible assets		7.9			7.9		11.8			11.8
Depreciation and other amortization		4.3			4.8		6.3			7.1
Share-based compensation		4.5			-		7.9			—
Other operating items:
Net change in loss and loss adjustment expense reserves		46.6			18.6		274.1			76.1
Net change in reinsurance recoverable on paid and unpaid losses		(36.0	)		(69.1	)	(82.0		)	(69.7		)
Net change in funds held by ceding companies		(54.7	)		(18.9	)	(61.5		)	(40.9		)
Net change in unearned insurance and reinsurance premiums		252.6			348.1		212.4			311.8
Net change in ceded reinsurance payable		50.4			141.1		73.3			113.0
Net change in ceded unearned insurance and reinsurance premiums		(35.8	)		(123.4	)	(32.4		)	(106.3		)
Net change in insurance and reinsurance premiums receivable		(252.0	)		(320.0	)	(269.4		)	(271.9		)
Net change in deferred acquisition costs		(20.2	)		(38.2	)	(22.5		)	(39.2		)
Net change in funds held under reinsurance treaties		18.4			4.7		33.1			37.1
Net change in current and deferred income taxes, net		4.2			50.5		(4.8		)	38.6
Net change in other assets and liabilities, net		29.8			(73.5	)	24.9			(42.9		)

Net cash provided from operations		15.0			35.0		87.9			107.3

Cash flows from investing activities:
Net change in short-term investments		(160.2	)		(218.6	)	(285.8		)	(157.6		)
Sales of fixed maturities and convertible fixed maturity investments		241.9			945.0		430.7			1,149.9
Maturities, calls, and paydowns of fixed maturity and convertible fixed maturity investments		154.7			58.0		239.4			69.0
Sales of common equity securities		152.2			189.0		212.6			247.9
Distributions and redemptions of other long-term investments		33.6			60.2
Distributions, redemptions, and maturities of other long-term investments							53.6			62.1
Contributions to other long-term investments		(41.3	)		(94.8	)	(46.5		)	(131.3		)
Purchases of common equity securities		(125.8	)		(317.3	)	(174.9		)	(392.4		)
Purchases of fixed maturities and convertible fixed maturity investments		(270.9	)		(753.2	)	(504.4		)	(1,062.9		)
Purchases of consolidated subsidiaries, net of cash acquired							—			(7.9		)
Net change in unsettled investment purchases and sales		2.4			6.7		23.7			18.6
Other, net		0.6			(1.7	)	0.8			(3.4		)

Net cash (used for) investing activities		(12.8	)		(126.7	)	(50.8		)	(208.0		)

Cash flows from financing activities:
Change in collateral held on Interest Rate Cap		(0.1	)		-		(0.1		)	—
Capital contribution from former parent		-			1.4		—			1.4

Net cash (used for) provided from financing activities		(0.1	)		1.4		(0.1		)	1.4

Effect of exchange rate changes on cash		(3.8	)		(10.3	)	(9.4		)	(9.8		)
Net (decrease) in cash during period		(1.7	)		(100.6	)	27.6			(109.1		)
Cash and restricted cash balance at beginning of period		132.2			230.6		132.2			230.6
Cash and restricted cash balance at end of period	$	130.5		$	130.0		$	159.8		$	121.5


(Expressed in millions of U.S. dollars, except share information)		June 30, 2019			December 31, 2018		September 30, 2019			December 31, 2018

	Unaudited						Unaudited
Assets
Fixed maturity investments, trading, at fair value (Amortized cost 2019: $1,774.2; 2018: $1,952.9)	$	1,815.7		$	1,949.2
Short-term investments, at fair value (Amortized cost 2019: $881.3; 2018: $716.1)		882.9			715.5
Equity securities, trading, at fair value (Cost 2019: $376.2; 2018: $409.4)		387.8			380.0
Other long-term investments, at fair value (Cost 2019: $349.9; 2018: $337.6)		379.9			365.0
Fixed maturity investments, trading, at fair value (Amortized cost 2019: $1,702.1; 2018: $1,952.9)							$	1,771.4		$	1,949.2
Short-term investments, at fair value (Amortized cost 2019: $981.5; 2018: $716.1)							989.3			715.5
Equity securities, trading, at fair value (Cost 2019: $359.4; 2018: $409.4)							384.3			380.0
Other long-term investments, at fair value (Cost 2019: $332.6; 2018: $337.6)							368.4			365.0
Cash		116.8			119.4		145.8			119.4
Restricted cash		13.7			12.8		14.0			12.8

Total investments and cash		3,596.8			3,541.9		3,673.2			3,541.9
Accrued investment income		13.3			14.1		11.5			14.1
Insurance and reinsurance premiums receivable		861.3			630.6		842.6			630.6
Reinsurance recoverable on unpaid losses		357.4			350.2		392.9			350.2
Reinsurance recoverable on paid losses		69.8			55.0		55.2			55.0
Funds held by ceding companies		237.6			186.8		236.8			186.8
Ceded unearned insurance and reinsurance premiums		188.1			159.8		173.8			159.8
Deferred acquisition costs		158.8			141.6		155.2			141.6
Deferred tax asset		174.4			202.5		162.8			202.5
Accounts receivable on unsettled investment sales		2.0			5.0		12.9			5.0
Goodwill		400.6			400.6		400.4			400.6
Intangible assets		187.7			195.6		183.8			195.6
Other assets		171.4			124.0		164.0			124.0

Total assets	$	6,419.2		$	6,007.7		$	6,465.1		$	6,007.7



Liabilities
Loss and loss adjustment expense reserves	$	2,023.3		$	2,016.7		$	2,186.4		$	2,016.7
Unearned insurance and reinsurance premiums		879.5			647.2		807.7			647.2
Ceded reinsurance payable		256.9			206.9		250.4			206.9
Funds held under reinsurance treaties		126.6			110.6		135.9			110.6
Deferred tax liability		229.7			237.4		208.6			237.4
Debt		685.9			696.8		670.3			696.8
Accounts payable on unsettled investment purchases		2.6			3.2		34.7			3.2
Other liabilities		186.3			150.5		189.1			150.5

Total liabilities		4,390.8			4,069.3		4,483.1			4,069.3
Commitments and contingencies (see Note 18)
Mezzanine equity
Series B preference shares		241.3			232.2		236.0			232.2

Common shareholders' equity
Common shares (shares issued and outstanding, 2019: 115,296,918; 2018: 115,151,251)		1.2			1.2
Common shares (shares issued and outstanding, 2019: 115,299,342; 2018: 115,151,251)							1.2			1.2
Additional paid-in surplus		1,093.5			1,089.1		1,097.0			1,089.1
Retained earnings		918.5			816.6		915.8			816.6
Accumulated other comprehensive (loss)		(229.1	)		(202.4	)	(271.4		)	(202.4		)

Total common shareholders' equity		1,784.1			1,704.5		1,742.6			1,704.5
Non-controlling interests		3.0			1.7		3.4			1.7

Total equity		1,787.1			1,706.2		1,746.0			1,706.2

Total liabilities, mezzanine equity, and equity	$	6,419.2		$	6,007.7		$	6,465.1		$	6,007.7


		Three months ended June 30,						Six months ended June 30,					Three months ended September 30,						Nine months ended September 30,
(Expressed in millions of U.S. dollars, except share and per share information)		2019			2018			2019			2018		2019			2018			2019			2018

Revenues
Net earned insurance and reinsurance premiums	$	370.7		$	308.9		$	682.6		$	593.4		$	374.2		$	321.1		$	1,056.8		$	914.5
Net investment income		24.4			19.2			44.5			30.0		22.8			21.8			67.3			51.8
Net realized investment gains		15.6			7.8			24.6			4.1		15.3			3.9			39.9			8.0
Net unrealized investment gains		15.5			24.7			89.5			40.7
Net foreign exchange (losses) gains		(0.6	)		25.6			4.5			22.1
Net unrealized investment gains (losses)													53.9			(11.7		)	143.4			29.0
Net foreign exchange gains (losses)													4.9			(0.4		)	9.4			21.7
Other revenue		15.4			55.6			35.0			79.0		16.3			17.0			51.3			96.0

Total revenues		441.0			441.8			880.7			769.3		487.4			351.7			1,368.1			1,121.0

Expenses
Loss and loss adjustment expenses		278.0			151.4			461.9			292.4		348.6			260.4			810.5			552.8
Insurance and reinsurance acquisition expenses		77.0			66.8			140.3			129.8		75.1			59.2			215.4			189.0
Other underwriting expenses		35.5			38.2			70.8			81.4		35.4			35.7			106.2			117.1
General and administrative expenses		28.2			24.2			52.6			38.5		28.0			19.5			80.6			58.0
Intangible asset amortization expenses		4.0			4.0			7.9			7.9		3.9			3.9			11.8			11.8
Interest expense on debt		8.0			7.8			15.6			15.5		7.7			7.6			23.3			23.1

Total expenses		430.7			292.4			749.1			565.5		498.7			386.3			1,247.8			951.8

Pre-tax income		10.3			149.4			131.6			203.8
Income tax expense		(2.1	)		(51.2	)		(19.3	)		(62.3	)

Net income		8.2			98.2			112.3			141.5
Pre-tax (loss) income													(11.3		)	(34.6		)	120.3			169.2
Income tax benefit (expense)													3.7			6.9			(15.6		)	(55.4		)
Net income (loss)													(7.6		)	(27.7		)	104.7			113.8
Income attributable to non-controlling interests		(0.8	)		(0.4	)		(1.2	)		(0.6	)	(0.4		)	(0.3		)	(1.6		)	(0.9		)

Income attributable to Sirius Group		7.4			97.8			111.1			140.9

(Loss) income attributable to Sirius Group													(8.0		)	(28.0		)	103.1			112.9
Change in carrying value of Series B preference shares		(0.8	)		-			(9.2	)		-		5.3			—			(3.9		)	—
Accrued dividends on Series A redeemable preference shares		-			-			-			(2.6	)	—			—			—			(2.6		)

Net income attributable to Sirius Group's common shareholders	$	6.6		$	97.8		$	101.9		$	138.3



Net income per common share and common share equivalent
Net (loss) income attributable to Sirius Group's common shareholders													$	(2.7	)	$	(28.0	)	$	99.2		$	110.3
Net (loss) income per common share and common share equivalent
Basic earnings per common share and common share equivalent	$	0.05		$	0.78		$	0.80		$	1.11		$	(0.02	)	$	(0.23	)	$	0.78		$	0.88
Diluted earnings per common share and common share equivalent	$	0.05		$	0.78		$	0.80		$	1.11		$	(0.06	)	$	(0.23	)	$	0.78		$	0.88
Weighted average number of common shares and common share equivalents outstanding:
Basic weighted average number of common shares and common share equivalents outstanding		115,243,685			120,000,000			115,212,772			120,000,000		115,251,853			120,000,000			115,225,942			120,000,000
Diluted weighted average number of common shares and common share equivalents outstanding		115,796,367			120,000,000			127,542,402			120,000,000		127,153,523			120,000,000			115,619,222			120,000,000



		Notice Period

Redemption Frequency (Millions)		30-59 days notice		60-89 days notice		90-119 days notice		120+ days notice		Total

Monthly	$	-	$	32.3	$	-	$	-	$	32.3
Quarterly		0.8		-		-		-		0.8
Semi-annual		-		0.7		-		-		0.7
Annual		-		15.4		50.4		20.8		86.6

Total	$	0.8	$	48.4	$	50.4	$	20.8	$	120.4



(Millions)		For the three months ended June 30, 2019		For the three months ended June 30, 2018

Non-controlling interests, beginning of the period	$	2.2	$	0.5
Net income attributable to non-controlling interests		0.8		0.4
Other, net		-		0.1

Non-controlling interests, end of the period	$	3.0	$	1.0



(Millions)		For the six months ended June 30, 2019		For the six months ended June 30, 2018

Non-controlling interests, beginning of the period	$	1.7	$	0.2
Net income attributable to non-controlling interests		1.2		0.6
Other, net		0.1		0.2

Non-controlling interests, end of the period	$	3.0	$	1.0



				Maximum Exposure to Loss

(Millions)		Total VIE Assets		On-Balance Sheet		Off-Balance Sheet		Total

June 30, 2019
Other long-term investments⁽¹⁾	$	266.3	$	120.2	$	18.3	$	138.5

Total at June 30, 2019	$	266.3	$	120.2	$	18.3	$	138.5



December 31, 2018
Other long-term investments⁽¹⁾	$	209.1	$	103.1	$	32.0	$	135.1

Total at December 31, 2018	$	209.1	$	103.1	$	32.0	$	135.1



(Millions)		Future Payments

2019	$	5.0
2020		9.2
2021		7.9
2022		7.0
2023		4.3
2024 and after		2.8

Total future annual minimum rental payments as at June 30, 2019		36.2
Less: present value discount		(2.7	)

Total lease liability as at June 30, 2019	$	33.5



	Page
Overview		47
~~Overview~~	52
Executive Summary	5348
Consolidated Results of Operations – Three Months and ~~Six~~Nine Months Ended ~~June~~September 30, 2019 and 2018	5551
Summary of Investment Results	5854
Foreign Currency Translation	6156
Results of Reportable Segments	6358
Global Property	6358
Global A&H	6661
Specialty & Casualty	6862
Runoff & Other	7065
Reinsurance Protection	7166
Non-GAAP Financial Measures	7367
Liquidity and Capital Resources	7569
Off Balance Sheet Arrangements	8074
Contractual Obligations and Commitments	8074
Cash Flows	8174
Summary of Critical Accounting Estimates	8276



		Three Months Ended June 30,						Six Months Ended June 30,

(Millions)		2019			2018			2019			2018

Net realized investment gains - foreign currency⁽¹⁾	$	9.6		$	7.1		$	20.5		$	6.0
Net unrealized investment (losses) gains - foreign currency⁽²⁾		(7.2	)		29.7			17.8			48.6

Net realized and unrealized investment gains - foreign currency		2.4			36.8			38.3			54.6
Net foreign exchange gains - foreign currency translation gains⁽³⁾		0.9			21.5			5.0			19.4
Net foreign exchange gains - currency swaps⁽³⁾		1.4			4.3			2.4			3.0
Net foreign exchange (losses) - currency forwards⁽³⁾		(3.0	)		-			(3.0	)		-
Net foreign exchange (losses) - other⁽³⁾		-			(0.1	)		-			(0.2	)
Income tax benefit (expense)		1.1			-			0.9			(0.5	)

Total foreign currency remeasurement gains recognized through net income, after tax		2.8			62.5			43.6			76.3
Change in foreign currency translation on investments recognized through other comprehensive income, after tax		(0.1	)		(78.6	)		(41.8	)		(99.0	)
Change in foreign currency translation on non - investment net liabilities recognized through other comprehensive income, after tax		1.2			30.1			15.1			37.1

Total foreign currency translation gains (losses) recognized through other comprehensive income, after tax		1.1			(48.5	)		(26.7	)		(61.9	)

Total foreign currency gains recognized in comprehensive income, after tax	$	3.9		$	14.0		$	16.9		$	14.4



		Three months ended June 30,						Six months ended June 30,

Global Property(Millions)		2019			2018			2019			2018

Gross written premiums	$	236.2		$	325.4		$	566.9		$	672.0
Net written premiums		191.6			177.0			432.9			424.2
Net earned insurance and reinsurance premiums		164.3			167.5			304.0			303.6
Loss and allocated LAE		(131.3	)		(68.2	)		(193.9	)		(138.6	)
Insurance and reinsurance acquisition expenses		(27.2	)		(34.1	)		(53.0	)		(63.4	)

Technical profit	$	5.8		$	65.2		$	57.1		$	101.6

Unallocated LAE		(2.6	)		(2.5	)		(4.7	)		(4.4	)
Other underwriting expenses		(17.0	)		(18.1	)		(33.2	)		(35.5	)

Underwriting (loss) income	$	(13.8	)	$	44.6		$	19.2		$	61.7



Ratios:
Loss ratio⁽¹⁾		81.5	%		42.2	%		65.3	%		47.1	%
Acquisition expense ratio⁽²⁾		16.6	%		20.4	%		17.4	%		20.9	%
Other underwriting expense ratio⁽³⁾		10.3	%		10.8	%		10.9	%		11.7	%

Combined ratio⁽⁴⁾		108.4	%		73.4	%		93.6	%		79.7	%



		Three months ended June 30,				Six months ended June 30,

Global Property (*Millions*)		2019		2018		2019		2018

Other property	$	114.8	$	232.5	$	267.6	$	405.2
Property catastrophe excess		78.8		45.6		244.1		212.2
Agriculture		42.6		47.3		55.2		54.6

Total	$	236.2	$	325.4	$	566.9	$	672.0



	Three months ended June 30, 2019
	Global Property	Global A&H	Specialty & Casualty	Total

					Three months ended September 30, 2019
					Global Property	Global A&H	Specialty & Casualty	Total
Gross ratios:
Loss ratio	67.8%	59.7%	89.3%	71.0%	106.3%	56.2%	93.5%	88.7%
Acquisition expense ratio	20.4%	28.7%	26.4%	22.1%	19.6%	26.8%	26.4%	20.5%
Other underwriting expense ratio	7.8%	3.8%	6.8%	7.5%	6.6%	4.6%	8.3%	7.4%

Gross Combined ratio	96.0%	92.2%	122.5%	100.6%	132.5%	87.6%	128.2%	116.6%



Ceded ratios:
Loss ratio	26.6%	51.7%	220.8%	56.4%	74.3%	53.3%	138.9%	72.7%
Acquisition expense ratio	32.1%	23.7%	11.8%	26.9%	23.2%	21.9%	15.3%	22.2%

Ceded Combined ratio	58.7%	75.4%	232.6%	83.3%	97.5%	75.2%	154.2%	94.9%



Net ratios:
Loss ratio	81.5%	62.1%	72.7%	75.0%	118.8%	57.0%	89.7%	93.2%
Acquisition expense ratio	16.6%	30.3%	28.2%	20.8%	18.3%	28.2%	27.5%	20.1%
Other underwriting expense ratio	10.3%	5.0%	7.7%	9.6%	9.2%	5.9%	8.9%	9.5%

Net Combined ratio	108.4%	97.4%	108.6%	105.4%	146.3%	91.1%	126.1%	122.8%



	Six months ended June 30, 2019
	Global Property	Global A&H	Specialty & Casualty	Total

					Nine months ended September 30, 2019
					Global Property	Global A&H	Specialty & Casualty	Total
Gross ratios:
Loss ratio	56.1%	64.6%	76.7%	64.4%	73.5%	61.7%	83.0%	72.9%
Acquisition expense ratio	21.4%	27.5%	25.8%	21.9%	20.8%	27.3%	26.1%	21.4%
Other underwriting expense ratio	8.0%	4.2%	8.3%	8.0%	7.5%	4.3%	8.3%	7.8%

Gross Combined ratio	85.5%	96.3%	110.8%	94.3%	101.8%	93.3%	117.4%	102.1%



Ceded ratios:
Loss ratio	30.8%	65.2%	147.4%	52.9%	46.3%	61.2%	144.7%	59.8%
Acquisition expense ratio	32.1%	22.4%	8.1%	26.7%	28.9%	22.3%	10.5%	25.1%

Ceded Combined ratio	62.9%	87.6%	155.5%	79.6%	75.2%	83.5%	155.2%	84.9%



Net ratios:
Loss ratio	65.3%	64.4%	69.3%	67.7%	83.7%	61.8%	77.0%	76.7%
Acquisition expense ratio	17.4%	29.1%	27.7%	20.6%	17.7%	28.8%	27.6%	20.4%
Other underwriting expense ratio	10.9%	5.6%	9.1%	10.4%	10.3%	5.7%	9.1%	10.0%

Net Combined ratio	93.6%	99.1%	106.1%	98.7%	111.7%	96.3%	113.7%	107.1%



		Three months ended June 30,						Six months ended June 30,
(Expressed in Millions)		2019			2018			2019			2018

Net income attributable to common shareholders	$	6.6		$	97.8		$	101.9		$	138.3
Adjustment for net realized and unrealized gains on investments		(31.1	)		(32.5	)		(114.1	)		(44.8	)
Adjustment for net foreign exchange gains		-			(25.6	)		(5.1	)		(22.1	)
Adjustment for income tax expense⁽¹⁾		5.1			0.8			16.8			-

Operating (loss) income attributable to common shareholders	$	(19.4	)	$	40.5		$	(0.5	)	$	71.4



		Six Months Ended
(Millions)		June 30, 2019			June 30, 2018

Net cash provided from (used for)⁽¹⁾
Operations	$	15.0		$	35.0
Investing activities		(12.8	)		(126.7	)
Financing activities		(0.1	)		1.4
Effect of exchange rate changes on cash		(3.8	)		(10.3	)

(Decrease) increase in cash during year	$	(1.7	)	$	(100.6	)



	Nine months ended
(Millions)	September 30, 2019			September 30, 2018
Net cash provided from (used for)⁽¹⁾
Operations	$	87.9		$	107.3
Investing activities	(50.8		)	(208.0		)
Financing activities	(0.1		)	1.4
Effect of exchange rate changes on cash	(9.4		)	(9.8		)
Increase (decrease) in cash during year	$	27.6		$	(109.1	)



	3.1		Memorandum of Association of Sirius International Insurance Group, Ltd, as amended. (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K filed by Sirius International Insurance Group, Ltd. on March 14, 2019).

3.2		Bye-Laws of Sirius International Insurance Group, Ltd. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed by Sirius International Insurance Group, Ltd. on November 6, 2018).

3.3		Certificate of Designation of Series B Preference Shares of Sirius International Insurance Group, Ltd. (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed by Sirius International Insurance Group, Ltd. on November 6, 2018).
		~~31.1~~
10.1		Supplemental Indenture, dated as of October 28, 2019, between Sirius International Group, Ltd. and The Bank of New York Mellon, as trustee relating to the First Supplemental Indenture, dated as of November 1, 2016 in regards to the 4.600% Senior Notes due 2026 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed by Sirius International Insurance Group, Ltd. on October 28, 2019).

31.1		Certification of Kernan "Kip" V. Oberting, Chief Executive Officer of Sirius International Insurance Group, Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.

31.2		Certification of Ralph Salamone, Chief Financial Officer of Sirius International Insurance Group, Ltd., pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.

32.1		Certification of Kernan "Kip" V. Oberting, Chief Executive Officer of Sirius International Insurance Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Ralph Salamone, Chief Financial Officer of Sirius International Insurance Group, Ltd., pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document



			SIRIUS INTERNATIONAL INSURANCE GROUP, LTD. (Registrant)

Date: ~~August 9,~~November 8, 2019	By:	~~By:~~		/s/KERNAN "KIP" V. OBERTING
		Kernan "Kip" V. Oberting President and Chief Executive Officer (Principal Executive Officer)

Date: ~~August 9,~~November 8, 2019	By:	~~By:~~		/s/ RALPH A. SALAMONE
		Ralph A. Salamone Chief Financial Officer (Principal Financial Officer & Principal Accounting Officer)