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RELATED PARTY TRANSACTIONS | 12 Months Ended
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Dec. 31, 2024
Related Party Transactions [Abstract] |
RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONS Related Party Transactions with Stone Point Capital, LLC ("Stone Point") A member of the Company’s Board of Directors, Mr. Charles Davis, is the Chief Executive Officer of Stone Point Capital, LLC ("Stone Point"). In the ordinary course of business, the Company engages SKY Harbor Capital Management, LLC, which is majority-owned by Stone Point's private equity fund Trident V, L.P. ("Trident V"), to provide asset management services for certain high yield debt portfolios. For the year ended December 31, 2024, total fees paid to SKY Harbor Capital Management, LLC, were $3 million (2023: $3 million; 2022: $2 million). In addition, the Company has an investment of $3 million (2023: $17 million) in the Freedom Consumer Credit Fund, LLC - Series B. The manager of this fund is Freedom Financial Asset Management, LLC ("Freedom") which is an indirect subsidiary of Pantheon Partners, LLC ("Pantheon"). A Stone Point private equity fund, Trident VI, L.P. ("Trident VI") owns approximately 14.5% of Pantheon. For the year ended December 31, 2024, fees paid to Freedom were $nil (2023: $1 million; 2022: $2 million). The Company has an investment of $92 million (2023: $87 million) in Stone Point's private equity fund, Trident VIII, L.P. ("Trident VIII") and co-investments of $30 million (2023: $26 million) with Trident VIII. For the year ended December 31, 2024, fees paid to Stone Point in relation to Trident VIII were $4 million (2023: $2 million; 2022: $2 million). The Company has an investment of $39 million (2023: $24 million) in Stone Point's private equity fund, Trident IX, L.P. ("Trident IX"). For the year ended December 31, 2024, fees paid to Stone Point in relation to Trident IX were $3 million (2023: $1 million; 2022: $1 million). The Company has an investment of $48 million (2023: $43 million) with Rialto Real Estate IV-Property ("Rialto") and co-investments of $23 million (2023: $19 million) with Rialto, a fund managed by a portfolio company of Stone Point's private equity fund, Trident VII, L.P. ("Trident VII"). For the year ended December 31, 2024, fees paid to Rialto were $2 million (2023: $2 million; 2022: $2 million). The Company has an investment of $18 million (2023: $18 million) in Stone Point Credit Corporation. For the year ended December 31, 2024, fees paid to Stone Point in relation to Stone Point Credit Corporation were $0.5 million (2023: $0.5 million; 2022: $0.3 million). The Company has an investment of $18 million (2023: $18 million) in Stone Point Credit Corporation bonds. For the year ended December 31, 2024, the Company earned income of $1 million (2023: $1 million; 2022: $0.6 million) in relation to this bond. The Company has an investment of $7 million (2023: $7 million) in a loan to Eagle Point Credit Management LLC ("Eagle Point"), which is majority-owned by Trident IX. For the year ended December 31, 2024, the Company earned income of $0.7 million (2023: $0.5 million) in relation to this loan. The Company has an investment of $6 million (2023: $6 million) in cumulative preferred shares of Aspida Holdings Ltd. ("Aspida"). The investment was syndicated to the Company by Stone Point Credit Corporation. For the year ended December 31, 2024 and 2023, the Company did not pay any fees to Aspida. The Company has an investment of $43 million (2023: $22 million) in Monarch Point Re (refer to Note 5 'Investments'), a newly created collateralized reinsurer which is jointly sponsored by the Company and Stone Point Credit Adviser LLC. For the year ended December 31, 2024, fees paid by Monarch Point Re to Stone Point Credit Adviser LLC were $1 million (2023: $0.1 million). At December 31, 2023, the Company had an investment of $5 million in a syndicated accounts receivable loan for which Sound Point Capital Management LP ("Sound Point"), an affiliate of Stone Point, was the lead originator. For the year ended December 31, 2023, the Company did not pay any fees to Sound Point. At December 31, 2023, the Company had co-investments of $9 million with Gordon Brothers, which is majority-owned by Trident VII. For the year ended December 31, 2023, fees paid to Gordon Brothers were $0.1 million (2022: $0.1 million). Commitments At December 31, 2024, the Company had up to $25 million of unfunded commitments to Stone Point's private equity fund, Trident X L.P. ("Trident X"). At December 31, 2024, the Company had up to $60 million of unfunded commitments to a separately managed account ("SMA) that will be managed by Stone Point Credit LLC. Stock Repurchase Agreement with Stone Point On February 3, 2025, the Company entered into a stock repurchase agreement (the "Repurchase Agreement") with T-VIII PubOpps LP ("T8"), an investment vehicle managed by Stone Point, pursuant to which T8 agreed to sell 2,234,636 shares to the Company for an aggregate price of approximately $200 million (the "Repurchase"). Loss Portfolio Transfer Reinsurance Agreement with Enstar On December 13, 2024, the Company entered into a loss portfolio transfer reinsurance agreement with Cavello Bay Reinsurance Limited, a wholly-owned subsidiary of Enstar Group Limited ("Enstar") to retrocede a portfolio of reinsurance business (refer to Note 19 'Reinsurance' for further details). Stone Point serves as the manager of Trident V, L.P., Trident V Parallel Fund, L.P. and Trident V Professionals Fund, L.P. (collectively, "Trident V Funds"), that indirectly held an aggregate ownership interest of approximately 9.5% in Enstar at December 31, 2024. Retrocession Agreement with Monarch Point Re On September 22, 2023 (the "closing date"), the Company entered into an agreement, with an effective date of January 1, 2023, to retrocede a diversified portfolio of casualty reinsurance business to Monarch Point Re. The agreement covers losses both on a prospective basis and on a retroactive basis. Therefore, the Company has bifurcated the prospective and retroactive elements of the agreement and is accounting for each element separately. Retroactive element Reinsurance premiums of $119 million were allocated to the retroactive element of the agreement which was deemed to have met the established criteria for retroactive reinsurance accounting. At the closing date, the Company recognized acquisition costs of $33 million and a loss expense of $7 million in the consolidated statement of operations associated with the retroactive element of the agreement. In addition, the Company recognized reinsurance recoverable on unpaid losses of $76 million and reinsurance recoverable on paid losses of $4 million in the consolidated balance sheets associated with the retroactive element of the agreement (refer to Note 8 'Reserve for Losses and Loss Expenses'). Prospective element For the year ended December 31, 2024, the Company ceded reinsurance premiums of $323 million (2023: $287 million) and ceded losses of $214 million (2023: $37 million) to Monarch Point Re. In addition, Monarch Point Re paid certain acquisition costs and administrative fees to the Company. At December 31, 2024, the amount of reinsurance recoverable on unpaid and paid losses was $246 million (2023: $37 million) and the amount of ceded reinsurance payable included in insurance and reinsurance balances payable was $226 million (2023: $166 million) in the consolidated balance sheets. This transaction was conducted at market rates consistent with negotiated arms-length contracts. Loan to Monarch Point Re During 2024, the Company advanced $253 million (2023: $297 million) to Monarch Point Re. These loans will be repaid in a manner consistent with the timing of amounts due to Monarch Point Re under retrocession agreements. At December 31, 2024, an amount of $236 million (2023: $72 million) was repaid and was treated as a non-cash activity in the consolidated statement of cash flows. These loans are expected to be repaid in full by May 15, 2026. The loan balance receivable at December 31, 2024 of $243 million (2023: $225 million) is included in loan advances made in the consolidated balance sheets. At December 31, 2024, the Company had committed to advance a further $nil (2023: $16 million) to Monarch Point Re. Interest on this loan is payable for this period at an interest rate of 4.7% and 5.5% (2023: interest rates between 5.7% and 5.9%). Interest related to this loan of $7 million (2023: $9 million) was received in advance and is included in other liabilities in the consolidated balance sheets. Significant Influence considerations The Company's investment portfolio includes certain investments where it is considered to have the ability to exercise significant influence over the operating and financial policies of the investee. Significant influence is generally deemed to exist where the Company has an investment of 20% or more in the common stock of a corporation or an investment greater than 3% to 5% in closed end funds, limited partnerships, LLCs or similar investment vehicles. At December 31, 2024, the Company h as $448 million (2023: $424 million) of investments where it is deemed to have the ability to exercise such significant influence. The Company generally pays management and performance fees to the investment managers of these investments. The Company considers all fees paid to the investment managers to be at market rates consistent with negotiated arms-length contracts. Retrocession Agreement with Harrington Re Harrington and Harrington Re commenced operations in 2016 (refer to Note 5 'Investments'). The Company has the ability to exercise significant influence over the operating and financial policies of Harrington and Harrington Re. In the normal course of business, the Company enters into certain reinsurance transactions with Harrington Re. For the year ended December 31, 2024, the Company ceded reinsurance premiums of $218 million (2023: $298 million; 2022: $324 million) and ceded losses of $197 million (2023: $229 million; 2022: $234 million) to Harrington Re. In addition, Harrington Re paid certain acquisition costs and administrative fees to the Company. At December 31, 2024, the amount of reinsurance recoverable on unpaid and paid losses was $884 million (2023: $933 million) and the amount of ceded reinsurance payable included in insurance and reinsurance balances payable was $181 million (2023: $219 million) in the consolidated balance sheets. This transaction was conducted at market rates consistent with negotiated arms-length contracts. During 2018, the Company entered into a quota share retrocessional agreement with Harrington Re which was deemed to have met the established criteria for retroactive reinsurance accounting. During 2024, the Company entered into a reinsurer novation and replacement agreement with Harrington Re and a third-party reinsurer with respect to this quota share retrocession contract. On June 29, 2021, the Company invested $10 million in 7.25% fixed to floating rate, senior unsecured notes ("Harrington Notes") due 2031, issued by Harrington. On June 29, 2024, the Harrington Notes were fully redeemed.

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