sirius international insurance corporation annual … · sirius america to our sister company...

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SIR

IUS

INTER

NATIO

NAL IN

SU

RAN

CE C

OR

POR

ATION

ANN

UAL R

EPOR

T 20

04

1

White Mountains – introducing our owners

White Mountains Insurance Group. Ltd.

(White Mountains or the Company) is

domiciled in Bermuda and is quoted on the

New York and Bermuda stock exchanges.

Market capitalization at December 31, 2004

was approximately $7 billion.

White Mountains is an insurance

holding company with business interests in

property and casualty insurance and

reinsurance. The Company conducts its

business through:

• White Mountains Re – global reinsurance.

• OneBeacon – specialty and segmented

personal and commercial property and

casualty primary insurance.

• Esurance – a direct marketer and under-

writer of personal auto insurance.

• White Mountains Advisors – investment

management with $34 billion of assets

under management.

At December 31, 2004, White Moun-

tains reported total assets of $19 billion.

Fully converted tangible book value totaled

$3.7 billion or $342.52 per share.

White Mountains Re Group, Ltd.

(White Mountains Re), a Bermuda hold-

ing company, was formed in April 2004 to

manage White Mountains’ global reinsur-

ance operations.

In addition to Sirius International the

group includes:

• Folksamerica Reinsurance Company

– a U.S.-based global multi-line

reinsurance company.

• White Mountains Underwriting Limited

– an Ireland-based underwriting

advisory company that specializes in

international property and marine

excess reinsurance.

White Mountains Re’s operating

companies offer lead capacity for most

property, casualty, accident & health,

marine, and aviation exposures. Each

company is committed to White Mountains’

core operating principle, “Underwriting

Comes First.” White Mountains Re main-

tains underwriting offices in Bermuda, New

York, Stockholm, Chicago, Connecticut,

Dublin, Hamburg, Liège, London, Miami,

Singapore, Toronto and Zurich. Business is

generated primarily through major reinsur-

ance brokers.

White Mountains Re’s principal rein-

surance operating subsidiaries are rated

“A” (Excellent) by A.M. Best, “A-“ (Strong)

with a positive outlook by Standard and

Poor’s, and “A3” (Good) with a positive

outlook by Moody’s Investors Service.

At December 31, 2004, White Moun-

tains Re had $1.7 billion in shareholder’s

equity and $1.2 billion in net written pre-

miums.

2 3

President’s report 2004

his is the first annual report

since Sirius International became

part of the White Mountains Group

in April, 2004. When we announced the

change of ownership, I expressed confi-

dence that it would be in the best interests

of Sirius and its customers. As well as a

new parent company, we were acquiring

a well-funded partner that shared our

uncompromising commitment to the

insurance and reinsurance business. This

year has fully justified such optimism.

Some highlights:

• Successful integration of Sirius Interna-

tional into the White Mountains Group;

• Statutory pre-tax profits up 77%;

• Statutory combined ratio of 93%;

• Solvency ratio of 184%;

• Extended service to clients;

• Positive ratings developments;

• Acquisition of Tryg-Baltica International;

• Purchase from White Mountains of Fund

American Re;

• Sale of Sirius America to Folksamerica.

2004 started in upbeat fashion, with rates

and terms still strong and demand buoyant.

We were able to exploit our exceptional

capitalization to extend our offer to clients,

providing larger limits and shares of risks

whilst writing higher aggregates.

It turned out to be an unprecedented

year for natural disasters. Four hurricanes

made landfall in the United States and ten

typhoons in Japan. Finally, of course, we

witnessed the terrible tsunami destruction

in the Indian Ocean. Sirius International

took its share of losses; the total financial

impact was worse for us even than Septem-

ber 11.

Nonetheless, with relatively few

claims from other sources, we turned in

T a statutory combined ratio of 93% and a

record technical profit. Once again, there-

fore, I am able to report that our under-

writing teams have outperformed the

market.

To complete the financial picture,

our investments showed creditable growth,

despite the declining dollar. The run-off

of Scandinavian Re, our Bermudan subsidi-

ary, produced a small dampener, pushing

the statutory combined ratio to 97% for the

Sirius Group as a whole. Nonetheless, our

overall group statutory pre-tax profit came

to $119 million – up 77%. It truly was a

successful trading year.

Changing with the times

During 2004 a reshuffle took place within

the White Mountains Group to maximize

synergies for the various subsidiaries. After

a brief, but fruitful partnership, we sold

Sirius America to our sister company

Folksamerica, and we were pleased to

acquire Fund American Re from White

Mountains.

Fund American Re’s teams in Stock-

holm and Singapore have joined our staff,

and we have renewed their business into

Sirius International. In an unrelated devel-

opment, we also acquired the Danish in-

surer Tryg-Baltica International, which has

gone into run-off whilst we serve some of

their former customers on a similar basis.

We have, meanwhile, taken on former

members of the Converium aviation team

in Zurich, which is now our global centre

of expertise for this type of business.

Finally, we took the decision to discontin-

ue our Financial Risks operation to concen-

trate resources into our main underwriting

areas. They remained profitable right to the

end, and I would like to record my thanks

to them for their work.

4 5

President’s Report 2004

GÖRAN THORSTENSSON

PRESIDENT & CEO

4 5

G Ö R A N T H O R S T E N S S O N

P R E S I D E N T & C E O

Ratings harden

With our acquisition by White Mountains

we experienced some strengthening in our

financial ratings. Moody’s upgraded Sirius

International to A3 (good) and assigned

a positive outlook, A.M. Best confirmed

our A (excellent) rating, whilst Standard &

Poor’s assigned a positive outlook to our

A- (strong) rating. With our strong capital

position and solid operating results we

hope to see further strengthening in our

ratings in the coming twelve months.

Looking forward with confidence

Over the past few years, Sirius International

has adapted to changing circumstances,

coming through a challenging period in

good shape. I would like to pay special

tribute to our staff for making this pos-

sible. It is a demanding job at the best of

times, and the additional pressures created

by the business environment post-9/11 and

then by the merger have been intense.

The company’s prospects are now

probably better than ever. That is not to

say we expect to achieve record profits

every year in this cyclical and volatile

business. 2005 looks to be more challenging,

with rates softening during the renewal

season. Nonetheless, there remain plenty

of opportunities to write business without

compromising our strict policy of writing

for profit. We look forward to 2005 and

beyond with confidence.

President’s Report 2004

6 7

Board of Directors’ Report

Sirius International Insurance Corporation

(publ)

Organisation number: 516401-8136

The Board of Directors and the

President of Sirius International hereby

submit their annual report for 2004.

Board of Directors’ Report


(publ) (Sirius International) is a wholly

owned subsidiary of Sirius Insurance

Holding Sweden AB (Sirius Insurance

Holding), which is owned by Fund

American Holdings AB, which is ultimately

owned by White Mountains

Insurance Group Ltd, Bermuda.

On December 9, 2003 an agreement

was signed between ABB Holding AG

and Fund American Holdings AB, a

subsidiary within the White Mountains

Insurance Group Ltd, regarding the

purchase of all the shares in ABB

Insurance Holding and its subsidiaries.

The transaction was completed on April

16, 2004. On October 6, 2004, an agree-

ment was signed between Tryg Forsikring

A/S and Sirius International regarding the

acquisition of all shares in Tryg Baltica

Forsikring, internationalt forsikringsselskab

A/S. The transaction was completed on

November 11, 2004, when the company’s

name was changed to Sirius (Denmark)

Forsikringsselskab A/S.

Group

The Group consists of Sirius International

Insurance Corporation (publ), Scandinavian

Reinsurance Company Ltd, Hamilton,

Bermuda (Scandinavian Re), Fund

American Reinsurance Company Ltd,

Hamilton, Bermuda (Fund American Re),

Fund American Management Company Ltd,

Bermuda, Sirius (Denmark) Forsikringssel-

skab A/S and Sirius Belgium Réassurances

S.A., Liège, Belgium.

After the change of owner Sirius

America Insurance Company, Delaware,

USA, was sold to another subsidiary. At the

same time Fund American Re was acquired

from another company within the White

Mountains group.

Sirius International has five offices

outside Sweden. These are: the branch

office in London – Sirius International

Insurance Corporation (publ) UK branch;

the branch office in Zurich, Switzerland

– Sirius International Insurance Corpora-

tion, Stockholm, Zurich branch; the branch

office in Singapore - Sirius International

Insurance Corporation, Asia branch; the

branch office in Liège, Belgium – Sirius

International Insurance Corporation,

Belgian branch; and in Hamburg,

Germany. The operation in Germany is

conducted through the agency Sirius

Rückversicherungs Service GmbH, which

will continue to operate on behalf of Sirius

International even though the company is

owned by Sirius Insurance Holding.

During 2001, a voluntary liquidation

of Sirius Réassurances Belgium S.A., Liège,

Belgium was commenced as the company

is no longer in active operation. The

liquidation has not yet been completed

due to a tax dispute.

As the share capital in Scandinavian

Re has declined due to the decreasing

value of the dollar as well as losses in the

insurance operations, and it is deemed that

the decrease will be permanent, the book

Annual Report 2004

6 7

value of the shares has been written down

by SEK 206 million.

Operations

Sirius International was established in

1989. Insurance operations, however,

commenced in 1945, in the Sirius

Insurance Company Ltd. The reinsurance

activities were transferred to Sirius Inter-

national in 1989. Sirius International has

been the parent company of the Sirius

Group since 1992.

2004 is recognised as the worst loss

year in history with no less than four major

hurricanes that hit the U.S. and several

typhoons in Asia. At the end of the year

the tragic Tsunami catastrophe occurred.

Despite the large claims activity Sirius

International reports a very satisfactory

insurance operating result. For the past

two years Sirius parent company has pre-

sented very positive insurance operating

result. The insurance operating result for

the year is the best in the company’s

history.

Fund American Re presents a very

positive result.

Scandinavian Re, which has not

accepted new business since 2002, has

continued the run-off of the insurance

portfolio. Unfortunately, there have been

further run-off losses which have not fully

been compensated for by the yield on

capital. The company therefore reports a

negative insurance operating result of SEK

88 million.

The parent company combined ratio

for the year was 93%.

The overall group combined ratio for

the year was 97%.

Gross premium income for the group

amounted to SEK 5,766 million (2003: SEK

6,890 million) while premium income for

own account amounted to SEK 4,781

million (2003: SEK 5,292 million). The

insurance operating result amounted to a

profit of SEK 316 million (2003: a loss of

SEK -224 million).

The investment result for the year

was satisfactory partly due to dropping

interest rates and rising equity rates.

During the year an investment has been

made in an associated company Symetra

Financial Holdings, Inc. The portfolio

of investments managed by Sirius Inter-

national continues to perform well. The

investment result, after allocation of

interest to the insurance operations,

amounted to a profit of SEK 597 million

(2003: SEK 780 million).

The operating result for the group,

before appropriations and taxes, amounted

to SEK 879 million (2003: SEK 497 million).

Total assets amount to SEK 22,446 million

(2003: SEK 24,490 million).

The technical result as well as

consolidation in respect of capital strength,

is presented in the five-year summary

on page 17.

Sirius International also expects to

report positive insurance operating results

in the years ahead. The diversified invest-

ment portfolio is expected to contribute to

a stable return on investment.

Sirius International has commenced

the planning of the changeover to

accounting according to the international

accounting standards IFRS. The company

does not foresee any major problems to

adjust its accounting to the new standards

as from 2005.

Events after the closing day

On January 8 and 9, 2005 Scandinavia was

hit by the hurricane Gudrun/Erwin with

very large damages to the forest and other

Annual Report 2004

8 9

property, especially in the north of Den-

mark and the southwest of Sweden. At

present Sirius International estimates that

the insurance indemnities gross for this

loss event will amount to approximately

SEK 345 million, while the insurance

indemnities for own account are estimated

to amount to approximately SEK 245

million.

Results

The parent company reports a result for

2004 before appropriations and taxes of

SEK 287 million (2003: SEK 204 million).

Net income after tax amounts to SEK

-70 million (2003: SEK 85 million).

On 31 December, 2004 the retained

earnings of the group amounted to SEK -39

million.

Annual Report 2004

Proposed Appropriation of Earnings

The amount held at the disposal of the

General Meeting of Shareholders of the

parent company Sirius International is:

Retained deficit SEK –60 million

Net income for the year SEK –70 million

Total SEK –130 million

The Board of Directors and the President

propose that the loss shall be transferred

to Retained earnings.

8 9

SEK 000's Note 20032004 2003

TECHNICAL ACCOUNT FOR INSURANCE OPERATIONS

Earned premiums, for own account

Gross premium income 1

Ceded reinsurance premiums

Change in the gross provision for unearned premiums

Change in the provision for unearned premiums, reinsurers' share

Total earned premiums, for own account

Allocated investment return transferred from

the non-technical account

Other technical income, for own account

Claims incurred, for own account

Claims paid

Gross amount

Reinsurers' share

Claims handling expenses

Claims paid, for own account

Change in the provision for claims, for own account

Gross amount

Reinsurers' share

Change in other technical provisions, for own account

Gross amount

Total claims incurred, for own account

Operating expenses 2

Operating profit/loss of technical account

NON-TECHNICAL ACCOUNT

Balance of technical account

Investment income/expenses

Investment income 3a

Unrealized gains 3b

Investment expenses and charges 4

Investment income allocated to the technical account

Total investment income/expenses

Other expenses 5

Result before appropriations and taxes

Taxes 6

Net income for the year

6,890,825

– 1 , 598,651

42,461

9,174

5 , 343,809

188,442

43,034

– 6 , 582,908

796,178

– 71,103

– 5,857,833

1,685,492

– 19,446

– 103

– 4,191,890

– 1,607,192

–223,797

–223,797

732,248

288,928

– 52,463

– 1 88,442

780,271

– 59,152

497,322

–304,619

192,703

2004

5 ,765,977

–984,816

–85,943

–87,405

4,607,813

172,521

4 ,519

–4,010,562

586,356

–17,543

–3,441,749

873,888

–94,860

–471

–2,663,192

–1,805,167

316,494

316,494

694,042

654,622

–579,187

–172,521

596,956

–34,943

878,507

–228,003

650,504

Income Statement – Group

Annual Report 2004

10 11

December 31 Note 2004 2003

(SEK 000’s)

ASSETS

Intangible Assets 7

Goodwill

Capitalized software

Total intangible assets

Investment assets

Land and buildings 8

Investments in group companies and participating interests

Loan to group company 9

Shares and participations in associated companies 9

Total investments in group companies and participating interests

Other financial investments

Shares and participations 10

Bonds and other interest bearing investments 11

Other financial assets 12

Total other financial investments

Deposits with cedents

Reinsurers' share of technical provisions 13

Provision for unearned premiums

Claims outstanding

Total reinsurers’ share of technical provisions

Debtors

Debtors arising out of direct insurance operations 14

Debtors arising out of reinsurance operations

Other debtors 14

Total debtors

Other assets 15

Tangible assets

Cash and bank balance

Total other assets

Prepayments and accrued income

Accrued interest

Other prepayments and accrued income

Deferred acquisition costs

Total prepayments and accrued income

Total assets

Balance Sheet – Group

415,249

30,200

445,449

10,936

25 ,000

1,772,991

1,797,991

1,787,452

9,053,531

286,244

11,127,227

496,116

139,479

1,169,044

1,308,523

84,847

5,234,815

148,763

5,468,452

14,489

1,459,646

1,474,135

157,530

1,973

157,577

317,080

22,445,909

5 7 3 , 6 4 9

3 7 , 4 4 0

6 1 1 , 0 8 9

1 2 , 9 9 0

25,000

0

25,000

2 , 1 2 7 , 8 0 5

10,405,621

156,664

1 2,690,090

1 , 063,253

432,694

2 , 091,638

2,524,332

434,019

5,653,793

1 32,453

6,221,265

1 4,116

1,150,552

1,164,668

1 74,368

3,279

0

1 77,647

24,490,334

Annual Report 2004

10 11


(SEK 000’s)

SHAREHOLDERS' EQUITY AND LIABILITIES

Shareholders' equity 16

Share capital (8,000,000 shares of nom.value SEK 100)

Restricted reserves

Retained earnings


Total shareholders’ equity

*) of which, reserve for unrealized gains on investments 503,171 (86,909)

Technical provisions

Provisions for unearned premiums 17

Claims outstanding 17

Equalization provision

Total technical provisions

Provisions for other risks and expenses

Taxation provisions 18

Pension provisions

Total provisions for other risks and expenses

Deposits received from reinsurers

Creditors

Creditors arising out of direct insurance operations 19

Creditors arising out of reinsurance operations

Other creditors 19

Total creditors

Accrued expenses and deferred income

Other accrued expenses and deferred income

Total shareholders' equity and liabilities

Pledged assets and contingent liabilities 21

*) *)800 ,000

5 ,854,972

-689,529

650,504

6 ,615,947

1 ,025,281

9,173,340

16,539

10,215,160

2,099,658

190

2,099,848

111,563

31,560

2,974,444

325,103

3,331,107

72,284

22,445,909

4,887,310

8 0 0 , 0 0 0

5 , 3 22,762

–177,592

192,703

6,137,873

1,051,080

10,522,466

16,177

11,589,723

2,069,038

0

2,069,038

178,519

157,418

3,875,364

364,890

4,397,672

117,509

24,490,334

5,361,327

Annual Report 2004

12 13

Accounting Principles

The annual accounts are prepared in

accordance with the Annual Accounts Act,

the Act on Annual Accounts for Insurance

Companies (ÅRFL), the Code of Statutes

2003:13 with addition of some imperative

paragraphs according to 2004:21 of the

Swedish Financial Supervisory Authority,

and in conformity with recommendation

RR1:00 of the Swedish Financial

Accounting Standards Council.

Constitutionality

The Financial Statements are in accordance

with the laws and direct ives cited above.

Principles of consolidation

The consolidated accounts comprise the

parent company, Sir ius International Insur-

ance Corporat ion (publ), Scandinavian

Reinsurance Company Ltd, Fund American

Reinsurance Company Ltd, Sir ius (Den -

mark) Forsikr ingsselskab A/S and Sir ius

Belgium Réassurances S.A.

The consolidated accounts are pre-

pared in accordance with purchase method.

Companies acquired during the year are

included in the consolidated profit and loss

account with values referring to the period

after the acquisition. The results originat-

ing from group companies divested during

the year are included in the consolidated

accounts up to the date of divestiture.

The consolidated accounts and balance

sheets of the Group’s foreign companies

are translated to Swedish kronor at average

exchange rates for the year and year-end

exchange rates respectively. Translation

differences are transferred directly to

shareholders’ equity.

Taxes

Current taxes

Taxes are calculated individual ly for each

company in accordance with the tax rules

in the respective countr ies. Current taxes

also include non - deductible withholding

taxes on dividend income.

The foreign branches are taxed indi-

vidually on their results in their respective

countries.

In Sweden the company is taxable for

the total income, inclusive of the results

from foreign branches.

When the company pays taxes in

Sweden on overseas income, a tax credit

allowance is granted for the taxes paid

abroad. This is to avoid double taxation.

Foreign taxes relate to income from

foreign branches and withholding taxes on

earnings from foreign investments.

The rule in Sweden permitting taxable

income to be reduced through appropri-

ations to untaxed reserves allows the

company to offset foreign taxes.

Deferred taxes

The consolidated profit and loss account is

stated according to the comprehensive tax

allocation method. This means that pro-

visions are made for deferred taxes on

income (expenditure) that affect both

earnings for the year and taxable income,

but in different periods (temporary differ-

ences). This is shown under the heading

deferred tax liabilities (assets) in the

balance sheet.

Deferred tax assets and liabilities are

accounted on a net basis where they refer

to the same tax authority and thus offset is

permitted.

Annual Report 2004

12 13

Tax loss carry forwards are recognised as

deferred tax assets if it is likely that they

will be utilised in the future.

Appropriations and untaxed reserves

Tax appropriations and untaxed reserves

are reported only in the accounts of the

parent company and not in the consoli-

dated accounts.

As of 2003 the group contributions

are not stated as appropriations in the ac-

counts of the parent company. The group

contributions are stated in the income

statement as deferred tax cost (28%) and

as a withdrawal from retained earnings in

shareholders’ equity (72%).

The group contributions are stated

in accordance with the recommendations

of the Swedish Financial Accounting

Standards Council.

The tax code in Sweden allows

companies to reduce their taxable income

through appropriations to untaxed

reserves. These reserves become taxable

when they are reversed, except for

when they are used to cover a loss, or

to utilise a tax-loss carry forward.

In accordance with Swedish practice,

changes in these reserves are reported in

the profit and loss account.

Appropriations to untaxed reserves

are shown in the profit and loss account

under the heading “Appropriations”. The

accumulated total of these appropriations

is reported in the balance sheet under the

heading “Untaxed reserves”.

Of untaxed reserves, 28% can be con-

sidered as deferred tax liability and 72 %

as shareholders’ equity. The deferred tax

liability can be described as a non

interest-bearing liability with an unspeci-

fied maturity. Untaxed reserves are stated

in the consolidated accounts as consisting

of 28% deferred tax and 72% restricted eq-

uity. Consequently the consolidated

accounts do not include appropriations

in the profit and loss account or untaxed

reserves in the balance sheet.

In evaluating the company’s finan-

cial strength, the total value of untaxed

reserves can be regarded as risk capital,

since losses generally can be covered

through reversals of these untaxed re-

serves, without payment of taxes. The

majority of the untaxed reserves consist

of the safety reserve. The safety reserve

represents collective, voluntary strengthen-

ing of the company’s technical provisions.

Access to this reserve is restricted to cover-

age of losses and requires the approval of

the regulatory authorities.

Goodwill

The goodwill arising from the acquisition

Sirius Belgium Réassurances S.A. is depre-

ciated according to plan. The depreciation

is done over the estimated lifetime of 20

years. The goodwill arising from the acqui-

sition of the bulk of WASA International

(UK) Insurance Ltd’s business is depreci-

ated according to plan. The depreciation is

over the estimated lifetime of 10 years.

Translation of foreign currencies

Current accounting is stated in original

currencies. Transactions in currencies other

than the local currency are translated in ac-

cordance with the following principles: For

Annual Report 2004

14 15

the financial year 2004 income statement

items are translated at the exchange rate of

the transaction day and balance sheet items

are translated at year-end exchange rates.

The following rates of exchange for the

Swedish krona have been used for the

most important currencies:

Closing rate

U.S. dollar 6.62

Euro 8.99

Pound sterling 12.69

Shareholdings in group companies

have been translated at the rate in effect

on the date when an investment was made.

Valuation principles

Investment assets

• Buildings and land are valued at acquisi-

tion cost with the reduction of calculated

depreciation.

• Investment assets in group companies

are valued at acquisition cost.

• Shares and participations are valued at

market.

• Bonds and other interest-bearing securi-

ties are valued at amortized cost.

• Other financial assets are valued at cost.

• Derivatives are valued at market value.

• Capital gains and losses on interest-bear-

ing assets are valued in accordance with

the FIFO principle. Capital gains and losses

on shares and participations are valued at

average acquisition costs.

Investments in bonds and other

interest-bearing securities are based on a

long-term approach, in which the return

that these instruments offer at date of

investment is the decisive factor in making

the investments. Therefore, accrued amor-

tized cost most accurately reflects the value

at which the assets should be stated. In

the case of shares and participations with

greater volatility and shorter investment

horizons, market value offers the most ac-

curate valuation principle.


Technical provisions consist of provisions

for unearned premiums and unexpired

risks, as well as the provisions for claims

outstanding.

Provisions for unearned premiums and

unexpired risks are calculated pro rata.

Calculation of the claims provision is

based on available knowledge of individual

claims and claims trends. In calculating

these provisions, claims not yet reported

and claims reported with insufficient

amounts are taken into account. Actuarial

methods have been used as a basis for cal-

culating the amounts of the provisions.

Allocated interest to insurance

operations

The investment income allocated to insur-

ance operations is calculated using the net

insurance liabilities as the base. Net receiv-

ables in insurance operations have been

deducted from the base. This capital base

is distributed by currency. The calculated

yields for assets in various currencies have

then been used to calculate the return on

capital from insurance operations.

Deferrred acquisition costs

Acquisition costs are costs that directly

or indirectly relate to the acquisition or

renewal of insurance contracts. Acquisi-

tion costs are deferred only for contracts

which are assumed to generate a profit

margin to at least absorb these costs. Sirius

has chosen to only defer commissions to

brokers and cedents. Deferred acquisition

costs amount to SEK 158 million and are

depreciated over a period of one to two

years depending on the type of insurance

contract.

Annual Report 2004

14 15

Premium Income

Includes both estimated and accounted

premium where the company is “on risk”.

Premiums are earned using the pro-rata

temporis method according to the period

of the underlying coverage.

Pension obligations

Employee pension benefits are based on

an insured defined contribution plan.

However former employees in Fund

American Re, who transferred to Sirius on

1 September 2004, remain in an insured

defined benefit plan which has also been

secured by insurance. The Company

President has a defined benefit pension

plan, secured by insurance, in which on

retirement he receives a certain percentage

of his salary.

Sensitivity analyses

Insurance risks

Prior to the beginning of each fiscal year,

the Board of Directors establishes the total

maximum exposure allowable for each

company in the group within the frame-

work of the Company’s Articles of Associa-

tion. Various claim scenarios have been

identified for reinsurance assumed. These

scenarios are projected monthly, based on

the current portfolio. In the credit insur-

ance sector, the Board has established the

maximum exposure for various types of

insurance.

In the case of large individual commit-

ments, such as liability for claims resulting

from a nuclear disaster, a maximum claim

limit has been set.

Ceded reinsurance is utilised in or-

der to increase the capacity as well as to

balance the incoming portfolio, and thus

avoid fluctuations in the result.

Through an active selection of reinsur-

ers, the reinsurance risk is limited.

The reserving risk is controlled through

actuarial analysis of our portfolio.

Foreign currency

When calculating the net exposure in

foreign currencies, market values of all

investment assets are adopted. As of De-

cember 31 2004, the net foreign currency

exposure, translated to Swedish kronor,

was as follows:

The translation difference, which is includ-

ed in shareholders’ equity, amounted to

SEK 209 million.

Equity price risk

A 10% decline is estimated, reducing the

value of the group’s equity portfolio by

SEK -189 million (SEK –136 million when

standard tax rate is applied).

Interest rate risk

Fixed interest rate periods and duration

(expressed in years)

The sensitivity to an increase of one per-

cent-age point in interest rates is estimated

to amount to SEK -278 million (SEK -200

million when standard tax rate is applied).

Cur- Net Impact o f a 10% unfavourable change

rency exposure in Fx- ra tes

USD MSEK 164 MSEK –16.4 (MSEK –11.8 when standard tax rate is applied)

EUR MSEK 240 MSEK –24 (MSEK –17.3 when standard tax rate is applied)

GBP MSEK 3 MSEK –0.3 (MSEK –0.2 when standard tax rate is applied)

2004 2003 Fixed rate Fixed rate Amount period Dura- Amount period Dura- SEK 000’s (years) tion SEK 000’s (years) tion

Loan to

Group company 25,000 0.5 0.5 25,000 0.25 0.25

(note 9)

Bonds and other

interest-bearing securities

DKK (note 11) 1,009,754 0.01-31.2 1.53 0 0 0

EUR (note 11) 647,660 2.5-11.0 2.72 646,608 0.5-4.5 3.4

GBP (note 11) 296,100 2.75-8.9 3.7 270,022 2.9-4.2 3.3

SEK (note 11) 3,325,082 0.5-16.1 3.7 4,481,039 0.1-10.4 2.4

SGD (note 11) 95,972 0.3-0.9 0.7 0 0 0

USD (note 11) 3,678,963 2.7-16.1 3.0 5,007,953 0.1-29.5 3.3

Other (note 12) 286,244 0.0-0.2 0.09 156,664 0.0-1.0 n.a.

9,339,775 10,587,285

Annual Report 2004

16 17

Credit risk

Based on the classification used by Stand-

ard & Poor’s, the credit risk in the port-

folio of interest-bearing securities was as

follows in 2004 and 2003:

Credit risk in SEK 000’s

Interest-bearing securities 2004 2003

DKK AAA 769,094 0

AA/A 174,534 0

Other 66,126 0

EUR AAA 10,430 2 7 , 2 0 1

AA /A 637,230 6 1 9 , 4 07

USD AAA 3,891,553 4 , 9 6 1 , 1 23

AA /A 41,739 2 5 , 8 8 4

A 10,719 1 7 7 , 6 08

Other 21,195 0

SGD AAA 95,972 0

SEK AAA 2,496,264 0

AA/A 828,818 3,552,729

A 0 928,310

Other 25,000 25,000

GBP AAA 296,100 2 7 0 , 0 22

G r and To t a l AAA 7,559,412 5 , 2 5 8 , 3 46

G r and To t a l AA /A 1,682,322 4 , 1 9 8 , 0 20

G r and To t a l A 10,719 1 , 1 0 5 , 9 18

G r and To t a l Other 112,321 25,000

To t a l Interest-bearing

securities 9,364,775 1 0 , 5 8 7 , 2 85

(no t e s 9 , 1 1 , 1 2 )

Sirius International’s policy is to invest

only in investments with a rating of at

least AA or equivalent with the exception

of investments in Swedish mortgage bonds

and US corporate bonds with a rating of at

least A.

Derivatives

The Sirius Group is exposed to the move-

ments of a large number of currencies in

relation to the Swedish krona. Currency

forward contracts are used to reduce this

exposure and to deal with the cash flow in

various currencies.

Interest rate futures are employed to

adapt interest rate risks over the full yield

curve. In addition, stock index futures and

stock futures are used to hedge the risk in

stock prices.

Currency risk, interest rate risk and

stock price risk are measured and evaluat-

ed continuously by Sirius’ investment man-

agers, as well as by Sirius, to ensure that

risk limits are not exceeded. All derivatives

are marked to market.

Annual Report 2004

16 17

Five-year SummaryGROUP

PARENT COMPANY

SEK in millions 2004 2003 2002 2001 2000 Net premium income 3,573 2,767Net premiums earned 4,094 2,854Allocated interest 268 232Net claims incurred –3,513 –1,807Net operating expenses –1,277 –1,073Insurance operating result –428 206Investment operating result –31 380Other expenses –84 –452Net income for the year 2 –95

Net technical provisions 5,413 4,907Market value on investment assets 13,819 13,668

Insurance operating result Claims ratio 86% 63%Cost ratio 31% 38%Combined ratio 117% 101%

Investment result Investment yield 4% 5%Total yield 3% 7%

Solvency capital Shareholders’ equity 1,023 1,022Deferred tax on reserve for unrealized capital gains 34 95Untaxed reserves 7,256 8,048Excess values on investment assets – Other investment assets –17 44

Total solvency capital 8,296 9,209Solvency ratio 232% 333%Capital base Required solvency capital

3,9184,134

190–2,189–1,776

359181–25425

4,51312,523

53%43%96%

6%4%

1,36930

7,271

79

8,748223%8,086

594

3,7683,780

175–2,351–1,284

320403

–51985

4,39212,184

62%34%96%

3%6%

87328

7,274

–14

8,161217%7,772

710

SEK in millions 2004 2003 2002 2001 2000 Net premium income 7,454 6,023Net premiums earned 7,877 6,007Other technical income 124 125Allocated interest 283 246Net claims incurred –8,163 –4,932Net operating expenses –1,370 –1,391Insurance operating result –1,249 55Investment operating result 489 616Other expenses –35 –34Net income for the year –557 522 Net technical provisions 14,686 9,593Market value on investment assets 20,299 18,384 Insurance operating result Claims ratio 102% 80%Cost ratio 17% 23%Combined ratio 119% 103% Investment result Investment yield 5% 5%Total yield 4% 8% Solvency capital Shareholders’ equity 7,398 8,001Deferred tax on untaxed reserves 2,032 2,253Deferred tax other –161 –43Deferred tax on reserve for unrealized capital gains 40 94Excess values on investment assets – Other investment assets –78 83 Total solvency capital 9,231 10,388Solvency ratio 124% 172%Capital baseRequired solvency capital

4,9615,282

119197

–3,226–2,249

12326

–3824

11,82516,160

60%41%

101%

3%3%

7,0342,036–141

13

138

9,079183%

00

4,7814,608

5173

–2,663–1,805

316597-35651

8,90714,957

58%39%97%

3%6%

6,6162,081

–2644

65

8,780184%8,0401,302

Annual Report 2004

5,2925,344

43188

–4,192–1,607

–224780–59193

9,06514,914

78%30%

108%

3%6%

6,1382,036

036

–28

8,182155%

00

4,2133,765

164–1,973–1,536

421–109

–25–70

4,58811,774

52%41%93%

3%2%

78544

7,433

83

8,345198%7,876

722

18 19

TOTAL

Analysis of Consolidated Insurance Result (SEK 000's)

Notes to the Financial Statements

ASSUMED

REINSURANCE

DIRECT INSURANCE

Annual Report 2004

SWEDEN FOREIGN

Industrial fire Marine Aviation Credit

& allied risks

I) Notes to Analysis of Consolidated Insurance Result – Technical account

Premiums earned, for own account 4,607,813 3,483 958 0 8,346 837,910 3,757,116

Al located investment return transferred

from the non- technica l account 172,521 203 17 0 2,555 6,275 163,471

Other technica l income, for own account 4,519 0 0 0 0 0 4,519

Cla ims incurrred, own account –2,663,192 –2,422 0 0 26,770 –277,349 –2,410,191

Operat ing expenses –1,805,167 12,022 –110 0 –55,326 –345,890 –1,415,863

Operating profit/loss of technical account 316,494 13,286 865 0 –17,655 220,946 99,052

II) Notes to Analysis of Consol idated Insurance Result – Technical provisions

Provisions for unearned premiums –1,025,281 0 –526 0 –65,043 –30,237 –929,474

Provisions for outstanding claims –9,173,340 –78,068 –54 0 –620 –241,562 –8,853,036

Equalization provision –16,539 0 0 0 –3,099 –9,888 –3,552

Total technical provisions –10,215,160 –78,068 –580 0 –68,762 –281,687 –9,786,062

III) Notes to Analysis of Consolidated Insurance Result – Reinsurers’ share of technical provisions

Provisions for unearned premiums 139,479 0 0 0 0 575 138,904

Provisions for outstanding claims 1,169,044 69,877 0 0 0 106,031 993,136

Total reinsurers’ share of technical provisions 1,308,523 69,877 0 0 0 106,606 1,132,040

IV) Notes to Analysis of Consol idated Insurance Result – Premiums earned, for own account

Gross premium income 5,765,977 501 0 0 3,820 993,382 4,768,274

Ceded premiums –984,816 –270 0 0 526 –209,769 –775,303

Change in the gross provision for premiums –85,943 108,403 958 0 61,613 79,618 –336,535

Change in the gross provision for

premiums, reinsurers’ share –87,405 –105,151 0 0 –57,613 –25,321 100,680

Total premiums earned, for own account 4,607,813 3,483 958 0 8,346 837,910 3,757,116

V) Notes to Analysis of Consol idated Insurance Result – Claims incurred, for own account

Claims paid –4,010,562 –119,056 0 0 –229 –320,831 –3,570,446

Ceded claims paid 586,356 115,640 0 0 229 109,514 360,973

Claims handling expense –17,543 0 0 0 0 0 –17,543

Change in gross provision for claims 873,888 25,060 0 0 27,020 –170,189 991,997

Change in provision for claims, reinsurers’ share –94,860 –24,066 0 0 –250 104,628 –175,172

Change in other technical provisions, for own account –471 0 0 0 0 –471 0

Total claims incurred, for own account –2,663,192 –2,422 0 0 26,770 –277,349 –2,410,191

18 19

Note 3a • Investment Income

Dividend income from

Other

Interest income

Bonds and other interest bearing securities

– group companies


– other

Other interest income

– group companies

– other

Capital gains on foreign exchange, net

Realized gains on investments

Capital gain from acquisition of subsidiary

Shares and participations

Interest bearing securities

Derivatives

Total investment income

2004

53,877

0

369,470

1,601

27,588

0

132,332

111,429

0

–2,255

694,042

2003

34,040

22,252

365,929

6,723

10,569

153,222

0

6,775

132,738

0

732,248

Note 2 • Operating Expenses

2004 Acquisition Administrative

Costs Expenses Total

Commissions and profit commissions

on assumed reinsurance –1,615,842 0 –1,615,842

Prepaid acquisition costs assumed reinsurance 88,795 0 88,795

Depreciation of fixed assets*) –5,377 –21,643 –27,020

Other operating expenses*) –154,246 –261,175 –415,421


on ceded reinsurance 175,428 0 175,428

Prepaid acquisition costs ceded reinsurance –11,107 0 –11,107

Total Operating Expenses –1,522,349 –282,818 –1,805,167




on assumed reinsurance –1,486,073 0 –1,486,073





Total Operating Expenses –1,280,469 –326,723 –1,607,192

*) Note 20

Note 1 • Gross Premium Income

2004 2003

Sweden 4,321 167,660

Other EEA countries 127,369 161,423

Other countries 866,013 2,435,642

Total gross income, direct insurance 997,703 2,764,725

Assumed reinsurance 4,768,274 4,126,100

Total Gross Premium Income 5,765,977 6,890,825

Note 3b • Unrealized gains on investments

Shares and participations in group companies

and associated companies

Shares and participations – other

Derivatives

Total unrealized gains on investments

Note 4 • Investment Expenses

Operating expenses

Net deficit on real estate

Interest expenses

Other interest expenses

Capital losses on foreign exchange, net

Realized losses on investments

Shares and participations in group companies

and associated companies


Total investment expenses

2004

–55,755

–4,070

–3,776

–345,938

–105,907

–63,741

–579,187

2003

–46,535

–3,860

–2,068

0

0

0

–52,463

Annual Report 2004

2004

422,556

232,066

0

654,622

2003

0

349,151

–60,223

288,928

20 21

Annual Report 2004

Note 5 • Other and Extraordinary Expenses

2004 2003

Goodwill depreciation –34,943 –41,614

Extraordinary expenses 0 –17,538

Total other and extraordinary expenses –34,943 –59,152

Note 6 • Tax

Current tax

Current tax for previous year

Tax effect group contribution

Change in deferred tax for allocation to the

safety reserve

Change in deferred tax for other

untaxed reserves

Change in deferred tax assets

Deferred tax other

Deferred tax on unrealized gains/losses

Other tax

Total tax

Note 7 • Intangible Assets

Goodwill

Acquisition cost

Depreciation according to plan

Total Goodwill

Goodwill is depreciated at annual rates of 5%

and 10% respectively of acquisition cost


Acquisition cost

Depreciation according to plan

Total capitalized software

Capitalized software is depreciated at annual rates

of 33.3% and 25% respectively of acquisition cost

2004

–166,375

–5,879

–7,367

–44,800

157

0

12,756

–16,491

–4

–228,003

2003

–74,185

1,977

–91,260

0

0

–140,557

6,328

–22,856

15,934

–304,619

2004

615,381

–200,132

415,249

67,214

–37,014

30,200

2003

748,852

–175,203

573,649

53,253

–15,813

37,440

Note 8 • Land and Buildings

2004 2003

Land and buildings

Acquisition cost 21,616 21,616

Accumulated depreciation –10,680 –8,626

Book value land and buildings 10,936 12,990

Buildings abroad are depreciated at an annual rate of 5% of acquisition cost

and buildings in Sweden with 2%. The value of land and buildings for Swedish

taxation purposes is 415 (415) and 914 (914) respectively.

Note 9 • Investments in Group Companies and Participating Interests

2004 2003

Cost value Cost value

Loan to group company 25,000 25,000

Total loan to group company 25,000 25,000

Shares and participations in associated companies 2004 2003

Cost value Market value Cost value Market value

Symetra Financial Holdings Inc., 1,392,198 1,772,990 0 0

Redmond, Washington, USA

nom. value MUSD 200. The share of capital

amounts to 18.8%.

20 21

Note 11 • Bonds and Other Interest-bearing Investments

2004 2003

Amortised Market Amortised Market

Cost Value Cost Value

Swedish government 2,198,130 2,240,352 3,464,507 3,436,779

Swedish mortgage institutions 828,818 847,742 1,016,532 1,028,173

Foreign governments 2,824,058 2,814,449 5,517,227 5,499,901

Other foreign issuers 3,202,525 3,216,123 407,355 413,231

Total bonds and other interest-bearing investments 9,053,531 9,118,666 10,405,621 10,378,084

of which listed 9,053,531 9,118,666 10,380,267 10,349,994

Remaining amount to be amortised according to the amortised cost principle

2004 2003

Total positive amount 464,555 428,960

Total negative amount 142,727 410,097

Annual Report 2004

Note 10 • Shares and Participations

Security Currency Number Cost Value Market value

(SEK) (SEK)

Danske Bank DKK 267,000 46,319,164 54,071,649

Diageo GBP 620,000 56,255,594 58,465,138

ForeningsSparbanken A SEK 250,000 34,617,666 41,375,226

Financial Securities Assurance USD 45,807,647 303,388,627 328,664,582

HSBC CCF Agei Sicav EUR EUR 2,886 5,109,111 5,807,765

Montpellier Re USD 3,150,000 431,650,608 467,933,407

Oblipar Sicav D EUR EUR 5,615 193,595,740 205,643,501

Peco Pallet Inc USD 2,100,000 13,908,510 13,908,510

Prospector Offshore Fund USD 62,099 115,531,699 126,627,266

Svenska Handelsbanken A SEK 110,000 15,072,961 19,030,000

Union de Banque Suisse-Fund CHF CHF 8 ,126 5,209,555 5,287,478

Union de Banque Suisse-Fund Lux USD 2,339 1,626,925 1,723,715

Total 1,222,286,160 1,328,538,236

Other shares & participations Mix 447,179,373 458,913,688

Total shares & participations 1,669,465,533 1,787,451,924

of which listed 1,222,286,159 1,328,538,236

Note 12 • Other Financial Assets

2004 2003


Other Financial Assets 286,244 156,664

which are directly related to insurance

operations 286,244 (154,409), derivatives 0 (2,255)

22 23

Annual Report 2004

Note 13 • Reinsurers' Share of Technical Provisions

Provisions for unearned premiums 2004 2003

Opening balance 432,694 508,018

Portfolio transfer related to

subsidiary acquisition / divestiture –266,581 0

Change in provision –87,405 9,174

Capital gains/losses on foreign exchange 60,771 –84,498

Closing balance 139,479 432,694

Provisions for outstanding claims

2004 Incurred and Incurred, but Total

reported claims not reported

claims (I.B.N.R.)

Opening balance 1,198,726 892,912 2,091,638


subsidiary acquisition /

divestiture –99,862 –573,783 –673,645

Change in provision –270,029 175,169 –94,860

Capital gains/losses on

foreign exchange –68,809 –85,280 –154,089

Closing balance 760,026 409,018 1,169,044



claims (I.B.N.R.)

Opening balance 1,468,557 1,077,068 2,545,625




Closing balance 1,198,726 892,912 2,091,638

Note 14 • Debtors

2004 2003

Debtors arising out of direct insurance

Amounts due from policyholders 11 36,467

Amounts due from intermediaries 84,863 397,552

Total debtors arising out

of direct insurance 84,874 434,019

Other debtors 148,763 133,453

Total other debtors 148,763 133,453

22 23

Note 16 • Shareholders' Equity

2004 Share Restricted Retained Net income Total Share-

capital reserves earnings for the year holders' equity

Opening balance 800,000 5,322,762 –177,592 192,703 6,137,873

Transfer of result from previous year 0 0 192,703 –192,703 0

Transfer from reserve for unrealized

capital gains 0 –86,909 86,909

Transfer to reserve for unrealized

capital gains 0 503,171 –503,171 0 0

Transfer to restricted reserves 0 115,948 –115,948 0 0

Divestiture of subsidiary 0 0 33,106 0 33,106

Translation difference 0 0 –186,593 0 –186,593

Group contribution paid 0 0 –18,943 0 –18,943

Net income for the year 0 0 0 650,504 650,504

Closing balance 800,000 5,854,972 –689,529 650,504 6,615,947

*) whereof reserve for unrealized capital gains TSEK 503,171 (86,909).

*)

Annual Report 2004

Note 15 • Other Assets

2004 2003

Fixed assets



Book value 14,489 14,116

Machinery, equipment etc excluding IT equipment are depreciated at an annual

rate of 20% of acquisition cost.

Cash and bank

Cash pool 0 105,838

Other cash and bank 1,459,646 1,044,714

Total cash and bank balance 1,459,646 1,150,552

24 25

Note 17 • Technical Provisions


Opening balance 1,051,080 1,255,775


subsidiary acquisition / divestiture –235,221 0

Change in provision 85,943 –42,461

Capital gains/losses on foreign exchange 123,479 –162,234

Closing balance 1,025,281 1,051,080




claims (I.B.N.R.)

Opening balance 3,914,447 6,608,019 10,522,466


subsidiary acquisition

/ divestiture 307,947 –209,555 98,392

Change in provision –348,008 –525,880 –873,888

Change in present value

of funds required to pay

losses at future dates 0 103,860 103,860



Closing balance 3,627,161 5,546,179 9,173,340

whereof group companies 294,455 (0)



claims (I.B.N.R.)

Opening balance 4,324,260 9,281,421 13,605,681

Change in provision 47,338 –1,732,830 –1,685,492

Change in present value

of funds required to pay

losses at future dates 0 336,607 336,607


foreign exchange –457,151 –1,277,179 –1,734,330

Closing balance 3,914,447 6,608,019 10,522,466

For Scandinavian Re a portion of insurance reserves is shown on a discounted

basis, which estimates the present value of funds required to pay losses at

future dates. The reserves are discounted where anticipated future investment

income is an integral part of the premium pricing for a particular product. The

assumptions on which the discounting of outstanding losses is based are shown

in the table below.

2004 2003

Nominal amount, TUSD 673,998 775,056

Discounted amount, TUSD 428,843 528,964

Total effect of discounting, TUSD 245,155 246,092

Discount rates 2.35%-7.5% 5.5%–7.5%

Durations 2 years–30 years 2 years–30 years

Note 18 • Provisions for Tax

2004 2003

Deferred tax on

– untaxed reserves 2,081,256 2,036,617

– reserve for unrealized capital gains 44,426 36,053

– other 1,808 –3,632

Deferred taxes recoverable –27,832 0

Total provisions for tax 2,099,658 2,069,038

Note 19 • Creditors arising out of direct insurance

2004 2003

Amounts due to policy holders 4 1,320

Amounts due to intermediaries 31,556 156,098

Total creditors arising out

of direct insurance 31,560 157,418

Other creditors 325,103 364,890

whereof group companies 26,310 (330,969)

Annual Report 2004

24 25

Note 20 • Employees, Administrative expenses and the

Allocations

2004 2003

Average number of employees

Sweden 97 92

Belgium 58 61

Bermuda 7 6

United Kingdom 36 36

Switzerland 1 1

Singapore 10 11

USA 0 19

of which

female 110 113

male 99 113

Total average number of employees 209 226

Whereof number of board members,

President and other senior members of management

Men 4 3

Women 0 0

Total 4 3

Administrative expenses and the Allocations

Personnel expenses

Salaries and compensations –205,660 –151,629

Social security costs –47,254 –31,903

Pension expenses –24,025 –13,848

Other personnel expenses –5,977 –13,073

Total personnel expenses and

other remunerations –282,916 –210,453

2004 Whereof salaries Whereof pension

and other expenses

remunerations

Directors –60 0

President –3,600 –1,344

Other senior members

of management –2,315 –314

Total –5,975 –1,658


and other expenses

remunerations

Directors –60 0

President –4,076 –1,298



Total –6,372 –1,507

Remuneration is paid to external members of the Board of Directors pursuant to

resolution taken at the Annual General Meeting of Shareholders. Compensation

for the President and other senior members of management comprise base

salary, bonus and other compensations such as car benefits and pension. Alloca-

tion between base salary and bonus shall be commensurate with the employee's

responsibility and authority.

Upon termination initiated by the company, the President is entitled to severance

pay equal to one years’ salary.

Note 20 continued 2004 2003

Other operating expenses

Rent –39,356 –33,492

Depreciation –27,020 –17,309

Other administrative expenses –143,912 –202,161

whereof audit fees –7,419 –7,921

Total other operating expenses –210,288 –252,962

Total administrative expenses –493,204 –463,415

Allocated administrative expenses

Claims handling expenses –17,543 –15,908

Investment expenses note 4 –33,220 –12,012

Acquisition cost note 2 –159,623 –108,772

Total allocated administrative expenses –210,386 –136,692

Total administrative expenses after

the allocations note 2 –282,818 –326,723

Note 21 • Pledged assets and Contingent liabilities

Pledged Assets 2004 2003

Bonds & debentures 3,559,123 3,800,108

Accrued interest 3,658 2,739

Cash and bank 197,489 316,983

Total pledged assets 3,760,270 4,119,830

The majority of the pledged assets are collaterals for issued letters of credit to

cover obligations under reinsurance contracts.

Contingent liabilities 2004 2003

Guarantees on behalf of subsidiary 990,153 1,084,682

Future commitments to invest in

risk venture capital companies 136,887 156,815

Total pledged assets and

contingent liabilities 4,887,310 5,361,327

Annual Report 2004

26 27

SEK 000’s Note 2004 2003

TECHNICAL ACCOUNT FOR INSURANCE OPERATIONS

Earned premiums, for own account

Gross premium income 1

Ceded reinsurance premiums

Change in the gross provision for unearned premiums

Change in the provision for unearned premiums, reinsurers' share

Total earned premiums, for own account


the non-technical account

Claims incurred, for own account

Claims paid

Gross amount

Reinsurers' share

Claims handling expenses 23

Claims paid, for own account

Change in the provision for claims, for own account

Gross amount

Reinsurers' share

Change in other technical provisions, for own account

Gross amount

Total claims incurred, for own account

Operating expenses 2

Operating profit/loss of technical account

5,000,841

–788,337

–410,208

–37,310

3,764,986

164,445

–2,495,218

557,935

–17,543

–1,954,826

186,206

–203,885

–471

–1,972,976

–1,535,897

420,558

Income Statement – Parent Company

4,555,692

– 787,935

63,220

– 51,254

3,779,723

1 75,044

– 2,736,617

672,583

–15,908

– 2 , 079,942

144,951

– 4 16,220

– 103

– 2 , 351,314

– 1 , 283,536

3 19,917

Annual Report 2004

26 27

SEK 000’s Note 2004 2003

NON-TECHNICAL ACCOUNT

Balance of technical account

Investment income/expenses

Investment income 3a

Unrealized gains 3b

Investment expenses 4

Investment income allocated to technical account

Total investment income/expenses

Other expenses and extraordinary expenses 5

Result before appropriations and taxes

Appropriations 6

Taxes 7


420,558

407,778

223,448

–575,317

–164,445

–108,536

–24,801

287,221

–159,440

–197,384

–69,603

319,917

356,113

268,016

– 522,478

–175,044

– 73,393

–42,340

204,185

– 2,685

– 116,919

84,581

Annual Report 2004

28 29


(SEK 000’s)

ASSETS

Intangible Assets 8

Goodwill


Total intangible assets

Investment assets

Land and buildings 9

Investments in group companies and participating interests

Shares and participations in group companies 10

Shares and participations in associated companies 10

Loan to group company 11

Total investments in group companies and participating interests

Other financial investments

Shares and participations 12

Bonds and other interest-bearing investments 13

Other financial assets 14

Total other financial investments

Deposits with cedents

Reinsurers' share of technical provisions 15

Provision for unearned premiums

Claims outstanding

Total reinsurers’ share of technical provisions

Debtors

Debtors arising out of direct insurance operations 16

Debtors arising out of reinsurance operations

Other debtors 16

Total debtors

Other assets 17

Tangible assets

Cash and bank balance

Total other assets

Prepayments and accrued income

Accrued interest

Deferred acquisition costs

Other prepayments and accrued income

Total prepayments and accrued income

Total assets

312,675

29,525

342,200

10,936

1,949,327

1,535,760

25,000

3,510,087

1 ,714,293

5,218,077

0

6,932,370

308,423

137,446

1 ,093,018

1 ,230,464

84,874

507,846

312,922

905,642

11,432

929,899

941,331

137,126

127,487

1 ,973

266,586

14 ,448,039

Balance Sheet – Parent Company

337,476

37,440

374,917

12,990

2,096,958

0

25,000

2,121,958

1,990,693

6,149,954

2,255

8,142,902

1,080,993

177,214

1,348,820

1,526,034

173,652

64,032

359,791

597,475

12,027

839,053

851,080

137,153

0

2,899

140,052

14,848,400

Annual Report 2004

28 29

800 ,000

114,240

–59,709

–69,603

784,931

106 ,198

7 ,326,858

7 ,433,056

844,943

4,952,349

21 ,401

5 ,818,693

44,426

109,983

31,560

43,799

126,726

202,085

54,865

14 ,448,039

2 ,625,839

8 0 0 , 0 0 0

71,831

–82,935

84,581

873,477

1 0 6,773

7 , 1 6 6,858

7 , 2 7 3,631

505,167

5,391,895

2 1,039

5,918,101

27,934

1 30,755

1 31,959

97,047

361,191

590,197

34,305

1 4,848,400

2,268,662

Annual Report 2004


(SEK 000’s)

SHAREHOLDERS' EQUITY AND LIABILITIES

Shareholders' equity 18

Share capital (8,000,000 shares of nom.value SEK 100)

Reserve for unrealized gains on investments

Retained earnings


Total shareholders’ equity

Untaxed reserves

Excess depreciations on intangible assets

Safety reserve

Total untaxed reserves


Provisions for unearned premiums 19

Claims outstanding 19

Equalization provision

Total technical provisions

Provisions for other risks and expenses

Taxation provisions 20

Deposits received from reinsurers

Creditors

Creditors arising out of direct insurance operations 21

Creditors arising out of reinsurance operations

Other creditors 21

Total creditors

Accrued expenses and deferred income

Other accrued expenses and deferred income

Total shareholders' equity and liabilities

Pledged assets and contingent liabilities 24

30 31

ASSUMED

REINSURANCE

DIRECT INSURANCETOTAL

SWEDEN FOREIGN

Industrial fire Marine Aviation Credit

& allied risks

I) Notes to Analysis of Parent Company – Technical account

Premiums earned, for own account 3,764,986 3,483 958 0 8,346 614,253 3,137,946


the non-technical account 164,445 203 17 0 2,555 6,275 155,395

Claims incurrred, own account –1,972,976 –2,422 0 0 26,770 –209,782 –1,787,542

Operating expenses –1,535,897 12,022 –110 0 –55,326 –276,332 –1,216,151

Operating profit/loss of technical account 420,558 13,286 865 0 –17,655 134,414 289,648

II) Notes to Analysis of Parent Company – Technical provisions

Provisions for unearned premiums –844,943 0 –526 0 –65,043 –30,237 –749,136

Provisions for outstanding claims –4,952,349 –78,068 –54 0 –620 –241,562 –4,632,045

Equalization provision –21,401 0 0 0 –3,099 –9,888 –8,414

Total technical provisions –5,818,693 –78,068 –580 0 –68,762 –281,687 –5,389,595

III) Notes to Analysis of Parent Company – Reinsurers’ share of technical provisions

Provisions for unearned premiums 137,446 0 0 0 0 575 136,871

Provisions for outstanding claims 1,093,018 69,877 0 0 0 106,031 917,110

Total reinsurers’ share of technical provisions 1,230,463 69,877 0 0 0 106,606 1,053,981

IV) Notes to Analysis of Parent Company – Premiums earned, for own account

Gross premium income 5,000,841 501 0 0 3,820 620,960 4,375,560

Ceded premiums –788,337 –270 0 0 526 –30,159 –758,434

Change in the gross provision for premiums –410,208 108,403 958 0 61,613 26,338 –607,520

Change in the gross provision for

premiums, reinsurers’ share –37,310 –105,151 0 0 –57,613 –2,886 128,340

Total premiums earned, for own account 3,764,986 3,483 958 0 8,346 614,253 3,137,946

V) Notes to Analysis of Parent Company – Claims incurred, for own account

Claims paid –2,495,218 –119,056 0 0 –229 –221,573 –2,154,360

Ceded claims paid 557,935 115,640 0 0 229 14,557 427,509

Claims handling expense –17,543 0 0 0 0 0 –17,543

Change in gross provision for claims 186,206 25,060 0 0 27,020 8,064 126,062

Change in provision for claims, reinsurers’ share –203,885 –24,066 0 0 –250 –10,359 –169,210

Change in other technical provisions, gross amount –471 0 0 0 0 –471 0

Total claims incurred, for own account –1,972,976 –2,422 0 0 26,770 –209,782 –1,787,542

Analysis of Parent Company Insurance Result (SEK 000's)

Notes to the Financial Statements

Annual Report 2004

30 31

Note 1 • Gross Premium Income

Sweden

Other EEA countries

Other countries

Total gross income, direct insurance

Assumed reinsurance

Total gross premium income

Note 2 • Total Operating Expenses




on assumed reinsurance –1,448,527 0 1,448,527

Prepaid acquisitions costs assumed reinsurance 160,495 0 160,495



Commissions and profit commission


Prepaid acquisitions costs ceded reinsurance –17.339 0 –17,339

Total operating expenses –1,300,774 –235,123 –1,535,897




on assumed reinsurance –1,077,217 0 1,077,217





Total operating expenses –1,140,689 –142,847 –1,283,536

*) Note 23

Note 3a • Investment Income

Dividend income from

Sirius group companies

Other

Interest income


– group companies


– other

Other interest income

– group companies

– other

Capital gains on foreign exchange, net

Unrealized gains/losses on investments



Derivatives

Total investment income

Note 3b • Unrealized gains on investments


Derivatives

Total unrealized gains on investments

2003

167,660

161,423

520,162

849,245

3,706,447

4,555,692

2004

0

53,878

0

273,134

1,601

18,762

0

62,658

0

–2,255

407,778

2003

328,239

–60,223

268,016

2004

4,321

127,369

493,591

625,281

4,375,560

5,000,841

2003

0

33,803

22,252

273,138

6,723

10,309

6,090

–26,372

30,170

0

356,113

2004

223,448

0

223,448

Annual Report 2004

32 33

Note 4 • Investment Expenses

Operating expenses

Interest expenses

Other interest expenses – group companies

Other interest expenses

Net deficit on real estate

Capital losses on foreign exchange, net

Realized losses on investments


Interest bearing equities

Depreciation of shares in group companies

(Scand.Re)

Total investment expenses

Note 5 • Other and Extraordinary Expenses

2004 2003

Goodwill depreciation –24,801 –24,801

Other extraordinary expenses 0 –17,539

Total other and extraordinary expenses –24,801 –42,340

Note 6 • Appropriations

2004 2003

Allocation on the safety reserve 160,000 0

Excess depreciations on tangible

assets (goodwill) –560 –2,685

Total appropriations 159,440 –2,685

Note 7 • Tax

2004 2003

Current tax –167,647 –29,211

Current tax for previous year –5,878 1,085

Tax effect group contribution –7,367 –91,260

Deferred tax on unrealized gains –16,492 2,476

Other tax 0 –9

Total tax –197,384 –116,919

Annual Report 2004

Note 8 • Intangible Assets

2004 2003

Goodwill


Depreciation according to plan –146,935 –122,134

Total Goodwill 312,675 337,476

Goodwill is depreciated at annual rates of 5% and 10% respectively

of acquisition cost.



Depreciation according to plan –35,568 –15,813

Total capitalized software 29,525 37,440

Software is depreciated at an annual rate of 33.3% of acquisition cost.

Note 9 • Land and Buildings

2004 2003

Land and buildings



Book value land and buildings 10,936 12,990

Buildings abroad are depreciated at an annual rate of 5% of acquisition cost

and buildings in Sweden with 2%. The value of land and buildings for Swedish

taxation purposes is 415 (415) and 914 (914 ) respectively.

2003

–39,725

–401

–2,068

–3,860

0

0

0

–476,424

–522,478

2004

–47,831

0

–3,776

–4,070

–79,895

–177,298

–56,269

–206,178

–575,317

32 33

*)

2004 2003

Cost value Market value Cost value Market value

Shares and participations in

associated companies

Symetra Financial Holdings Inc., 1,535,760 1,772,990 0 0

Redmond, Washington, nom.value

MUSD 200. The share of capital

amounts to 18.8%

Note 11 • Loan – Group Company

2004 2003


Loan to group company 25,000 25,000

Total loans – group company 25,000 25,000

Annual Report 2004

Note 10 • Shares and Participations in Group Companies and

Associated Companies

2004 2003

Fund American Re, Bermuda

14 000 000 shares nom. value MUSD 14

(100% ownership) 567.807 0

Sirius Belgium Réassurances S.A., Liège,

Belgium share capital total 1,245,681

EUR of 700,000 shares without nom. value

(100% ownership) 13,018 13,018

Sirius (Denmark) Forsikringsselskab A/S,

Copenhagen, 850 000 shares nom.value

MDKK 850 (100% ownership) 386,296 0

Scandinavian Reinsurance Company Ltd.,

Bermuda 50.000.000 shares nom.value

MUSD 50 1,000 preference

shares nom. value MUSD 50

(100% ownership) 982,206 1,188,384

Sirius America Insurance Company,

Delaware, 42,000 shares nom.value

MUSD 4,200 0 895,556

Total shares and participations

in group companies 1,949,327 2,096,958

*) Write-down of shares in Scandinavian Re 2004

TSEK –206,178 accumulated write-down of shares totalling TSEK –682,602

34 35

Annual Report 2004

Note 12 • Shares and Participations

Security Currency Number Cost Value Market value

(SEK) (SEK)

Danske Bank DKK 267,000 46,319,164 54,071,649

Diageo GBP 620,000 56,255,594 58,465,138

Financial Securities

Assurance USD 45,807,647 303,388,627 328,664,582

ForeningsSparbanken A SEK 250,000 34,617,666 41,375,226

HSBC CCF Agei Sicav EUR EUR 2,886 5,109,111 5,807,765

Montpellier Re USD 3,150,000 431,650,608 467,933,407

Oblipar Sicav D EUR EUR 5,615 193,595,740 205,643,501

Peco Pallet Inc USD 2,100,000 13,908,510 13,908,510

Prospector Offshore Fund USD 62,099 49,388,549 53,473,076

Svenska Handelsbanken A SEK 110,000 15,072,961 19,030,000

Union de Banque

Suisse -Fund CHF CHF 8,126 5,209,555 5,287,478

Union de Banque

Suisse -Fund Lux USD 2,339 1,626,925 1,723,715

Total 1,156,143,010 1,255,379,047

Other shares & participations Mix 447,179,373 458,913,688

Total shares & participation 1,603,322,383 1,714,292,735

of which listed 1,156,143,010 1,255,379,047

Note 13 • Bonds and Other Interest-bearing Investments

2004 2003

Amortised Market Amortised Market


Swedish government 2,197,953 2,240,352 3,464,507 3,436,779

Swedish mortgage institutions 828,818 847,742 1,016,532 1,028,173

Foreign governments 1,042,866 1,054,437 1,498,354 1,494,410

Other foreign issuers 1,148,440 1,158,009 170,561 176,852

Total bonds and other interest-bearing investments 5,218,077 5,300,540 6,149,954 6,136,214

of which listed 5,218,077 5,300,540 6,129,204 6,112,950

Remaining amount to be amortised according to the amortised cost principle

2004 2003

Total positive amount 308,634 269,163

Total negative amount 36,235 85,723

Note 14 • Other Financial Assets

2004 2003

Other financial assets 0 2,255

which are directly

related to derivatives 0 (2,255)

34 35

Note 18 • Shareholders' Equity

2004 Share Restricted Retained Net income Total Share-

capital reserves earnings for the year holders' equity

Opening balance 800,000 71,831 –82,935 84,581 873,477

Transfer of net result from

previous year 0 0 84,581 –84,581 0

Dividend paid 0 0 0 0 0

Transfer from reserve for unrealized

capital gains 0 –71,831 71,831 0 0

Transfer to reserve for unrealized capital gains 0 114,240 –114,240 0 0

Group contribution 72% 0 0 –18,943 0 –18,943

Net income for the year 0 0 0 –69,603 –69,603

Closing balance 800,000 114,240 –59,706 –69,603 784,931

Restricted reserves represent reserve for unrealized capital gains on shares and participations and derivatives.

Note 17 • Other Assets

2004 2003

Fixed assets

Acquisition cost

Accumulated depreciation

Book value

Machinery, equipment etc excluding IT equipment are depreciated at an annual

rate of 20% of acquisition cost. IT equipment is depreciated at an annual rate of

33% of acquisition cost.

Cash and bank

Cash pool

Other cash and bank

Total cash and bank balance

36,467

137,185

173,652

359,791

359,791

73,773

–62,341

11,432

0

929,899

929,899

11

84,863

84,874

312,922

312,922

72,317

–60,290

12,027

105,838

733,215

839,053

Annual Report 2004

Note 15 • Reinsurers' Share of Technical Provisions


Opening balance 177,214 246,953

Change in provision –37,310 –51,254

Capital gains/losses on foreign exchange –2,458 –18,485

Closing balance 137,446 177,214




claims (I.B.N.R.)

Opening balance 1,020,024 328,796 1,348,820


Capital gains/losses

on foreign exchange –37,553 –14,363 –51,916

Closing balance 689,659 403,359 1,093,018



claims (I.B.N.R.)

Opening balance 1,290,307 692,183 1,982,490


Capital gains/losses

on foreign exchange –156,743 –60,708 –217,451

Closing balance 1,020,024 328,796 1,348,820

Note 16 • Debtors

2004 2003

Debtors arising out of direct insurance

Amounts due from policyholders

Amounts due from intermediaries

Total debtors arising out of direct insurance

Other debtors*)

Total other debtors

*) of which, group companies 237,345 (255,884).

36 37

2003

618,596

–63,220

–50,209

505,167

Note 19 • Technical Provisions

Provisions for unearned premiums

Opening balance

Change in provision

Capital gains/losses on foreign exchange

Closing balance

of which group companies 0 (33,926)




claims (I.B.N.R.)

Opening balance 3,590,215 1,801,680 5,391,895




Closing balance 2,993,231 1,959,118 4,952,349

of which group companies 294,455 (120,069)



claims (I.B.N.R.)

Opening balance 3,978,859 2,122,614 6,101,473




Closing balance 3,590,215 1,801,680 5,391,895

2004

505,167

410,208

–70,432

844,943

Note 20 • Provisions for Tax

2004 2003

Provision for deferred tax (reserve for

unrealized capital gains)

Total provision for tax

44,426

44,426

4

31,556

31,560

126,726

27,934

27,934

1,320

130,639

131,959

361,191

*)

Note 21 • Creditors arising out of direct insurance

2004 2003

Amounts due to policy holders

Amounts due to intermediaries

Total creditors arising out of direct

insurance

Creditors, other

of which, to group companies 26,310 (330,287)

Note 22 • Sickness absence in Sweden, %

2004 2003

Women 4.27 3.94

Men 1.51 1.24

Total 3.22 2.83

Age

Younger than 30 years 2.48 1.45

30-49 years 2.92 1.95

50 years and older 3.98 5.09

Total sickness absence 3.22 2.83

60 days or more 1.46 1.23

*) 2003 only the first half year was reported.

Annual Report 2004

36 37

Note 23 continued

2004 2003

Other operating expenses

Rent

Depreciation

Other administrative expenses

whereof audit fees

Total other administrative expenses

Total operating expenses

Allocated administrative expenses

Claims handling expenses

Investment expenses note 4

Acquisition costs note 2

Total allocated administrative expenses

Total administrative expenses after the

allocations note 2

Note 24 • Pledged assets and Contingent liabilities

Pledged Assets 2004 2003

Bonds & Debentures

Accrued interest

Cash and bank

Total pledged assets

The majority of the pledged assets are collaterals for issued letters of credit to

cover obligations under reinsurance contracts.

Contingent Liabilities 2004 2003

Guarantees on behalf of subsidiary 990,153 1,084,682

Future commitments to invest in risk

venture capital company 136,886 156,815

Total pledged assets and

contingent liabilities 2,625,839 2,268,662

–35,177

–25,262

–113,244

–5,423

–173,683

–399,857

–17,543

–22,254

–124,937

–164,734

–235,123

1,306,395

3,658

188,747

1,498,800

Note 23 • Employees, Administrative expenses and the allocations

–25,865

–16,045

–68,356

–2,207

–110,266

–278,591

–15,908

–12,012

–107,824

–135,744

–142,847

885,846

2,739

138,580

1,027,165

............................................................................................................................................................................

2004 2003

Average number of employees

Sweden 97 92

Belgium 58 61

United Kingdom 36 36

Singapore 10 11

Switzerland 1 1

of which,

women 105 101

men 97 100

Total average number of employees 202 201

Whereof number of board members, President and other senior

members of management

Men 4 3

Women 0 0

Total 4 3

Administrative expenses and the allocations

Personnel expenses

Salaries and other remunerations

Salaries and compensations –154,908 –118,634

Social security expenses –41,547 –31,798

Pension expenses –23,795 –12,390

Other Personnel expenses –5,924 –5,503

Total salaries and other remunerations –226,174 –168,325


and other expenses

remunerations

Directors –60 0

President –3,600 –1,344



Total –5,975 –1,658


and other expenses

remunerations

Directors –60 0

President –4,076 –1,298



Total –6,372 –1,507

Remuneration is paid to external members of the Board of Directors pursuant to

resolution taken at the Annual General Meeting of Shareholders. Compensation

for the President and other senior members of management comprise base

salary, bonus and other compensations such as car benefits and pension.

Allocation between base salary and bonus shall be commensurate with the

employee's responsibility and authority.

Upon termination initiated by the company the President is entitled to severance

pay equal to one year’s salary.

......................................................................................

......................................................................................

Annual Report 2004

38 39

Stockholm, March 1, 2005

Steven Fass

Chairman of the Board of Directors

Lars Ek Gert Lindberg Göran Thorstensson

President & CEO

Our Auditors’ Report was submitted on April 4, 2005

Matts Edin Catarina Ericsson Henrik Hedqvist

Authorized Public Accountant Authorized Public Accountant Authorized Public Accountant

Appointed by the Swedish

Financial Supervisory Authority

Annual Report 2004

38 39

Auditors’ Report

We have audited the annual accounts, the

consolidated accounts, the accounting

records and the administration of the board

of directors and the managing director of


(publ) for the year 2004. These accounts

and the administration of the company and

the application of the Annual Accounts Act

for Insurance Companies when preparing

the annual accounts and the consolidated

accounts are the responsibility of the board

of directors and the managing director.

Our responsibility is to express an opinion

on the annual accounts, the consolidated

accounts and the administration based on

our audit.

We conducted our audit in accordance

with generally accepted auditing standards

in Sweden. Those standards require that

we plan and perform the audit to obtain

reasonable assurance that the annual ac-

counts and the consolidated accounts are

free of material misstatement. An audit in-

cludes examining, on a test basis, evidence

supporting the amounts and disclosures in

the accounts. An audit also includes as-

sessing the accounting principles used and

their application by the board of directors

and the managing director and significant

estimates made by the board of directors

and the managing director when preparing

the annual accounts and the consolidated

accounts as well as evaluating the overall

presentation of information in the annual

accounts. As a basis for our opinion con-

cerning discharge from liability, we exam-

ined significant decisions, actions taken

and circumstances of the company in order

to be able to determine the liability, if any,

to the company of any board member or

the managing director. We also examined

whether any board member or the manag-

ing director has, in any other way, acted

in contravention of the Insurance Business

Act, the Annual Accounts Act for Insur-

ance Companies or the Articles of Associa-

tion. We believe that our audit provides

a reasonable basis for our opinion set out

below.

The annual accounts and the con-

solidated accounts have been prepared in

accordance with the Annual Accounts Act

for Insurance Companies and, thereby,

give a true and fair view of the company’s

financial position and results of operations

in accordance with generally accepted ac-

counting principles in Sweden. The statuto-

ry administration report is consistent with

the other parts of the annual accounts.

We recommend to the general meeting

of shareholders that the income statement

and balance sheet for the company and

the group be adopted, that the profit be

dealt with in accordance with the proposal

in the administration report and that the

members of the board of directors and the

managing director be discharged from

liability for the financial year.

To the general meeting of the shareholders of Sirius International Insurance Corporation

(publ) Corporate identity number 516401-8136

S t o ckho lm , April 4, 2 0 05

Catarina Ericsson

Authorized Public AccountantMatts Edin

Authorized Public Accountant

Henrik Hedqvist

Authorized Public Accountant

Appointed by the Swedish Financial

Supervisory Authority

Annual Report 2004

40

Combined Ratio

Net claims incurred in relation to net

premiums earned and operating expenses

(both commissions and own expenses) in rela-

tion to net premiums earned.

Net Technical Provisions

Total technical provisions (premium & claims

provisions) less reinsurers’ share

of technical provisions.

Solvency Capital

Total of shareholders’ equity + deferred taxes

(or untaxed reserves in the parent company) +

excess values of investment assets.

Solvency Ratio

Solvency capital in relation to net

premium income.

Definitions

2 3

HEADOFFICESirius International Insurance Corporation (publ)SE-113 96 Stockholm, Sweden.Visiting address: Birger Jarlsgatan 57BTelephone: +46 8 458 5500Telefax: +46 8 458 5599 (Reinsurance) +46 8 458 5595 (Corp. Accounting & Control)

Sirius International Insurance Corporation (publ) Belgian BranchMont Saint Martin 62B/2BE-4000 Liège, BelgiumTelephone: +32 4 220 8611Telefax: +32 4 232 1999 (Underwriting) +32 4 232 1998 (Accounting/Claims) +32 4 232 1997 (Life) +32 4 232 1995 (Aerospace) +32 4 232 1994 (Finance)

Sirius Rückversicherungs Service GmbHBallindamm 7DE-20095 Hamburg, GermanyTelephone: +49 40 30 95 19-0Telefax: +49 40 30 95 19-21

Sirius International Insurance Corporation (publ) UK BranchThe London Underwriting Centre, 3 Minster Court, Mincing LaneLondon EC3R 7DD, Great BritainTelephone: +44 20 7617 4900Telefax: +44 20 7617 4919

Sirius International Insurance Corporation (publ) (Asia Branch) Singapore24 Raffles Place #10-01/02, Clifford Centre048 621 Singapore, SingaporeTelephone: +65 6435 0052Telefax: +65 6435 0053

Sirius International Insurance Corporation (publ) Labuan Branchc/o MNI Offshore Insurance (L) LtdLevel 11 (B) Block 4 Office TowerFinancial Park Labuan ComplexJalan Merdeka87000 FT Labuan, MalaysiaTelephone: +60 87 417 672 73Telefax: +60 87 417 675

Sirius International Insurance Corporation (publ), Stockholm, Zurich BranchBellerivestrasse 49CH-8008 Zurich, SwitzerlandTelephone: +41 43 443 0180Telefax: +41 43 443 0189

Fund America Reinsurance Company, Ltd.P.O. Box HM 1826Hamilton HM HX, BermudaVisiting address: Victoria Hall, Victoria StreetTelephone: +1 441 295 5950Telefax: +1 441 298 7800

Scandinavian Reinsurance Company LimitedP.O. Box HM 2275Hamilton HM JX, BermudaVisiting address: The Bank of N.T. Butter-field building, 6th floor, 42 Reid StreetTelephone: +1 441 295 2743Telefax: +1 441 292 6580

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