SiriusPoint’s full-year catastrophe losses for its core segments would have exceeded $150mn, instead of the actual $13.5mn, if it wasn’t for the Bermudian’s restructuring of its reinsurance business, according to CEO Scott Egan.
“What you can see from those two pieces of information is: the decisions that we took and the exit that we took actually manifested themselves in a real saving of real dollars,” he told this publication.
“While SiriusPoint has not had cat losses – or significant cat losses – in 2023, the market has. And therefore, we've intentionally positioned the book in a certain way.”
In comparison, the company booked full-year cat losses of $137.9mn in 2022, of which $80mn was attributed to Hurricane Ian.
In November 2022, Egan told this publication that the firm would reduce its international cat exposure by around 75% as part of its strategic repositioning.
Asked for updates on this statement, the executive said that the exposure reduction was “completed and finished a long time ago”. He added that the company had also reduced its probable maximum loss by 60% over the past 17 months. Property cat international had the most significant reductions, Egan said.
As a result of the restructuring, gross written premiums across SiriusPoint’s core reinsurance as well as insurance and services segments decreased 2.8% year on year to $3.3bn in 2023. The combined ratio for the segments, meanwhile, improved 12.5 points to 89.1%, compared to 101.6% in 2022.
During an investor call Wednesday, Egan said that 2023 was a “turnaround year” for SiriusPoint and that the firm would continue to prioritize underwriting profits over premium growth in 2024 in an “underwriting-first” approach.
“This company has come a very long way in a short period of time, and I think these results really demonstrate that SiriusPoint is on the march,” Egan told this publication.
MGA strategy
As part of its distribution strategy, SiriusPoint has reduced its equity holdings to 25 as of today from 36 in late 2022, with the last divestiture being Corvus, which it sold to Travelers in January.
Egan said he expects holdings to reduce further but declined to comment on how quickly or which might be divested.
“I haven't set any targets in terms of number and type. … The other thing that I haven’t committed to is what the destination number is,” he noted, adding that the only comment he could provide is that the company will have “significantly less”.
Egan said the focus is to have fewer and deeper relationships but that the company does not need to have equity stakes in MGAs to have a distribution arrangement. In 2023, SiriusPoint added nine new MGAs as distribution partners, without acquiring an equity stake.
“We will continue and have a desire and an ambition to have many trading relationships, but less investment,” he said.
Meanwhile, the executive declined to comment on media reports that SirusPoint and Aspen were holding preliminary talks around a deal that would see the Apollo-owned carrier reverse into its New York-listed rival.
Sources at the time placed a low likelihood on that potential deal being consummated, with significant obstacles yet to overcome.