Bermuda-headquartered re/insurer SiriusPoint and Compre, a global legacy group, have signed an agreement for a ground-up loss portfolio transfer (LPT) which covers approximately $1.3 billion of reserves underwritten by SiriusPoint’s international reinsurance business in Sweden, and its Lloyd’s Syndicate 1945.
This LPT is subject to regulatory approvals and other conditions of closing, and is on a diversified portfolio of primarily reinsurance business.
It’s the second significant reinsurance LPT between the pair, after Compre completed the acquisition of a $417 million legacy liability portfolio from SiriusPoint in 2021.
The new $1.3 billion LPT relates to a portfolio comprised of several classes of business from 2021 and prior underwriting years, with SiriusPoint set to retain claims handling authority on ongoing business.
The LPT will be underwritten by Compre’s class 3B Bermudian reinsurer, Pallas Reinsurance Company Ltd.
The news comes as SiriusPoint undertakes a comprehensive re-underwriting of its reinsurance portfolio, as well as the restructuring of its broader underwriting platform.
Scott Egan, SiriusPoint Chief Executive Officer (CEO), said: “This is a transformational deal for SiriusPoint. It demonstrates decisive and continuing execution against our strategic priorities of simplifying our business, reducing future volatility, and improving the profitability of our Company. By transferring these reserves, we are aligning our balance sheet to our go-forward strategy. The expected substantial capital release should further increase our balance sheet strength, and the reserve redundancy of approximately $100m validates our reserving policy while being accretive to returns.
“As stated at our recent earnings update, we feel confident about our prospects in 2023, with this deal providing another evidence point of our progress. I am pleased we are partnering with Compre once again, continuing a valued relationship with a transaction that supports us in realising SiriusPoint’s full potential.”
Compares CEO, Will Bridger, added: “Today’s announcement represents another important milestone in Compre’s evolution, and we are delighted to further assist SiriusPoint with the strategic repositioning of its reinsurance business. This transaction continues a valuable relationship, providing both significant diversification and growth to our balance sheet and enabling SiriusPoint to meet its strategic goals. As one of the largest transactions underwritten in the legacy market, it also demonstrates that Compre’s client-focussed approach is recognised across the insurance and reinsurance industry for providing finality solutions on transactions of increasing significance.”
SiriusPoint was advised on this transaction by AJ Gallagher and Mayer Brown. Compre was advised by Debevoise & Plimpton LLP and EY.
