In a letter to shareholders, SiriusPoint Chief Executive Officer (CEO) Scott Egan has asserted that the specialty re/insurer has “been working at pace and already taken significant action to establish a firm foundation for future success.”
His comments follow the company’s acknowledgement of a proposal from Third Point CEO Daniel Loeb to take SiriusPoint private.
Loeb has suggested that a potential acquisition of all of SiriusPoint’s shares would improve the company’s financial position and enable it to better execute on its turnaround strategy.
While Egan did not speak to any potential deal in his letter, which formed part of SiriusPoint’s 2022 annual report, he did highlight the various areas in which his company has already worked to reduce volatility and improve its performance.
“We are beginning to see the positive impact of the work carried out to address the volatility and underperformance in our underwriting portfolio, with results becoming apparent,” Egan told shareholders.
“Our catastrophe losses were significantly lower in 2022 than in 2021, despite 2022 being a heavy year for insured catastrophe losses,” he continued. “Our business was profitable in 2022 with the exception of Property Catastrophe, which we have taken meaningful steps to address. With the transformation of our International platform, our balancing associated with the Property portfolio is complete.”
Egan also noted an ambition to grow in the Accident & Health space in addition to building capabilities and presence in the Lloyd’s market and developing its North America Specialty Program business, all of which he says will be supported by a revised organizational structure.
“We also addressed the volatility in our investment portfolio, de-risking significantly and repositioning with the aim of optimizing our returns rather than maximizing them,” he added. “Today our portfolio is primarily fixed income-focused, short duration and high quality.”
SiriusPoint has significantly reduced our overall property catastrophe exposure as a result of its actions, with property now accounting for approximately 18% of the group gross premiums versus 31% last year.
Its probable maximum losses based on a 1-in-100-year event, on a per occurrence basis, have accordingly reduced substantially by around 50% in the last 18 months and the company expects further refinements during this year.
In addition to lowering volatility and redeploying capital, in March SiriusPoint announced a ground-up Loss Portfolio Transfer on approximately $1.3 billion of reserves, for business underwritten by its international reinsurance business and Syndicate 1945.
Egan says the transaction “draws a line” under discontinued business and further strengthens the company’s balance sheet by $100 million.
