SiriusPoint has announced plans to close three offices from which it underwrites property catastrophe reinsurance and reduce its footprint in two more, as it looks to restructure its underwriting platform following a net loss of $98 million for the Q3 period.
The company reported an underwriting loss of $47 million for the third quarter of 2022 on a combined ratio of 107.7%, after taking $115 million of catastrophe losses, worth 18.7 percentage points on the combined ratio, including $80.1 million of losses related to Hurricane Ian.
However, it still represents an improvement on the $283.5 million of catastrophe losses booked in the same period last year, which accounted for 58.2 points on a combined ratio of 150.2% and included $132 million for the European floods and $100 million for Hurricane Ida.
For the first nine months of the year, SiriusPoint’s underwriting loss was $66.0 million on a 103.9% combined ratio, with $137.7 million of catastrophe losses.
Looking at the company’s reinsurance business specifically, this segment incurred a loss of $75.9 million on a 126.1% combined ratio for Q3, and a loss of $73.0 million on a combined ratio of 108.2% for 9M.
In light of these ongoing losses, SiriusPoint has taken the decision to scale down its property catastrophe reinsurance operations by shutting its offices in Hamburg, Miami and Singapore, and reducing its footprint in Liege and Toronto.
Following the anticipated closures and scaling of its operating platform, SiriusPoint will continue to serve clients and underwrite North American property catastrophe business from Bermuda, and international property catastrophe business from Stockholm.
“Today’s announcement and the rescaling of our property catastrophe platform is an important step in stabilizing SiriusPoint’s reinsurance business and positioning the Company for underwriting profitability in this volatile market,” explained CEO Scott Egan. “With these actions, we provide clarity on our future priorities, our risk appetite, and our strategy to win in a competitive market.”
“The decision to reduce our global footprint and headcount was not an easy one,” he added. “It was driven by the significant, increasing effects of climate change, including under-modelled perils, and the challenges faced by the catastrophe reinsurance market, which, for consecutive years, has seen poor historical performance and inadequate returns on capital. My executive management team and I are fully committed to enabling a smooth transition for our colleagues who will be impacted by this change.”
Alongside this announcement, SiriusPoint also revealed that Monica Cramér Manhem, President International Reinsurance and CEO SiriusPoint International, is set to retire and will only continue to lead the company’s international business until a successor is found.
At the same time, David Govrin has been promoted to the expanded role of Global President of SiriusPoint and Chief Underwriting Officer, and Dhruv Gahlaut is joining the Company and the Executive Leadership team as Head of Investor Relations and Chief Strategy Officer.
In other notable points from SiriusPoint’s Q3 results, its Insurance & Services Segment generated segment income of $0.5 million consisting of an underwriting loss of $8.7 million on a 102.8% combined ratio and net services income of $9.2 million, with the underwriting loss driven by an increase in adverse loss reserve development.
The company also reported a net investment loss of $28 million for the Q3 period and a loss of $376 million for 9M.
“Our Third Quarter results show demonstrable progress year-over-year, despite catastrophes in the quarter, including the significant impact of Hurricane Ian,” Egan concluded. “We are seeing improvements as a result of underwriting actions taken over the last eighteen months, which are gaining momentum. Our focus is on making SiriusPoint a more efficient, more profitable, underwriting first business. Our 2022 performance to date shows that we are not standing still in this regard, and we anticipate further progress as we continue to develop and execute our plans.”