CEO: SiriusPoint recovering, but there is still work to do

Scott Egan had a message for investors, his staff and the insurance industry after the company he took charge of 10 months ago produced a strong second quarter turnaround.  

The Bermuda-based specialty re/insurer made a $66 million profit 12 months after it suffered a $60 million loss on its way to an annual loss in 2022 of more than $400 million, including a $300 million investment loss.

“I'm really pleased with the progress that we're making,” chief executive officer Egan told Bermuda:Re+ILS. ”This isn't the destination, but I think we've made demonstrable progress in the last three quarters.

“The great news is we feel like we can keep that momentum going. And we feel like we can do better and actually that in itself is as important as the results because you will know and everyone will know these don't happen by accident.”

A buoyant Egan, who became CEO last September, said SiriusPoint had improved its performance in its three strategic areas - underwriting, managing general agencies and investing.  

SiriusPoint’s reinsurance underwriting income was $79.3 million compared to a $200,000 loss in the prior quarter, although its insurance underwriting income fell from $20.4 million to $8.8 million.
Gross written premiums rose to $887.1 million, up 9.1% from the previous year.

Egan said: “Despite obviously having to take some very well publicized underwriting portfolio surgery as I would call it, our top line grew five percent.

“That's great because we're growing in areas of our business that we want to grow. We're announcing new deals. We're seeing good growth potential beyond what I would call the rating environment which is obviously dominating the news at the moment, but we've seen good underlying organic growth in the areas of the business that we want.

“In underwriting performance, we are not compatible with the best in class in our markets because we started obviously, from a different place, but we are well on our way. And our ambition over time is to get ourselves up amongst the best in class in the markets that we operate, and we'll obviously try our best to do that.”

Egan also said he was happy with the company’s efforts to rationalise its relationships with managing general agents where the company had 36 outside investments when he joined the business.
It now has 33, although it is also adding partnerships where it made sense, including an agreement announced yesterday with Applied Surety Underwriters.

Egan said he was also proud of the improvement in the company’s investment performance, where investment income jumped to $68.5 million from $17.4 million, while realised and unrealised gains were $65.8 million compared to a loss of $141 million in the prior year.

He said: “We've delivered an investment performance that's actually above the top end of the guidance that we give to the market. We've completely revamped our investment strategy, that level of volatility, you know, is vastly reduced in our investment portfolio.

“Therefore, we look and feel a lot more like everyone else now, whereas for years in our past we didn't. I'm deeply proud of the team because they've worked incredibly hard to do that at the pace they have.”

Egan said the company was ahead of its target to reduce operating costs by $50 million this year.
“And in the first six months, we are at about $35 to $40 million, and that's really good progress in six months,” he said.

“It's also important that people understand that that's a net number. We've actually been taking money and reinvesting it in parts of the organisation as well.”

Egan said that some of the cost savings had come from reducing staff, not only in the international property catastrophe segment which the company had exited, but in other areas as well, especially where there was duplication of functions as the company moved towards the goal of “One SiriusPoint”.  But he also noted the company had added employees in areas where the company saw potential for growth.

These areas include accident and health, which he said had been growing strongly for seven years, North American reinsurance and property and casualty.

He added; “The area that probably we would want to see more growth in and we've set out as a strategic ambition is much more in our international book, in the end, and in particular, in London, which I've obviously been quoted on before, and we are we were feeling really upbeat and optimistic about the progress that we have done.”

He said expected to see more growth and noted that while the quarterly reinsurance performance was strong, he said he expected to see more growth in the insurance segment over time.

‘Strategically over time, but we would expect the insurance book to grow more than the reinsurance book, it's important that people hear and understand that reinsurance is a core part of this organisation.”  

Egan was at pains to credit staff who had worked hard to help the company turn around and also welcomed new chair Bronek Masojada, who took part in the quarterly earnings announcements for the first time after taking the chair in June.

“He brings built a huge amount of experience to the company,” Egan said of the former Hiscox CEO. “He's a great strategic thinker, and he's a great leader and I'm privileged to work alongside them genuinely and so it was really great for the first time to be to be you know, live action for the first time.”