Providing security and resilience in a high-risk world
The theme of the Bermuda Risk Summit is about the evolution of risk - how do you perceive the current environment and how is SiriusPoint positioned to approach it?
In an increasingly perilous world, it is the function and duty of the insurance and reinsurance markets to create resilience in the global economy. We can keep the wheels of industry turning, despite wars, global warming and the related increase in catastrophes, geopolitical unrest and economic uncertainty.
If you look at these risks paired with the impact of economic and social inflation; the increased severity and frequency of extreme (often un-modelled or under-modelled) weather events; the impact of artificial intelligence and the use of technology; and threats from cybercrime, you can see how the risk landscape is evolving constantly. Our role is to provide security and resilience against these perils, while at the same time pricing adequately for these new and evolving risks.
The industry can transform a high-risk world into a place where businesses can continue to operate with confidence.
The way SiriusPoint has chosen to approach this evolution of risk is to reduce the volatility in our underwriting portfolios, moving away from writing unprofitable and unsustainable property risk. Risk has to be evaluated and adequately priced in order to provide the right cover in the right location at the right cost. In 2023, the insurance and reinsurance markets were the best in recent memory. While we expect these tailwinds to continue in 2024, we predict a slowdown in rate increases. As an industry, we need to remain disciplined – particularly around attachment points, pricing and coverage.
At SiriusPoint, we pride ourselves on being an “underwriting-first” company, and will continue to build a consistent and balanced portfolio, allowing us to be well-placed to deal with the evolving risk landscape.
Since its inception in 2021 SiriusPoint has been through a series of well-documented changes – both in its executive team and its direction. What has changed since you joined as CEO in 2023, and what does the future hold?
This company has come a long way in a short period of time. In 2022, SiriusPoint was an outlier, and radical change was needed. Our volatility was high but we put a transformation plan in place to become a profitable underwriter. We decided to work with fewer and stronger partners, and we worked hard to reduce the uncertainties on our balance sheet and within our risk framework. We also set about building stronger teams with deeper expertise.
As recently reported following our 2023 full year results, we are making progress to achieve those ambitions. As a result of our re-underwriting and restructuring, our combined ratios for insurance and reinsurance improved 12.5 points to 89.1%, compared to 101.6% in 2022. Our results speak for themselves, but we are not complacent - we are a company on the march.
SiriusPoint can confidently say that the turnaround, heavy-lifting transformational part of our journey is behind us. We are now driving forward with purpose, intent and true clarity about the best-in-class business that we want to be. In 2024, we still have some refinement to do as we grow as a profitable company, but it will be significantly less as we build on the progress we have made.
What’s next for SiriusPoint?
SiriusPoint wants to become a top performing re/insurance company in the coming years. Our aim is to be among the names who consistently outperform the market year after year.
The underwriting actions that we have already taken – such as pulling back from international property cat, and re-focusing our program and MGA strategy to having fewer and deeper relationships - mean we can focus on the areas in which we want to grow.
We will continue to prioritise underwriting profits over premium growth in 2024 with our “underwriting-first” approach.
Our London business is currently below scale, and building this platform will be one of our top priorities. In terms of strategic markets, our London operation is a market that fits very well with our specialisms. On a relative basis, growth in insurance will be prioritised over reinsurance.
The great news for 2024 and 2025 is that we have created an exciting value creation plan for SiriusPoint. That is what every single member of the SiriusPoint team is focused on. By executing this plan successfully, we can create huge shareholder value, and a great customer franchise – something our employees can take pride in.
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