21 February 2024News

SiriusPoint: 2023 ‘marks the end of restructuring’

Bermuda-based re/insurer SiriusPoint has completed its restructuring after turning an annual profit of $339 million and will focus on building the business with an underwriting-first approach, chief executive Scott Egan said today. 

For the fourth quarter, the specialty re/insurer earned $93.5 million, having lost $22.6 million in the same quarter in 2022. For the full year in 2022, the company lost $403 million. 

Egan, who became CEO in September 2022 when the company had been hit by heavy losses, said: “At full year 2022, we set out our ambition to create a business which is simpler, generating less volatile earnings and delivering a double digit return on equity by 2024. We have made significant progress against these objectives in 2023. 

“As we look ahead following significant restructuring, our ambition in the medium-term is to create a business with an underwriting-first approach which can grow and deliver strong profitability in a more consistent manner.”

He added: “2023 was a turn-around year and marks the end of restructuring. It gives us a more stable platform to build from having exceeded our initial expectations. 

“We delivered our fifth consecutive quarter of positive underwriting result with the full year 2023 combined ratio for the Group’s Core operations at 89.1%. Our underwriting results were supported by the completion of our cost savings programme, which delivered more than $50 million of savings ahead of schedule. We have simplified the business and have taken great strides to improve our performance-driven culture.”

Egan said investment returns exceeded the company’s guidance with $284 million of net investment income for 2023 “with significantly less volatility”. 

He added: “We have made further progress around rationalising our equity stakes in MGAs which are down to 26 at year-end compared to 36 at the start of the year. Our consolidated MGA revenues grew 10.2% year to date, margin increased to 20.9% resulting in a 36.9% increase in our net service fee income.”

He said the results were ahead of the company’s financial results but added: “2023 is not a destination as we look to improve returns and achieve an ROE of 12-15% in the medium term. Our approach will be to remain prudent stewards of capital whilst maintaining a conservative capital position.

“Our improvement in profitability reflects the significant rebalancing and enhancements we have made across all areas of our business. In 2024, we look to further improve and deliver as we continue to build on last year’s strong foundation.”

The company produced return on equity of 16.2% for 2023. 

For the fourth quarter,  the company said it had core income of $46 million including $37 million in underwriting income and a core combined ratio of 93.4%.

The company recorded a deferred tax benefit of $101 million attributable to the enactment of the Bermuda corporate income tax. 

For the year, SiriusPoint had a combined ratio of 84.5% and underwriting income of $376 million.

The company said its core net services fee income was $50 million, up 36.9% from the year ended December 31, 2022, with service margin of 20.9%, up 4.1% from 2022.

Net investment income was $284 million with a total investment result of $273 million.

The company had fourth quarter gross written premiums of $715.6 million compared to $743 million in 2022. The company had loss and loss expenses of $365 million, down from $390 million in the same period. 

By segment, reinsurance shaved its combined ratio to 88.6% from 96.5% and generated underwriting income of $27.8 million in the fourth quarter compared to underwriting income of $9.8 million in 2022. The improvement in net underwriting results was primarily due to increased favourable prior year loss reserve development.

In insurance and services, income was $16.8 million compared $27.8 million in 2022 as underwriting income slumped to $9.2 million from $21.4 million while net services income edged up to $7.6 million from $6.4 million. 

“The decrease in underwriting results was primarily due to lower earned premium in Accident & Health and higher other underwriting expense. The increase in services income was primarily due to higher margins achieved in Arcadian,” the company said.

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.