SiriusPoint’s new CEO ‘not complacent’ after it swings to massive 2022 loss

Global specialty re/insurer  SiriusPoint swung to a heavy loss in 2022 on the back of catastrophe and investment hit, despite investing the year rejigging its book in order to balance portfolio and reduce underwriting volatility. The company’s CEO Scott Egan, who  took over the reins in September last year, claimed “progress” but said he feels “confident but not complacent” moving into 2023.

The re/insurer reported a big loss of $403 million in full year 2022, with a net loss in the fourth quarter alone of $27 million. The loss for the year compared to the $42 million profit it made the year before.

The firm’s combined ratio, however, improved to 96.4%, compared with 109.1% a year earlier.

SiriusPoint highlighted that the improvement in its underwriting results was driven by lower catastrophe losses compared to the prior year, as well as higher premium growth in Insurance & Services that generated underwriting income, partially offset by lower favourable loss reserve development.

The re/insurer was hit by $138 million of cat losses including $81 million from Hurricane Ian last year. It posted a net investment loss of $323 million, which included a negative 29% return from its TP Enhanced Fund equivalent to a loss of $202 million.

Its total revenues last year remained almost unchanged at $2.1 billion though its reinsurance segment enjoyed some growth posting gross written premiums of £1.5 billion, an increase of $171 million on the year before.

On the reinsurance side of the business, it also stressed that it has rebalanced its book away from volatile global property business. “We rebalanced our property portfolio by decreasing our market share and exposure in the global property catastrophe reinsurance business as well as reducing other property reinsurance with material catastrophe exposure,” management said.

Egan said: “We are pleased with the progress shown in our underwriting results in the second half of 2022. It gives us a strong platform and momentum to build on for 2023 as we look to reinforce our credentials as an underwriter. Added to this is the strong contribution from our MGAs on both an underwriting and fee basis, which we will look to enhance and leverage further where it complements our underwriting strategy.

“Our 2023 journey is well underway. We will continue to reduce volatility and improve quality in our underwriting results as we re-build stakeholder confidence in the company. In addition to our underwriting improvements, we have also materially repositioned our investment portfolio, reducing volatility, capital intensity and locking in higher yield. Our owned and part-owned MGAs continue to produce stable capital-light earnings on the back of a growing top line. Finally, we aim to improve the effectiveness and efficiency of our operating model with targeted cost reductions during 2023 and 2024.

“We feel confident but not complacent as we look into 2023, repositioning the company for profitability, growth and long-term success. We have a healthy balance sheet, excellent people and resources, strong client and broker relationships, and a diversified business model that has potential to deliver higher returns. We look forward to sharing updates on our meaningful progress as we go through the year.”

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