The Evolution of SiriusPoint: A Journey of Restructuring and Underwriting Discipline
The growth trajectory of SiriusPoint over the past two and a half years has been marked by significant restructuring, strategic repositioning, and a steadfast focus on underwriting discipline. In a recent discussion about the re/insurer’s full-year 2024 results with Re-Insurance Business, CEO Scott Egan reflected on the extensive efforts that have been undertaken to navigate the organization out of the challenging circumstances it faced in 2022.
Egan identified four fundamental pillars that underpin this notable underwriting improvement. The first pillar emphasizes the importance of managing volatility. “Looking back at 2022, it was clear that the company was engaging in risks that were disproportionate to the size of our balance sheet,” he explained. “Initially, we found ourselves in a position characterized by excessive volatility and the assumption of outsized risks. Consequently, we made the strategic decision to exit some of that volatility, with the property-cat international segment being the most significant area of exit.”
“Our goal is to embrace risk, but we are committed to managing volatility within a more defined framework than in the past. We have established very clear risk appetites regarding what we will and won’t pursue.” Egan underscored that there is no simple formula for achieving a balance between premium growth and minimizing volatility; rather, it fundamentally revolves around maintaining discipline. SiriusPoint possesses the capital to capitalize on favorable market conditions and align with customer interests, while also being prepared to scale back its capacity when it does not find a suitable fit.
The second pillar is rooted in the principle of “doing what you’re good at,” Egan noted. This has led to a concentrated focus on markets, specialties, and products where SiriusPoint can leverage its true expertise. Inevitably, this has necessitated the exit from certain areas where the company felt its capabilities fell short.
“We aspire for our business to grow larger and achieve more scale, but we understand that this will take time,” he remarked. The organization is particularly keen on market segments such as accident & health, which have a proven track record of growth and profitability, and these are areas where SiriusPoint is poised to expand over time. “This year, we have seen growth in our property segment. The rationale behind this growth stems from our previous decisions regarding volatility, which necessitated a reduction in our footprint, leaving us slightly underweight.”
Egan continued, “The positive aspect is that as we expand our London business, we are able to seize property opportunities within London, which also diversifies our risk portfolio. This diversification is crucial because it mitigates our exposure to specific risks, such as Atlantic hurricanes, that we would otherwise encounter with U.S. opportunities. Thus, we are not only growing in property but also exploring various domains within the property sector that offer attractive diversification.”
Key specialty areas such as credit and bond, aviation, marine, and energy are on SiriusPoint’s radar for further growth, particularly as new opportunities arise. “The prospects in these domains often emerge through specialized MGAs, and we have developed strong partnerships that allow us to collaborate effectively across these specialties. Notably, our specialty business has experienced growth in 2024.”
However, Egan expressed caution regarding the casualty sector, which has been the subject of considerable media attention in recent years, particularly concerning reserve strengthening. “The ongoing debate revolves around whether the rating environment is keeping pace with the claims environment. Overall, I believe the markets are presenting good opportunities, albeit not universally, as casualty spans a broad spectrum. For instance, I would steer clear of public D&O, but we are open to thoughtful and careful growth in other casualty areas.”
The third pillar of SiriusPoint’s strategy centers on forging and nurturing the right partnerships—specifically partnerships with MGAs and programs that align with its philosophy and culture. “We never enter into relationships without taking the time to get to know our partners,” Egan stated. “Our goal is to cultivate long-term relationships that can endure both challenging times and periods of success, as both will inevitably occur.”
He emphasized that a robust partnership is built on mutual respect for the expertise and capabilities of both parties. “In 2024, we successfully introduced 19 new MGA relationships, which serves as a strong indication that our collaborative approach is yielding positive results on both sides,” Egan concluded.
The fourth and final pillar acknowledges that underwriting is a refined skill that requires continuous improvement. “It’s not solely about risk selection; it also encompasses the terms and conditions we apply, the policy wording, and our meticulous attention to detail,” Egan noted. “We are not averse to taking risks, but we are very selective about the risks we take and manage them with precision.”
