Scott Egan: ‘SiriusPoint is back’

SiriusPoint CEO Scott Egan says the Bermuda-based reinsurer has drawn a line in the sand on restructuring – it is now focused on profitable underwriting and continuous improvement.

But Egan, who joined the company 18 months ago when it was facing severe financial turbulence, said the company will not be pursuing market share at any cost. 

Egan was speaking to Bermuda:Re+ILS last week in the wake of SiriusPoint announcing its fourth quarter and full year profits, which saw the company bounce back strongly from its annus horribilis of 2022. 

The company executed a $700 million turnaround in 2023, recording an annual profit of $339 million compared to a loss of $403 million in 2022. For the fourth quarter, SiriusPoint earned $93.5 million, having lost $22.6 million in the same period in 2022. 

For the year, the company improved its combined ratio to 84.5% from 96.4%.

Despite the company’s success, Egan said there was more work to be done, which in some ways will be more challenging. 

“I said every quarter that went by that we were building trust, we were building confidence again, and internally, we were building momentum,” he said. “Therefore, the calendar year results send a very strong message, which is that SiriusPoint is back. 

“Alongside that there's a message of humility, which is there's no complacency, but we are a pretty determined bunch. Although we had a good first half of the year, I was always very clear that while the first half of the year shaped us, the second half of the year would define us. 

“I'm incredibly, incredibly proud of the staff and the effort that they've put in, and I think those of us who are a bit older really do understand that to shift our combined ratio by 10 points, to turn our net income round by over $700 million, to re-establish our capital strength, to remove the negative outlook from two rating agencies, to deliver a fifth consecutive quarter of underwriting profit, you know, and to deliver a record ROE of 16.2%, delivered ahead of our guidance on that a year early, delivered ahead of our cost guidance a year early, I think, really demonstrates how hard our staff have worked and I got an opportunity this morning to say thank you to them all, properly.” 

He added: “Honestly, I feel incredibly humbled and proud to lead the team and to lead the company. And I said to them, what I've just said to you, which is we are back. And there's a steely determination in our eyes as we get to 2024 to make sure that we build on the great progress. But there's no complacency because we know we have to keep proving it. 

“And the great news is we think there's a lot more potential around this organisation. But we also know that we have to keep showing improvement every single day within the company.”

The business took tough and big decisions in 2023, including shifting its underwriting away from property catastrophe to less volatile segments, de-risking its investment portfolio, reducing its investment in outside managing general agents and executing $100 million of cost reductions. 

Egan said the business must now go after more incremental growth – chasing one per cent gains rather than double digit increases.

“I have been very clear to the market that out turnaround is over,” Egan said. “We have moved to refinement now. But refinement means we chase the 1%. One of the hallmarks of good organisations, organisations that tend to perform at a higher level, is the ability to develop that muscle across the organisation, where we focus on the detail, and the detail matters.  

“If we do that well, then I honestly think this organisation can achieve the ambition that we have, which is to be amongst the best in terms of insurance and reinsurance in our markets. And that's our ambition, and we are definitely not there yet. So the opportunities are plentiful. But I think the approach is slightly different, which is now about incremental improvement.”

The company is forecasting essentially flat growth in 2024, Egan said, in part because it still has older underwriting contracts in place.

But he is optimistic there will be expansion through the development of relationships with MGAs in specific segments of the market. He noted that the company had made nine new distribution relationships in the last year. 

“The reason that we are so excited about them is they really offer us opportunity to grow in our targeted areas. Although the headline for 2024 is one of reasonably flat premiums, but we have taken out the things that have caused us a profit issue.”

He added: “We've got some really nice targeted areas of growth and as we go through 2024, as we move from turnaround to growth our ambition by 2025 is to be a growing company that people can see those areas of green shoots taking hold.”

He said the relationships are in very distinct markets where SiriusPoint sees room for growth. This includes fleet auto, onshore wind farms and in the Nordic region. 

Egan said the goal for the company now is to move from underperformance to “best in class”. 

“Our focus as we move from turnaround to growth, is to refine the portfolio that we have, to seek new opportunities, and where we can see those opportunities and they make sense, we will not be shy in executing against them.

But our journey is different now. The journey we're trying to go on from underperformance to best in class is a different journey to perhaps some of the more mature best in class players.”

Asked about reports Aspen was negotiating a reverse merger with Aspen insurance Group, Egan said bluntly: “We don’t comment on press reports.” 

Egan concluded by saying of the 2023 results: “these are not turnaround results any more. These are continuous improvement results and that’s what we will aim to do. We have set our ambition up there and we are going to try our best to get there.”

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