The growth story of SiriusPoint over the last two and a half years has been built on restructuring, repositioning, and, according to its CEO, underwriting discipline.
Discussing the re/insurer’s full year 2024 results with Re-Insurance Business, chief executive Scott Egan (pictured) looked back on the hard work it has taken to get the business out of the ‘tight spot’ of 2022.
Egan noted that there are four key pillars behind this underwriting improvement, the first of which comes down to managing volatility. “Going back to 2022, the company was taking risks that weren’t commensurate with the size of its balance sheet,” he said. “We started off in a position where we were just too volatile and taking outsize risks. So, we took decisions to exit some of that volatility – and property-cat international was probably the largest and most significant [exit].
“We want to take risk, but we want to manage volatility within a tighter set of guide-rails than we have in the past. We've set very clear risk appetites about what we will and won't do.”
There’s no magic ingredient when it comes to balancing premium growth with minimizing volatility, he said, and fundamentally it comes down to discipline. SiriusPoint has the capital to lean in where market conditions are good and where there’s an alignment of interest with customers. Equally, it’s unafraid to pull back and shrink its capacity where it doesn’t see that fit.
The second pillar is founded on “doing what you’re good at”, Egan said, and that’s meant focusing on markets, specialisms and products where it can bring real expertise. Inevitably, that has meant exiting certain areas where its capabilities were not up to scratch.
“We have an ambition that we would like the business to be larger and have more scale but that will take time,” he said. Market segments, such as accident & health, which have a long track record of growth and profitability are examples of where SiriusPoint is more than happy to grow over time. “We’ve grown in property this year. And the reason for that is because, having made some decisions in property in the past around volatility, we had to shrink and therefore we were slightly underweight.
“The good news is that as we're growing our London Business, we're able to pick up property opportunities within London. The great news about that is it also diversifies the risk, because it's not just Atlantic hurricane, which you would pick up if it was US opportunities. So, we're growing in property, but we're growing also in different areas in property, which offers good diversification.”
Credit and bond, aviation, marine or energy are some of the key specialty areas for SiriusPoint and examples of where it will be targeting further growth as new opportunities present themselves. “The opportunities in those areas tend to present themselves through really specialist MGAs and we've got some terrific partnerships where we can work across those specialisms. And in 2024, our specialty business has grown.
“The area we're the most cautious on is casualty where there have been very well publicized headlines during the last few years on reserve strengthening. The debate is whether the rating environment is keeping pace with the claims environment. I think the markets, in general, are presenting a good opportunity, though not all of them, as casualty is a very broad heading. Something like public D&O, I just wouldn’t go near - but in other areas of casualty, we will grow but thoughtfully and carefully.”
The third pillar of SiriusPoint’s strategy is focused on creating and maintaining the right partnerships – which means partnerships with MGAs and programs that share its philosophy and culture. “We never enter any relationships where we haven’t got to know them over time,” Egan said. “We want our relationships to be long-term and able to survive the tougher moments, as well as the good moments because you will have both.”
The foundation of a healthy partnership is one where there’s mutual respect for the capabilities and expertise of both sides, he said. “We actually introduced 19 new MGA relationships in 2024, so that's a good evidence point that the recipe is working both ways,” Egan said.
The fourth and final pillar revolves around recognizing that underwriting is a skill and one that businesses need to continually push themselves to be better at.
“It's not just about risk selection, it's about the terms and conditions that we wrap around things, the policy wordings, the orientation towards detail,” Egan said. “We're not afraid to take risk, but in the risk that we take, we're very selective, and we manage it very tightly.”
