CEO Egan: SiriusPoint is beginning to establish an execution track record as stock leaps on strong Q2

SiriusPoint CEO Scott Egan said the Bermuda company is in the early stages of earning back its credibility as an underwriting business, as he expressed pride in the strong results generated year-to-date but added it is “hungry” to continue its performance upswing.

  • Egan: “We’re beginning to develop an execution track record”
  • CEO declares “major surgery is over” on remediation, pivoting towards growth
  • SiriusPoint sees reinsurance “as a really important part of our capability”
  • Bermuda specialty company has ambitions to be “best-in-class” in its chosen markets
  • SPNT shares jump 7% on Thursday in positive reaction to results; +73% YTD

Egan made those points in an interview with The Insurer on the day after SiriusPoint reported that underwriting income soared in the second quarter to $82mn on the back off strong earned premium growth, favorable reserve development, and incurring no cat losses in the quarter.

Among Egan’s other messages is that SiriusPoint “is open for business”. He also gave an update on the timeline for its insurtech stake sales, saying that the process wouldn’t be rushed.

“This is not about me, I am deeply proud of the progress that my colleagues and I have made over the last nine months or so,” Egan said earlier today. He also praised SiriusPoint’s staff while also acknowledging that some of the turnaround progress had already begun before he joined a year ago.

SiriusPoint has generated a $189mn underwriting profit in H1 2023 - up from $22mn at the same point last year - and improved its combined ratio in that period to 84.4 percent from 98 percent.

Investors have reacted positively to the improved results by sending up SiriusPoint’s share price by more than 73 percent year-to-date to $10.14 per share, including a 7 percent jump today.

“I think what we're beginning to develop is an execution track record, and the reason we're not complacent is because to actually deliver the results that we're delivering is hard work, but it's not by accident,” he added.

Despite SiriusPoint’s strong first half, Egan said he and his team at SiriusPoint are taking nothing for granted.

“There's a lot of blood, sweat and tears going into this and where we are at the moment is not perfect, but the really exciting part is there's lots more that we think we can do to improve the organization further,” he explained.

“The message is that we're all hungry, we're staying focused. And we know we've got a job to do in the second half of the year,” he commented.

“We're doing nothing here that isn't what I would term sustainable. I'm not interested in doing something for a short-term gain, what we're trying to do is build this organization to be fit for the future, and deliver sustainable performance,” Egan noted.

No cat losses is positive, but focus is on core margin improvement

Egan called the first half performance “fantastic”, as he revealed a focus on how the company is performing on an underlying basis, stripping out the benefits gained from the $1.3bn loss portfolio transfer it completed earlier this year with Compre.

“I don't want to just walk past the cat part, because that was one of the things that used to hurt this company all the time, and the first half year has not been a quiet cat-half year for the market, [but] it's been a quiet cat half year for us,” the former RSA executive commented.

“But to be honest, ex-LPT is what we're interested in,” Egan said, in laying out core underwriting improvement as SiriusPoint’s priority. “Our results with the [LPT impact] are great, but I'm really interested in the underlying performance.”

He continued: “We are not at the levels of performance of our peers, of some of the best-in-class in our marketplace [whose levels of performance are more mature], and therefore, we know we have to improve the performance. And that will come from a series of things like improving the underwriting, grip, and control and performance, you know, continuing to be more efficient.”

“Major surgery is over”

Egan said SiriusPoint’s ambition now is to be among the “best-in-class” in the markets where it operates, and said the ambition towards that objective is “what's driving us as an organization”.

“The major surgery is over but there's never a moment in time where I as the CEO of an insurance company and our CUO David Govrin will never be obsessing about parts of the portfolio, and working out how we can improve them further,” Egan said.

Discussing the firm’s growth objectives, Egan said the message to the market is that SiriusPoint is “open for business” as he expressed satisfaction that the top-line “isn’t collapsing” despite having undertaken remedial exercises.

The CEO reported his company is seeing “good growth opportunities across all areas of our business”.

“We're growing in the areas that we want to grow, and we're taking portfolio actions in the areas that we feel we need to and where we can take rate, we're taking rate in the same way that everyone else is,” Egan added.

Program caution

Egan called SiriusPoint’s A&H division “a steady grower”, while adding that the North American programs business has a “strong pipeline”. But he said that SiriusPoint would be deliberate in the pace at which it does new program deals moving forward.

“We don't want to do too many, because we want to make sure that we bring them into the organization, embed them properly, and use them as a platform for growth,” Egan commented.

The CEO also called SiriusPoint’s international segment a “strategic growth area”, noting it had notched “some really good wins” in the Lloyd’s market.

“But these are the first steps to reestablish what I would call credibility in the market…the first baby steps towards our ambition,” Egan said.

“We don't want to rush it, we don't have to rush it, we're an underwriting first company, so that always comes first”.

“We see reinsurance as a really important part of our capability”

Despite pulling back in international property cat, Egan pushed back against any perception that SiriusPoint was de-emphasising the importance of its reinsurance division.

“We see our reinsurance division as a really important part of our capability,” Egan said, “and just because we're not doing property cat internationally, does not mean in any way, shape or form that we are not up for reinsurance.”

“Proportionately,” Egan said, “we will grow insurance over reinsurance, but we think [reinsurance] is a really, really strong and important part of our armory. And actually, we think it's a really important part of a proposition to the market.”

Egan said he had some concerns regarding the possible perception that SiriusPoint’s reinsurance offering was not a top priority.

Mindful of next month’s global reinsurance gathering in Monte Carlo, he concluded: “We see it as a really important part of a proposition to our customers”.