SiriusPoint cuts headcount & global footprint in major shake-up at the top
SiriusPoint is ready to downsize its workforce and global footprint in a bid to bring its reinsurance business on track by steering away from property catastrophe risks via reduced market share and less exposure internationally. The company’s CEO Scott Egan (pictured), who just joined in September, has drawn up major restructuring plans that will see some more top officials head to the door and several offices close.
Monica Cramér Manhem, a member of SiriusPoint’s executive leadership team, president international reinsurance and CEO SiriusPoint International, is the latest to exit the business as part of a board reshuffle that Egan believes will help stabilise the company and make it “more disciplined” and better positioned for underwriting profitability in a volatile market.
The restructuring will see SiriusPoint close its offices in Hamburg, Miami and Singapore, and reduce its footprint in Liege and Toronto, the CEO revealed in its third quarter statement. SiriusPoint will continue to underwrite North American property catastrophe business from Bermuda, and international property catastrophe business from Stockholm.
“The company will reduce the locations from which it underwrites property catastrophe reinsurance,” Egan said. “With these actions, we provide clarity on our future priorities, our risk appetite, and our strategy to win in a competitive market.”
Egan explained the decision to reduce global footprint and headcount “was not an easy one”. He said, “It was driven by the significant, increasing effects of climate change, including under-modelled perils, and the challenges faced by the catastrophe reinsurance market, which, for consecutive years, has seen poor historical performance and inadequate returns on capital.”
“My executive management team and I are fully committed to enabling a smooth transition for our colleagues who will be impacted by this change.”
The changes to its executive leadership team will see David Govrin promoted to the expanded role of global president of SiriusPoint and chief underwriting officer. Additionally, Dhruv Gahlaut will join the company and the executive leadership team as head of investor relations and chief strategy officer, bringing equity analyst experience from companies including HSBC and Legal and General.
Cramér Manhem will remain in her role and works with Egan to appoint a successor.
Egan stated during the company’s Q3 investors call that its underwriting actions taken over the last 18 months are bearing fruit but it’s still early days, “there is much left to do to stabilise and improve underwriting performance, lower volatility and shift our business profile to be more heavily weighted towards insurance,” he admitted.
Reinsurance remains “an important part” of the business, but “will represent a smaller portion of the overall portfolio going forward,” Egan told the call.
Like the overall book, reinsurance will reduce property cat and SiriusPoint will “grow towards other lines” including accident & health and specialty lines where SiriusPoints sees “attractive risk-adjusted returns and lower overall volatility,” Egan said. Momentum in that direction should be sufficient to be visible in 2023 performance, he indicated.
In the third quarter 2022, SiriusPoint plunged to a net loss of $98 million, compared with a net loss of $48 million in the prior year. Its gross written premium totalled $844 million, with a split of 62% insurance and 38% reinsurance that reflected the company’s execution of a strategic shift towards Insurance & Services. That result was up from $641 million in the same period of last year. The combined ratio improved by 40 points to 107.7%.
Egan said the Q3 results showed “demonstrable progress” despite catastrophes in the quarter, including the significant impact of Hurricane Ian.
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