SiriusPoint’s Egan rules out future MGA equity investments in “underwriting first” strategy

SiriusPoint CEO Scott Egan has vowed to further decrease the group’s equity investments in MGAs as the carrier takes an underwriting-first approach.

In an interview with The Insurer TV, Egan highlighted how the group had already reduced its number of equity MGA investments by around 30 percent since his arrival as CEO in 2022, with further divestments planned.

“We have equity investments in a number of MGAs and when I came here, there were around 36. We've managed to reduce that to 25 and I've been very clear that we will not have that quantum of investments in MGAs,” he said.

Egan said such investments were more aligned with "venture capitalists" rather than an "underwriting-first company” such as SiriusPoint.

In addition to not aligning with SiriusPoint's new strategic outlook, Egan viewed such investments as causing unnecessary regulatory pressure.

“Maintaining those levels of investments, and the oversight, and the governance that it needs, is a huge drain on the company,” said Egan

Egan highlighted the group’s “underwriting first” approach as a major driver of its turnaround in 2023, when it reported a full-year underwriting profit of $376mn, up from $83mn in 2022, and achieved a company record 16.2 percent return on equity.

In his underwriting outlook for the year ahead, Egan echoed concerns over casualty claims trends – a prevalent theme at this year’s Bermuda Risk Summit – but said SiriusPoint saw no need to pull back from the class or strengthen prior-year provisions.

“We've seen many examples where people have felt the need to strengthen their casualty reserves. I don't feel SiriusPoint is in that situation,” he said.

“If we can keep on top of those trends and price accordingly, then I think we'll be okay” said Egan

Egan did voice concerns that rates may come off too quickly in property lines.

"Property catastrophe, in particular, needed a market correction and I always worry slightly when we go from market correction to rates coming off,” said Egan.

“The quantum by which the market corrected isn't something that was going to replicate year-on-year,” he said. “But this isn't an industry or a line of business, where all of a sudden, the industry is making super profits.”

“We will keep a discipline, both on rate and on terms and conditions,” the SiriusPoint CEO added.

Watch the Scott Egan’s full interview with The Insurer TV to find out about:

  • SiriusPoint’s turnaround since his arrival in 2022
  • The next steps on the company’s improvement journey
  • Growth opportunities at Lloyd’s and in the wider London market