Interesting times ahead

As far as times to take over the role of chief executive officer in a new company go, the start of 2021 was probably not the most ideal.

With a pandemic, a series of natural catastrophe losses and an industry struggling to meet its cost of capital, there has probably never been a worse time to step into the shoes of the reinsurance chief.

Yet that is exactly where SiriusPoint’s Sid Sankaran found himself as he took the helm of the Bermuda-based carrier formed from the merger of Bermuda-based specialty reinsurer Third Point Re and multiline re/insurer Sirius Group.

Despite the myriad challenges, the executive is looking ahead to a brighter future, and he met Bermuda:RE+ILS to discuss his plans for the company and what the coming months hold for the market as we head into renewal season.

Sankaran began his working life as an actuary with management consultant Oliver Wyman, before moving on to roles at AIG working under Peter Hancock and Brian Duperreault and with health insurtech Oscar in the US, of which he remains a board member.

Stepping into the role of CEO of a major international reinsurer for the first time presented a whole new challenge, he says.

“I’m a first-time CEO so there’s a tremendous amount to learn. I’m very humbled by the fact that we’ve been able to attract some great people.

“I’m also very thankful to have a great and committed team working hard to build something interesting and turning it around, but somewhat under the radar.”

Four core values

SiriusPoint is very much a Bermuda carrier, and Sankaran says that the Island retains its status and reputation as a centre of innovation within the industry, with the company now part of the ‘class of 2020’ of firms which have set up following major losses.

“Bermuda remains a hotbed of innovation. It’s a jurisdiction that embraces and supports talent and entrepreneurialism. I keep coming back to the four core values of the company: be open, be pioneering, be yourself, be entrepreneurial.

“Entrepreneurialism is a word we use all the time here. Bermuda is at the forefront of that. It’s one of the major insurance and reinsurance markets in the world. And every decade there since probably the 1940s has seen innovation.

“In the 1990s a new wave of formations followed Hurricane Andrew, and many companies formed after 2001 and 2005. Now there’s a class of 2020. We’re a proud Bermuda reinsurer, and there are a lot of advantages to being here.”

While SiriusPoint itself is a new entrant to the market, its constituent companies have been around for some time.

The relationships that the company holds stretch back throughout its predecessors’ 75 years of history in the industry, and Sankaran says these ties would help make the impact of its approach felt by the middle of next year in the market and ultimately strengthen the new entity.

“We’re in a unique position where we consider ourselves a new company, part of the class of 2020, but we have a 75-year history and established relationships with clients and brokers around the world,” he says.

“As we approach renewal season, we’re very focused on our core values. We plan to be flexible, nimble, and focused on where opportunities lie.

“But ultimately, our goal is to be a much stronger and profitable organisation. For us, as a company, as we look at next year, I am optimistic that the market is going to see the benefits of our underwriting portfolio review coming through.”

Renewals narrative

It is quite a time for a new CEO to be approaching his first renewal season as the leader of a company.

While many in the reinsurance markets have pointed to clear signs of prices hardening as we head into 1.1, there remains debate as to whether that really is the case, with the industry remaining attractive to capital which continues to pour in despite the last 18 months of losses.

Sankaran says that ultimately the issue of surplus capital still hangs over these renewals, even if there are signs that prices are heading upwards come January, in some cases at least.

“We’re having many conversations virtually, and they’re still not the same as an in-person meeting. The narrative in the market is around a market with clear signs of hardening,” he says.

“People aren’t fully ready to call this a hard market as traditionally defined, despite the fact there’s been massive economic disruption and hefty claims in the last year. I think that’s a function of the industry still having too much capital.

“For SiriusPoint, our vision is how do we create interesting partnerships, and we’re not just in the business of being a pure capital provider, because capital is still too abundant and too cheap.

“There has to be more discipline in the marketplace, for the reinsurance market to be successful,” he concluded.