Sirius plans to launch E&S platform in 2020

Sirius Group has been working on a new E&S insurance platform that it hopes to go live with later this year as it continues to add capabilities ahead of its combination with Third Point Re in Q1 2021, The Insurer can reveal.

The move comes at a time of significant opportunity in the E&S market and wholesale channel with hard or hardening rates across the board.

The Bermudian (re)insurer confirmed to this publication that it was granted authority on 13 July this year to launch a New Hampshire domestic surplus lines specialty insurer for certain accident and health and property casualty lines of insurance business.

“Our goal is to launch our specialty insurance company before the end of 2020 (pending additional eligibility approvals),” said the company in a statement.

Further details of the initiative have not been provided but sources said the carrier has been working on the platform for some time.

It is thought that the project has been driven by Dan Wilson, Sirius Group’s US specialty president.

Wilson has also been president and CEO of Sirius America Insurance Company and according to the carrier’s website he is credited for leading the transition of Sirius America from predominantly a P&C reinsurance operation to grow its direct writings in A&H, property and surety.

The executive is also president and CEO of Sirius Insurance Agency, an MGA that focuses on the specialty environmental insurance market.

It is not known whether Sirius has already identified management or underwriting teams for its planned E&S platform, or what size it will start at.

SiriusPoint to build balanced portfolio

Separately, Third Point Re management at a KBW investor virtual conference today highlighted the capabilities of Sirius that would allow the combined companies to build out a balanced portfolio as a global specialty (re)insurer.

Third Point Re chairman Sid Sankaran – who will be chairman and CEO of the combined SiriusPoint operation when the $788mn acquisition of Sirius closes – said there would be a focus on building a well-diversified underwriting portfolio.

“Combining the two companies gives us a great opportunity in the market to cement ourselves as a meaningful specialty reinsurance play, but also some primary capabilities given all the assets and capabilities Sirius brings to the table,” he commented during the KBW fireside chat.

Current Third Point Re CEO Dan Malloy added: “One thing we didn’t have was the ability to offer partners insurance paper. Sirius has done the work and created the platform where they can offer non-admitted and admitted insurance paper.”

In an earnings presentation when the transaction was announced last month, it was suggested that the combined portfolio based on current books would amount to $2.5bn of gross written premium, split 35 percent property, 34 percent specialty and casualty, 24 percent accident and health and 6 percent run-off and other.

The combined entity would have a split of 78 percent reinsurance and 22 percent insurance, compared to a 71 percent reinsurance and 29 percent insurance portfolio at Sirius and Third Point Re’s current 100 percent reinsurance book.

Sirius currently has primary insurance capabilities in a number areas across its platform, including A&H in the US and UK, property via its Lloyd’s Syndicate 1945, surety in the US and environmental in the US.

The Insurer comment

SiriusPoint’s prospective chairman and CEO Sid Sankaran has already described the combination of the companies to this publication as “the first Class of 2020 reinsurer”.

One issue for start-ups is getting a platform up-and-running in time to properly capitalize on an opportunity.

For Sirius and Third Point Re, the platform was already broadly in place, with US, Bermuda, Lloyd’s and European operations.

It was lacking an E&S insurance platform, but the investment by Sirius in the lengthy process of creating the capability means that the carrier will bring a highly valuable tool to the combined operations when the deal is scheduled to close early next year.

As previously reported, the E&S sector is the focus of strong interest from start-ups and scale-ups, but securing a platform is proving a challenge for some potential entrants, because of a scarcity of ready made entities to buy and the time it takes to set one up from scratch.

With a platform of its own on schedule to launch this year, Sirius – and then SiriusPoint – looks to be positioning itself well for the E&S opportunity.