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SiriusPoint’s A- rating placed on creditwatch by S&P

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S&P

Rating agency S&P Global Ratings on Tuesday placed its A- financial strength rating of Bermuda insurer and reinsurer SiriusPoint Ltd. on watch for a potential downgrade.

A- is widely regarded as the lowest rating insurers can have and remain on many brokers’ secure insurers lists.

In a statement, S&P noted several recent senior executive changes at SiriusPoint and said the company’s strategy of moving from reinsurance to insurance “is critical for the company to improve its operating performance and maintain its competitive position.”

“We placed all of our ratings on SiriusPoint Ltd. and its core subsidiaries on creditwatch with negative implications,” the S&P statement said.

In May, Siddhartha Sankaran resigned as chairman and CEO of SiriusPoint and was replaced on an interim basis by Daniel Malloy, who was previously an executive at the company.

In June, the company announced that Prashanth Gangu, chief operating officer and president, insurance and services, had also resigned.

S&P said it expects SiriusPoint to post a “breakeven” combined ratio in 2022 and a combined ratio of 97% to 99%, “more in line with peers,” in 2023. The rating agency also noted that SiriusPoint had seen “major losses” from hedge fund investments and negative investment income, which resulted in a $213 million net loss for the first quarter of 2022.

“SiriusPoint plans to reduce the current proportion of hedge funds to 3%-4% by 2025 from 6% currently,” S&P said.

In a statement responding to the S&P announcement, Mr. Malloy said: “As part of our transformation we have made significant progress over the last five quarters, re-underwriting our business, reducing volatility across our reinsurance and investment portfolios, and growing our insurance and services segment.”

The company “is making good progress” in its search for a permanent CEO, he said.