Two Bermudian-headquartered organisations have signed an agreement for a ground-up loss portfolio transfer on a diversified portfolio of primarily reinsurance business.

The agreement between SiriusPoint Ltd, the global underwriter, and Compre, the international legacy group, covers approximately $1.3 billion of reserves, underwritten by SiriusPoint’s international reinsurance business headquartered in Sweden, and its Lloyd’s Syndicate 1945.

The portfolio comprises several classes of business from 2021 and prior underwriting years, with SiriusPoint retaining claims-handling authority on continuing business.

The announcement follows a comprehensive re-underwriting of SiriusPoint’s reinsurance portfolio and the restructuring of the company’s underwriting platform.

The LPT will be underwritten by Compre’s Class 3B Bermudian reinsurer, Pallas Reinsurance Company Ltd.

Scott Egan, SiriusPoint chief executive, said: “This is a transformational deal for SiriusPoint. It demonstrates decisive and continuing execution against our strategic priorities of simplifying our business, reducing future volatility and improving the profitability of our company.

“By transferring these reserves, we are aligning our balance sheet to our go-forward strategy. The expected substantial capital release should further increase our balance sheet strength, and the reserve redundancy of approximately $100 million validates our reserving policy while being accretive to returns.

“As stated at our recent earnings update, we feel confident about our prospects in 2023, with this deal providing another evidence point of our progress. I am pleased we are partnering with Compre once again, continuing a valued relationship with a transaction that supports us in realising SiriusPoint’s full potential.”

Compre CEO Will Bridger said: “Today’s announcement represents another important milestone in Compre’s evolution, and we are delighted to further assist SiriusPoint with the strategic repositioning of its reinsurance business.

“This transaction continues a valuable relationship, providing both significant diversification and growth to our balance sheet and enabling SiriusPoint to meet its strategic goals.

“As one of the largest transactions underwritten in the legacy market, it also demonstrates that Compre’s client-focused approach is recognised across the insurance and reinsurance industry for providing finality solutions on transactions of increasing significance.”

The transaction’s inception is subject to regulatory approvals and other conditions of closing.

SiriusPoint was advised on this transaction by AJ Gallagher & Co and Mayer Brown LLP.

Compre was advised by Debevoise & Plimpton LLP and EY.