Convex turns profit for first time
Bermuda-based Convex Group had announced its first annual profit in 2023 as it turned a $142 million loss into a $503 million profit.
Convex, which launched in 2019, said the profit came on the back of an improved underwriting profit and a jump in investment returns.
However, Convex executive chairman Stephen Catlin warned "there is still work to be done" as 2024 is likely to see a "hyper-active" north Atlantic hurricane season and challenges in the casualty market.
Catlin said: “2023 was a very successful year for Convex. The scale and market presence we have achieved is nothing short of impressive, I commend the team for their efforts.
“While 2023 was a positive year for many, there is still work to be done. Market conditions and rates have improved significantly, however, 2023 was a quiet year for the North Atlantic hurricane season and many are forecasting a hyper-active 2024. The casualty market is also now experiencing the predicted issues created by reserving deficiency and currently rates are rising.”
Convex said gross written premiums rose 39% to $4.2 billion from $3 billion in 2022 while net premium earned increased 39% to $2.3 billion from $1.7 billion. The company's combined ratio improved to 89.6% from 98% although its net underwriting income was not given.
The company enjoyed a $240 million investment return compared to a loss of $107 million in 2022, which it attributed to strong core fixed income returns, driven by high starting yields on the portfolio and a fall in risk-free yields during the last quarter.
In common with many other Bermuda re/insurers, Convex established a deferred tax asset of $67.7 million related to the enactment of Bermuda’s corporate income tax, which comes into effect in 2025.
In its statement, Convex said: "The company achieved its first annual net profit since launch and significantly improved its underwriting result over 2022. As well as anticipated attritional losses, Convex was faced with the complexities of a number of natural catastrophes and man-made events. Losses from these events were in line with expectations given the company’s market share and it benefited from favourable development on prior years."
Paul Brand, CEO of Convex Group, said: “My colleagues have worked tremendously hard to achieve these results.
"We launched into a dislocated market in 2019, and the consistent hard work undertaken since then has further built our underwriting capabilities, market relevance, and resilience, allowing us to achieve further growth, whilst continuing to serve our client’s needs.”
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