Convex, Stephen Catlin’s new venture has now recruited 90 people including 20 product leaders and is opportunistically writing business—but it plans to really hit the ground running from the start of 2020, Catlin told Monte Carlo Today.
Convex was launched in April 2019 with an initial capital commitment of $1.8 billion. It has offices in the UK and Bermuda and will underwrite insurance and reinsurance for complex specialty risks.
“We are writing some business where we see an opportunity, but our main focus is getting ready for 2020,” Catlin said.
“We are building our infrastructure, acquiring personnel and starting to form distribution relationships. Rome was not built in a day though; this is not a short-term strategy, we have long-term capital. We want to build trust and respect from clients and build a sustainable business.”
The development of the business has taken on its own momentum since its launch, Catlin said. It has attracted talent largely by word of mouth, as opposed to using head-hunters.
“People are excited about what we are doing; lots of good people have wanted to talk to us,” he said. “I am delighted with the calibre of people we have attracted so far—they have the qualities we want, including entrepreneurial spirit, leadership capabilities and a deep knowledge within their fields.”
It has been relatively easy to attract good people—partly, he believes, because structural changes in the industry have left many quality executives disenfranchised.
“As we have seen companies get bigger, the people at the coalface feel increasingly distant from senior management. People with drive and entrepreneurial spirit want to work in companies where they have access to senior management who understand their challenges and tribulations,” he explained.
“Deputy CEO Paul Brand and I have always been at the coalface. We are recruiting kindred spirits who we will trust to take responsibility and make decisions.”
Catlin said that he estimates that the re/insurer will eventually write around 60 percent insurance and 40 percent reinsurance, although it will likely do more reinsurance initially given its lower barriers to entry.
He estimates some 70 percent of staff will work on the “more labour-intensive” insurance side, however. Around 85 percent of business will be written out of London and 15 percent from Bermuda.
Catlin added that Convex wrote some business in June and is being shown business. Clients he worked with before are keen to talk to Convex, he said, although he sees the next few months more as a precursor to 2020, as opposed to seeking business now.
“We have been very pleased with the interest we have seen from the distribution side and from potential clients,” he said.
“Catlin was the largest syndicate in Lloyd’s for a long time and led more than half of all the business it wrote. We had a reputation for being consistent and fair with clients and there is a gap in the market for that.”
He believes rates will continue to harden—and that there is less surplus capital to dampen this than people think.
“A number of tailwinds are moving rates upwards and all capital is being more discerning in terms of the risks investors are willing to take on.
“There is a long way to go on rates, but things are moving in the right direction. We are not offering a cycle play—we are in it for the long term. But, equally, starting out in a rising market is still better than in doing so in a poor market,” he concluded.
This story was originally published on our sister publication, Intelligent Insurer.
Monte Carlo 2019, Convex, Insurance, Reinsurance, Stephen Catlin, UK, Bermuda