Convex hits $3bn of GWP in 2022 but investment side causes $142m loss

Convex reported its results for 2022, revealing it had surpassed the $3bn mark for gross written premium.

The Bermudian firm squeezed into underwriting profitability with a net combined ratio of 98%, improved from a loss-making 117% the year before.

The startup specialty insurer and reinsurer showed a 43% increase in gross written premium to reach $3.035bn, up from $2.115bn the prior year.

Net premium earned was $1.686bn, an increase of 62% from $1.042bn in 2021.

Improved underwriting performance was not enough to avoid a net loss, driven by investment losses and foreign exchange effects.

Convex made a net loss of $142m, a decrease from $158m the previous year.

Rising inflation and interest rates had an adverse effect on financial markets globally, Convex noted, generating unrealised losses, leading to a negative investment return of $107m, down from a positive investment return of $25m in 2021.

Stephen Catlin, executive chair of Convex Group, said: “I would like to thank my colleagues for another tremendous year. It’s through their dedication and expertise that Convex continues to build its reputation in the market and to have surpassed $3bn of GWP in less than four years is truly impressive.

“We continue to experience strong rating conditions and January’s renewals reflected that. However, our market must continue to work hard to provide exceptional service to its clients, as well as demonstrate its value to the wider community after a decade of disappointing returns. I am confident that we, as an industry, are up to the task; this is a period of exciting opportunity and developments for the market.”

Paul Brand assumed the role of group CEO In July 2022.

Brand said: “These results reflect the hard work of our colleagues and superb support from our brokers. I’m incredibly proud of what we’ve accomplished.

“But it’s not just about the numbers. When we launched Convex, building a respectful and thoughtful culture was also a top priority, but we aren’t complacent and continue to invest in our people and culture. 2023 promises to be yet another exciting year, with GWP expected to exceed $4bn,” he added.