International specialty re/insurer Convex Group has reported a notable increase in its financial performance for the year ending December 31, 2023.
The company’s gross written premiums surged to $4.217 billion, marking a 39% rise from $3.035 billion in 2022. Net premiums earned also grew by 39% to $2.337 billion, up from $1.687 billion the previous year. Convex achieved an underwriting profit with a net combined ratio of 89.6%, improving from 98% in 2022.
Investment income rebounded to a positive $240.4 million in 2023, following a loss of $107 million in 2022. This improvement was attributed to robust core fixed income returns, bolstered by high initial yields on the portfolio and a decline in risk-free yields during the latter part of the year.
The net profit attributable to common shareholders significantly increased to $503.2 million in 2023, recovering from a net loss of $142.2 million in 2022. This year’s profitability included a deferred tax asset of $67.7 million related to the new corporate income tax laws in Bermuda.
The previous year also marked Convex’s first annual net profit since its inception, demonstrating considerable enhancement in underwriting results from the previous year.
The company explained that despite facing numerous natural disasters and man-made events, losses remained within anticipated ranges due to Convex’s calculated market share and benefited from favorable developments from previous years.
Stephen Catlin, executive chair of Convex Group, remarked on the company’s performance and the success it reaped in the previous year.
“2023 was a very successful year for Convex,” Caitlin said. “The scale and market presence we have achieved is nothing short of impressive, I commend the team for their efforts.”
Catlin also made note of the potential challenges ahead, especially in terms of the unpredictability of the weather.
“While 2023 was a positive year for many, there is still work to be done,” he said. “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.”
Paul Brand, CEO of Convex Group, commended the firm’s effort and the role Convex colleagues played in achieving 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, while continuing to serve our client’s needs,” Brand said.
Convex’s 2023 results stand in contrast to its fiscal report for 2022, in which the firm noted a net loss, mainly attributed to investment losses and foreign exchange impacts.
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