Convex Group, the international specialty insurer and reinsurer, has reported its first annual net profit since inception, announcing 2023 net income of $503.2 million, a significant improvement on the $142.2 million loss seen in 2022.
The 2023 net income figure includes the establishment of a deferred tax asset of $67.7 million related to the enactment of Bermuda’s corporate income tax.
In terms of growth, Convex achieved a 39% year-on-year rise in gross written premium to more than $4.2 billion in 2023 compared with just over $3 billion in 2022.
Net earned premium also increased by 39% to more than $2.3 billion from $1.7 billion recorded in 2022.
The re/insurer highlights anticipated attritional losses in the year, as well as complexities from numerous natural catastrophes and man-made events. Nevertheless, losses were in line with expectations given Convex’s market share and also a benefit from favourable prior year development.
Despite these losses, Convex has reported a 2023 combined ratio of 89.6%, which is a huge improvement on the 98% seen in 2022.
The company’s first annual profit was also supported by a positive investment return of $240.4 million, reversing the loss of $107 million in 2022, driven by strong core fixed income returns as a result of high starting yields on the portfolio and a fall in risk-free yields during the last quarter, explains the firm.
“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,” said Stephen Catlin, executive chair of Convex Group.
“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,” he added.
Paul Brand, CEO of Convex Group, commented: “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.”
