Aiming to be something different: Convex

Lidia Bozhevolnaya and Jenny Williams from Convex

Specialty insurer and reinsurer Convex was founded in 2019 with a focus on complex risks, claims and underwriting. The company has raised $2.7bn in committed capital in just over 18 months. Robin spoke to Lidia Bozhevolnaya from Strategic Projects and Portfolio Optimisation Director Jenny Williams about Convex’s plans for 2021 and what they are looking for from potential new partners.

Robin: What do your roles in Portfolio Optimisation and Strategic Projects involve? 

Lidia: My role is deliberately ambiguous - Convex only launched in 2019 so we have lots going on from a strategy point of view. I was hired to lead a particular project related to a new market entry, and now I am also working on another project relating to building out capabilities that would create competitive advantages for Convex in the longer term. 

Jenny: The Convex Portfolio Optimisation team is focussed on a variety of activities - from supporting and helping facilitate differentiating capabilities for inwards underwriting, to creating resilience through our portfolio and ceded reinsurance strategies. 

We are doing this using a mix of tried and tested methodologies and also through experimenting with prototypes we either build ourselves or partner with external experts on. My role focusses on finding the best partners and designing the right interactions with them to help us achieve our goals. 

Robin: Convex is less than two years old. Presumably, the priority at the start was to look for technology and partners to get the company up and running quickly and cost-effectively?

Jenny: It was not necessarily about getting up and running quickly and cost-effectively to the detriment of everything else. Convex is fortunate to be free from legacy systems and processes, and that is not to be wasted.

We wanted to build the company carefully, creating solid building blocks upon which we can create a world-class company that can adapt as and when the technology landscape inevitably changes over time. 

Robin: Do you share the prevailing narrative that Covid-19 has accelerated the digitisation of insurance?

Lidia: It depends on whose perspective we take. From a customer point of view - be it retail or commercial - I doubt their experience of purchasing and dealing with an insurer has changed; although their interactions with their brokers will have changed from face-to-face to video calls. In general, the COVID-induced lockdown, across all industries, has helped with shifting our mental paradigm from 'this can only be done face to face' to 'Actually, video is good enough too'.

From an internal operations point of view, the experience of lockdowns globally has catalysed an accelerated adoption of digital ways of working, much greater openness to the idea of flexible working, a stronger emphasis on work-life balance as well as mental health. There is nothing like a forced experiment to show even the most ardent sceptics that a lot of things can be successfully done digitally, remotely, flexibly. 

Robin: Do you see anything disruptive on the immediate horizon or just more slow and steady evolution?

Lidia: Looking at what's of interest to the general public in the insurance world and what gets a lot of headlines - it's insurtechs like Lemonade. Although they serve a useful purpose of showcasing a brilliant user experience/interface and a digital service model that should inspire other retail insurers, they are not the real disruptors. 

The real disruption in the retail space would come from players with huge customer bases who would not only seek to distribute insurance products but would aim to take control of the customer experience and the insurance product itself. Tesla and its new insurance company is a prime example, but there are other players who can and will do it such as Amazon or IKEA.

In the insurance industry itself, there's also the trend of non-insurance capital increasingly seeking to participate in insurance risks. There is a lot of available capital in the global financial markets looking for yields, and we are seeing ILS types of vehicles enabling capital to enter the insurance market. 

I don't see a rapid disruption happening in this space; this is much more of a long-term trend where we will see a persistent expansion of ways in which institutional and perhaps even retail investors can get access to a portfolio of insurance risks, thereby depressing overall levels of returns across insurance. I see this happening over a long-time horizon, so no panic just yet!

Jenny: Many of our clients face complex risks which do not necessarily lend themselves to the more classic automation hypotheses we see elsewhere in the industry. When we confront the real complexities of the specialty world and look at where the tech investment is falling in the insurance ecosystem - we're more likely to see an evolution of capabilities. 

We are starting to see real proof points in the tech-focused operational innovations in the complex commercial and specialty space; these improvements require a committed collaboration between technology and insurance experts so tend to be largely iterative.

Robin: What will be the Convex approach to innovation and engaging with innovators going forward?

Lidia: Convex is a greenfield company, it's entrepreneurial and aims to do things differently. But we are always happy to learn from ideas from outside, and we are not planning on building everything in-house. 

From my point of view, our engagement with external parties - be it start-ups, technology or innovation consultants, or anybody else for that matter - should be linked to a strategic priority for the business and a specific capability that we are aiming to build. 

We don't have a central point of contact for engaging with Convex from the outside, but we do try our best to coordinate internally and be consistent with our approach to the outside world. It's early days and we are still evolving our ways of working.

Robin: Are there specific themes or priorities for Convex for 2021 and beyond?

Jenny: Our founders, Stephen Catlin and Paul Brand launched Convex to build a world-class, specialty player that was legacy-free, technologically proficient and well-endowed with capital to provide a safe haven for our customers (this has been enhanced by our recent $1.0bn capital raise). 

We aim to offer something different to our clients and to engage with them in a true partnership based on fairness, dignity and respect and this underpins our strategy for 2021 and beyond. 

We now have over 300 people across our offices in London and Bermuda but attracting talented individuals to build the best team possible remains a priority. As does ensuring we deliver operational excellence and using data & analytics to do so. 

Data is at the heart of the Convex story and we believe strongly in the power of our idea to use data more intelligently to drive better and faster decisions; all the while helping us to build strong and enduring relationships with our brokers, stakeholders and partners. 

Robin: What type of people or companies is Convex looking to connect with?

Jenny: We love working with smart and proactive people who are passionate about problem-solving and get as excited about improving insurance and reinsurance as we do. A one-size approach isn't our style and we want to work in a way that acknowledges that. Whatever the nature of the partnership, we are guided by our principle of being straightforward and fair. 

We are also not afraid to try new things and underpinning this is our focus on creating an environment where all parties can really enjoy their work and truly feel like they are contributing to something exciting and helping us fulfil our goals.

Robin: Why has Convex joined the InsTech London community?

Lidia: Convex aims to be at the forefront of creativity and innovation in our industry, and InsTech London has grown to become an impressive hub of creativity, energy and ideas. We really appreciate the efforts of InsTech London to put on interesting and insightful events, share knowledge through podcasts and reports, and be the go-to people for intel on who does what in the insurtech community. 

It's a pleasure to be a corporate member and help support their work, which also benefits the start-up community. On a personal note, I have called for help and advice from InsTech London numerous times, and I always appreciate their pragmatic insights.

Robin: If you had one message to give to InsTech London members, what would it be?

Lidia: My message is keep going and thank you for working hard on bringing innovation into our industry. You are an inspiration to the rest of us! 

To the members who are corporates - let's keep on learning from and collaborating with our insurtech members, and let's collectively push for the evolution of our industry with the ultimate objective of providing a better proposition and a better service to all of our customers.

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