Canopius plots ambitious growth strategy after 2022 ‘reset’ amid loss
Lloyd’s global specialty re/insurer Canopius Group has set out an ambitious growth strategy across its regional business units in the UK, US & Bermuda, and Asia Pacific “without needing to rely on a strong economy or further hardening in market”. The move follows a “programme of transformation” and reset for the business last year.
“In delivering this growth journey, in 2022 we set about ‘resetting’ our operating model. We went through a restructure and ‘transformed’ the business to better align global products and regional expertise to unlock our full potential,” said Neil Robertson, group CEO of Canopius. “These results show the significant progress that has been made and represent a very positive step forward for our Group.”
Canopius made a loss after tax of $25 million, including a negative total investment return of $80 million, last year. Its gross written premiums increased to $2.3 billion (2021: $2.2 billion) with growth seen in all geographies. Its combined ratio was 93.6%, compared with 96.7% in 2021. Combined ratio in the US & Bermuda was 84%, UK 96% and APAC 90%.
“Our combined ratio of 93.6% is pleasing, particularly when considering the headwinds which our industry has faced this year,” Robertson noted. “We have withstood unprecedented geopolitical uncertainty, macroeconomic turmoil and, like others, our results were impacted by Hurricane Ian.
“The loss after tax of $25m was driven by negative investment return, without which we would have recorded a satisfactory pre-tax profit,” he further explained. “A negative investment return of $80m (-2.8%) is due to interest rate increases creating mark-to-market unrealised losses that we expect to unwind into 2023. Our defensive and short duration portfolio leaves us well positioned.
“2022 was challenging, however, we have weathered these challenges while building a better business which is now fully capable of harnessing the power of our talent and technology to unlock innovation, facilitate transition and drive enterprise and stakeholder value. Further, we have made great strides in improving systems and processes and are well positioned for implementation of IFRS17.
“We are now more in control of our own destiny and can reach our goals without needing to rely on a strong economy or further hardening in market conditions.
“We set out an ambitious strategy of growth over a three-year period, as a multi-national, multi-platform insurance company across three regional business units, the UK, US & Bermuda, and Asia Pacific.
“We have a business that is well-positioned to take advantage of a continued positive rating environment, and we expect the mark-to-market investment losses to unwind positively in the year. Canopius is very much focused on building a long term sustainable and robust business that benefits all our stakeholders, and delivers on our promises and commitments. We look ahead, confident in our ability to maintain momentum and deliver a strong underwriting performance in 2023.”
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