Convex Insurance: A Data Driven Procurement Transformation

Convex is an international specialty insurer and reinsurer founded by Stephen Catlin and Paul Brand. With operations in Bermuda, London and Europe, Convex occupies a unique position in the insurance industry combining unrivalled experience, reputation and a legacy free balance sheet. 

Procurement is now firmly on its way to becoming an established strategic business partner, as enterprises the globe over, start to tap into the function’s burgeoning insights and unique position at the heart of modern business. 

Convex Insurance decided to enhance its procurement capabilities in 2020 when it recruited experienced Vivek Pai to head up a complete procurement transformation at the company. Pai has over 15 years of procurement experience gained in consulting and in-house procurement roles across a diverse set of sectors, including financial services, energy, legal and professional services. 

“I joined Convex two years ago,” says Pai from his London office. “My initial challenge was to develop and lead the procurement function. It was an intriguing opportunity because it’s rare that you get the ability to start with a blank sheet of paper, with the autonomy to exercise the creativity and judgement to build the function. I was also compelled by the ethos and vision of the company’s founders, who are clearly industry leaders, and are trying to build something special and innovative with Convex – it’s great to be part of the journey, and to be able to contribute positively to the realisation of the vision for the company.”

Convex Insurance is an international specialty insurer and reinsurer founded by Stephen Catlin and Paul Brand in 2019, operating in Bermuda, London and Europe. Its website says “Convex occupies a unique position in the insurance industry combining unrivalled experience, reuptation and a legacy free balance sheet.” And the procurement transformation at Convex was fully aligned to the forward-thinking insurer’s overall strategy and the core operating principles, of being: flexible and scalable, future-led, supportive of the market leading low expense ration, while leveraging data to drive better decisions and execute the right outcomes (high quality outputs, mitigating risks).

“The foundation to the procurement transformation was via the devleopment of a robust operating framework for the function.”

A procurement transformation

According to Pai, that functional operating framework was the basis for the procurement strategy, which outlines the key components of activities that the procurement function will undertake. “It outlines the governance requirements, operational delivery structure, and the monitoring and reporting,” Pai explains. “And is centered around the regulatory requirements that we need to adhere to. We very much take a risk-based approach to our supply management. Therefore, risk management and the implementation of robust controls are an inherent part of the procurement operating framework. When we think about the opening challenge, it was centered around strategic thinking as to how we develop a well-controlled, robust, future-led procurement team. And then the next phase was to build on the solid foundations, to develop the suite of standard operating procedures, and the procurement policy. And then go into implementation-mode from there on in, with periodic review cycles to drive continuous improvement.”

Pai’s first year was primarily spent developing the operating brain work for the function: developing the policies, the process and prioritising the build of the function. “In parallel, and of equal importance, I focused on establishing the key relationships throughout the business, and developing a strong internal engagement model,” he explains.

Pai’s second year at Convex has been predominantly based around developing the people, systems and maturing the function as his role expands. “My role has recently changed in that I was asked to lead our Tactical Change function, which I was more than happy to take on. I’m very keen to keep learning and developing from a personal perspective, and it’s great that these opportunities are presenting themselves. My management team (COO & Operations Director) have provided the support and guidance to drive my career development in the right trajectory, which I’m extremely grateful for.”

Procuretech

One of Convex’s core corporate principles is to leverage modern technologies to drive better decisions across its functions, which is a concept that can be applied to the procurement function, particularly in reference to the implementation of new systems. “My goal is to ensure that we’re armed with the right data to make well informed sourcing decisions, to mitigate organisational risk, and ultimately deliver strong commercial outcomes.”

According to Pai, it provides a far more powerful narrative if you’re able to harness that data and derive useful insights for the business. “For example, at Convex, we’re currently developing an MI suite based on our third party supplier ecosystem that combines datasets from various sources to provide insights on items such as risk, cost and performance. The intent is really to utilise these insights to optimise the management of our third party supply base.”

Procurement strategy

So, how does Pai describe the procurement strategy at Convex? “I’d say our strategy is evolving, and subject to continuous improvement – true of any transformation. The overarching vision is ultimately to develop a high performing function, with a strong value proposition to our business. The methodology in which I have framed the goals is to map against a functional maturity curve. The current aim at Convex is to implement category strategies for key areas of expenditure, which include, IT, data, outsourcing, and professional services. So far, we’ve received tremendous buy-in and support from the category stakeholders, including members of our senior leadership team.

“Our JAGGAER supplier portal will be inherent to implementing the strategy and housing the pipeline of initiatives that we’ve established for each respective category. A key component of category management is the ability to utilise data, and we’ll be capturing data and insights from JAGGAER to help evolve and further enhance our category strategies, allowing us to recalibrate and adapt as appropriate.”

Pai and his team at Convex enjoy a great collaborative relationship with JAGGAER as they develop the systems based on the fundamental operating frameworks and processes. “Based on my prior experience to joining Convex, I was fairly familiar with the landscape of e-Procurement systems. And we carried out a competitive process to select an appropriate system that could cover the key criteria of our functional delivery – with the initial scope of eSourcing, due diligence, contract management, third party risk management and supplier performance management. We conducted a thorough market assessment to determine and select the best system to incorporate our requirements. And the end result was that JAGGAER was overall the best fit for Convex, which led us to our decision to move forward and implement the solution.”

“We couldn’t be happier with our relationship with Convex. there aren’t many organisations in the insurance space that take such a modern and innovative approach to procurement, but at the same time so grounded in best practice,” says Simon Thompson, Sales Director, JAGGAER. 

Pai continues: “It’s been a collaborative relationship. We’ve solicited ideas for the way we implement and optimise processes. JAGGAER’s consultants have been really forthcoming in terms of working with us to make sure our processes are replicated within JAGGAER in the most appropriate way, given the soft parameters of the system.”

“At JAGGAER we pride ourselves on our flexibility and extensibility,” Thompson explains, “We don’t want to be a vendor, we want to be true technology partners to execute on your strategic roadmap in whatever form that takes. Whether it be cutting edge automation or setting up rock solid procurement processes, we’re there to make sure our customers’ goals are met.”

“Convex has taken full advantage of this collaborative partnership. I’m excited to see where we can continue to grow together and how the procurement function at Convex will continue to be an example of best-in-class procurement,” Thompson concludes.