AM Best affirms Convex subsidiaries’ A ratings

By Ryan Hewlett

June 6 - (The Insurer) - AM Best has affirmed the A financial strength ratings and “a” long-term issuer credit ratings of Convex Group's operating subsidiaries.

The affirmation covers Bermuda-based Convex Re Limited (CRL), Convex Insurance UK Limited (CIL), Luxembourg-based Convex Europe SA (CES) and Convex Guernsey Limited (CGU).

All four entities have been assigned a stable outlook.

AM Best said on Thursday that the ratings reflect Convex’s consolidated balance sheet strength, which it assesses as very strong, as well as the group’s adequate operating performance, neutral business profile and appropriate enterprise risk management.

The ratings factor in the strategic importance of CRL, CIL and CES to Convex, while CGU’s ratings consider the significant reinsurance support it receives from CRL.

AM Best said Convex has demonstrated “consistently improving” underwriting results since its inception in 2019, with an 87% combined ratio in 2024 marking the group's third consecutive sub-100% full-year combined ratio.

Convex in April reported gross written premiums of $5.16 billion for 2024, an increase of 22% year on year, and confirmed its entry into the Lloyd's market through the launch of Syndicate 1984.

Syndicate 1984 has an initial target of 150 million pounds of premium in 2025 and is backed by Names capital.

AM Best noted that the group’s balance sheet strength is supported by “good financial flexibility”, evidenced by an equity capital raise of $1.0 billion in 2020 and the issuance of perpetual preference shares of $500 million that were drawn down fully in 2023.

However, an offsetting rating factor is Convex’s material exposure to catastrophe risk and its dependence on reinsurance to manage this, said AM Best, adding that the this risk is mitigated partially by a reinsurance panel of excellent credit quality.

Convex was launched in September 2019 by Stephen Catlin, its current executive chair, and Paul Brand, its CEO, with $1.8 billion of committed capital from backers including Onex Partners and PSP Investments.