Rating agency AM Best has revised the outlooks to positive from stable and affirmed the Financial Strength Rating of A- and the Long-Term Issuer Credit Ratings of “a-” of Convex Insurance UK and Convex Re.
Both entities are wholly owned subsidiaries of Convex Group, the non-operating holding company.
The ratings reflect Convex’s consolidated balance sheet strength, which AM Best assesses as very strong, as well as the group’s adequate operating performance, limited business profile and appropriate enterprise risk management.
Convex has demonstrated good market acceptance since its inception in 2019, exceeding USD 1 billion of consolidated gross written premium in 2020, its first full year of operation.
In addition, it has successfully raised an additional USD 1.5 billion of committed capital from new and existing investors, which brings the group’s total committed capital to USD 3.2 billion.
Convex is expected to maintain risk-adjusted capitalisation comfortably in excess of minimum required for the strongest assessment, as measured by Best’s Capital Adequacy Ratio (BCAR), taking into account AM Best’s additional capital requirements for new company formations.
The group’s balance sheet strength is supported by a conservative investment portfolio and good financial flexibility. A partially offsetting rating factor is Convex’s material exposure to catastrophe risk and its dependence on reinsurance to manage this risk.