AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Convex Europe S.A. (CES) (Luxembourg) and Convex Guernsey Limited (CGU) (Guernsey).
Convex received regulatory approval on 15 September 2021 to set up CES, which will enable the group to directly service policyholders across the European Economic Area following the UK’s exit from the European Union.
Currently, CES’s UK branch is still awaiting Prudential Regulation Authority and Financial Conduct Authority approval.
CGU, meanwhile, was incorporated on 28 May 2021 in Guernsey as a specialist insurance company with an initial focus on security risks.
Both entities are ultimately wholly owned subsidiaries of Convex Group Limited (Convex) (Bermuda), the non-operating holding company of the group, and the outlook assigned to AM Best’s Credit Ratings is positive.
The rating agency explained that the ratings reflect Convex’s consolidated balance sheet strength, which is assessed as very strong, as well as the group’s adequate operating performance, limited business profile, and appropriate enterprise risk management.
AM Best further noted that CES benefits from intra-group reinsurance support from Convex Re in the form of a 75% quota share after third-party reinsurance, while CGU benefits from support in the form of a 100% quota share reinsurance from Convex Re, an affiliated company.