S&P Global Ratings revised Convex Re’s outlook to positive from stable, anticipating continued broad expansion aligned with its business plans, maintaining a combined ratio of approximately 90% over the next two years, and remaining well capitalised with capital exceeding S&P’s 99.99% benchmark.
This revised outlook extends to Convex group’s operating subsidiaries: Convex Insurance UK Ltd., Convex Guernsey Ltd., and Convex Europe S.A.
Additionally, S&P affirmed its ‘A-‘ insurer financial strength ratings on all entities.
Since its launch in 2019, Convex Re has significantly grown its operations, writing over $4 billion in gross premiums written in 2023, with projections to exceed $5 billion by the end of 2024.
In 2023, the group achieved its second year of underwriting profit alongside positive net income, recording a net combined ratio of 88.8% and net income of $503 million attributable to common shareholders. S&P expects Convex to maintain a combined ratio of approximately 90% from 2024 to 2026, with annual net income forecasted between $400 million and $500 million.
Convex continues to maintain robust capital levels, with substantial redundancy exceeding S&P’s 99.99% risk-based capital benchmark, supported by strong results and investing in growth rather than paying dividends.
Looking ahead, S&P noted, “We could raise the rating by one notch over the next two years if Convex generates underwriting results that are at least in line with ‘A’ rated peers while retaining risk-based capital adequacy in line with our extreme stress benchmark (99.99% confidence level).”
