AM Best Confirms Credit Ratings of Subsidiaries of Convex Group Limited

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LONDON–(BUSINESS WIRE)–AM Best affirmed the financial strength rating of A- (Excellent) and the long-term issuer credit rating of “a-” (Excellent) of Convex Re Limited (CRL) (Bermuda), Convex Insurance UK Limited (CIL ) (United Kingdom), Convex Europe SA (CES) (Luxembourg) and Convex Guernsey Limited (CGU) (Guernsey). All four entities are wholly owned subsidiaries of Convex Group Limited (Convex) (Bermuda), the group’s non-operating holding company. The outlook for these credit ratings (ratings) is positive.

The ratings reflect the strength of Convex’s consolidated balance sheet, which AM Best assesses as very strong, as well as the group’s adequate operating performance, limited business profile and appropriate management of business risks. The ratings reflect the strategic importance of CRL, CIL and CES to Convex, while CGU’s ratings reflect the significant reinsurance support it receives from CRL.

Convex has demonstrated good market acceptance since its inception in 2019, exceeding USD 2 billion in consolidated gross written premiums in 2021, its second full year of operation. Additionally, in the fourth quarter of 2020, it successfully raised an additional $1.5 billion in committed capital from new and existing investors, bringing the group’s total committed capital to $3.2 billion. The positive outlook reflects AM Best’s expectation that Convex’s underwriting portfolio will continue to grow and diversify profitably as the group expands its business. This could lead to a better assessment of the company’s profile.

Convex’s risk-adjusted capitalization was comfortably at its highest level at the end of 2021, as measured by Best’s capital adequacy ratio (BCAR), taking into account the additional capital needs of AM Best for new business start-ups. The solidity of the group’s balance sheet is supported by a prudent investment portfolio and good financial flexibility. A partially offset rating factor is Convex’s significant exposure to catastrophe risk and its reliance on reinsurance to manage this risk; however, this is partially mitigated by an excellent credit quality reinsurance panel.

The proper assessment of operational performance takes into account Convex’s current business plan, taking into account its competitive environment and increased execution risk during the start-up phase. Convex faces strong competition from well-established peers in its target markets and relies heavily on brokers to access business. Nevertheless, the likelihood of successful execution of the business plan is enhanced by the strong track record of senior management and underwriters who have extensive experience in the (re)insurance industry and the demonstrated acceptance of the group by the market. nowadays.

This press release relates to credit ratings that have been published on AM Best’s website. For all rating information relating to the release and relevant disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Assessment Activity Web page. For more information on the use and limitations of credit rating opinions, please see Best Credit Score Guide. For more information on the proper use of Best’s Credit Ratings, Best’s Performance Ratings, Best’s Preliminary Credit Ratings, and AM Best’s press releases, please see Guide to Proper Use of Best’s Ratings and Reviews.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in more than 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

Copyright © 2022 by AM Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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