AIG and Onex AM partner up to take the reins of global re/insurer Convex
Insurer AIG is partnering with Canadian asset manager Onex to acquire global specialty re/insurer Convex. AIG will secure underwriting profits through a comprehensive quota share agreement, while majority ownership of Convex will go to Onex. To support this, AIG will provide new assets under management and take an equity stake in Onex, helping to finance Onex’s purchase.
“This is a very unique opportunity to invest in a top-performing global specialty company that we believe will drive incremental earnings growth for AIG,” CEO Peter Zaffino said of the deal, citing “confidence in Convex’s ability to consistently deliver outstanding results, strong returns and sustained revenue growth.”
As the deal unfolds, AIG will take a 35% stake in Convex for $2.1 billion and Onex will take 63% for $3.8 billion, leaving the fractional rump share in the hands of management. AIG will back the Onex purchase by acquiring a 9.9% equity stake in Onex for $600 million and by committing $2 billion to Onex’s private equity and credit strategies over the coming three years.
Onex is no stranger to Convex, having participated in the 2019 founding of the group hand in hand with industry veterans Stephen Catlin and Paul Brand. A $700 million rollover of Onex's lingering stake is calculated into the price tag. The $3.1 billion of new money includes $1.5 billion in cash, $1 billion of new debt and the $600 million equity from AIG.
But Onex is certainly strapped to Convex now: Convex is expected to account for 42% of Onex’s investing capital by deal's end.
AIG will onboard the underwriting result via a whole account quota share reinsurance deal for Convex from January 1, 2026. In its materials, however, AIG did not identify the level of the quota share or hint if pricing could have impacted valuation of its stake.
Onex hopes to take benefits from all sides: Convex is expected to increase the AuM handed to Onex, including by deploying capital into Onex's alternative asset strategies “over time.” AIG is supposed to “explore opportunities to form strategic relationships with Onex’s existing insurance portfolio companies.”
Governance through the three-way deal with its interlocking moving parts seems to show at least three captains working from a variety of helms. Onex will majority own Convex and AIG will appoint two directors to the Convex board and one to the Onex board. Convex executive chair Stephen Catlin, for his part, says the deal “secures the long-term independence” of his firm.
Convex, with equity valued $7 billion in total in the deal when counting in the management stake and a debt move, took praise from all sides. Investors are getting up to $6 billion of expected gross premium written in 2025 following 25% compound annual growth over the last three years that has rendered an 18% average return on equity for that period, Onex noted. The business underwrites what Onex calls “complex risks for large commercial clients across a diversified range of business lines” with a mix of 54%/46% insurance/reinsurance.
Over the last twelve months, Convex wrote $5.9 billion in gross premium, ceded $1.8 billion, then secured a healthy underwriting profit with a combined ratio at 90%, Onex claimed of the firm.
Peter Zaffino (pictured right), Chairman & CEO, AIG commented: “With Onex Corporation, Convex’s primary shareholder, we are building a strategic relationship with an outstanding team, led by CEO Bobby Le Blanc, that has significant experience investing in highly specialized insurance assets. I am pleased that Onex has committed to increasing its ownership share of Convex, preserving Convex’s independence for the long-term. AIG will also benefit from preferred access to Onex’ world-class investment funds, and I look forward to working with Bobby and his talented team as they continue to make strategic investments in various sectors.”
Stephen Catlin (pictured left), executive chair of Convex Group, said: “In six years, the team at Convex has built an extraordinary business. We have become a major player in global specialty insurance and reinsurance, with annual premium income up to $6 billion and operations in a range of global jurisdictions. We’ve known Peter Zaffino for over 20 years in numerous leadership roles. We greatly admire the contribution he has made to the industry as a whole and, together with the outstanding team he has built at AIG, the successful execution of his strategic vision, positioning AIG for growth and delivering attractive risk adjusted returns for AIG shareholders. This transaction secures the long-term independence of Convex and presents a range of exciting strategic opportunities. We would like to thank our founding shareholders, including Onex, for their unwavering support in establishing and growing the business, and our other supporters within the insurance market. Without them we would not be where we are today.”
Paul Brand, CEO of Convex Group, added: “This is a hugely exciting development for Convex. The Convex team have worked incredibly hard over the last six years to build a world-renowned insurance company, and we see this transaction as the start of the next chapter in our journey. We are delighted to continue our productive partnership with Onex, and that they have decided to make this considerable investment from their own balance sheet. We are also excited to begin a new relationship with AIG. This transaction positions us better than ever to service our clients and brokers, and take advantage of future market opportunities.”
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