AM Best has revised the outlooks of Convex Insurance UK (Convex UK) and Convex Re (Bermuda), wholly owned subsidiaries of Convex Group, to positive from stable, having affirmed their financial strength ratings of A- (excellent).
AM Best highlighted Convex’s very strong consolidated balance sheet, adequate operating performance, limited business profile and appropriate enterprise risk management, in making the change, as well as the strategic importance of both subsidiaries to the group.
Convex has demonstrated good market acceptance since its inception in 2019, AM Best said, exceeding $1 billion of consolidated gross written premium in 2020, its first full year of operation. It has also raised an additional $1.5 billion of committed capital from new and existing investors, giving it a total of $3.2 billion in committed capital.
As its underwriting portfolio continues to grow and diversify in the UK and Bermuda it could benefit from an improved business profile assessment, AM Best noted.
“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,” the rating agency said.
“Convex faces strong competition from well-established peers in its target markets and is highly reliant on brokers to access business,” it added. “Nonetheless, the likelihood of successful execution of the business plan is enhanced by the strong track record of senior management and underwriters that have extensive experience in the re/insurance industry and the group’s demonstrated market acceptance to date.”
Convex, AM Best