AM Best Affirms Credit Ratings of Convex Group Limited’s Subsidiaries

AM Best has affirmed the Financial Strength Rating of A (Excellent) and the Long-Term Issuer Credit Ratings of “a” (Excellent) of Convex Re Limited (CRL) (Bermuda), Convex Insurance UK Limited (CIL) (United Kingdom), Convex Europe S.A. (CES) (Luxembourg) and Convex Guernsey Limited (CGU) (Guernsey). All four entities are wholly owned subsidiaries of Convex Group Limited (Convex) (Bermuda), the non-operating holding company of the group. The outlook of these Credit Ratings (ratings) is stable.

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

Convex’s consolidated risk-adjusted capitalisation was comfortably at the strongest level at year-end 2023, as measured by Best’s Capital Adequacy Ratio (BCAR). The group’s balance sheet strength is supported by good financial flexibility, notably demonstrated in the fourth quarter of 2020 by an equity capital raise of USD 1.0 billion and the issuance of perpetual preference shares of USD 500 million, which were fully drawn down in 2023. An offsetting rating factor is Convex’s material exposure to catastrophe risk and its dependence on reinsurance to manage this risk; however, this is mitigated partially by a reinsurance panel of excellent credit quality.

Convex has demonstrated consistently improving underwriting results since its inception in 2019, with 2023 representing the group’s most profitable year to date, evidenced by an 89% combined ratio (as calculated by AM Best). Results in 2023 benefited from a relatively benign catastrophe year, as well as the gradual unwind of mark-to-market losses on the group’s fixed-income portfolio. Prospectively, profitability is expected to continue to improve as Convex’s book of business gains more scale and further diversification, supported by a favourable rate environment.

Convex has quickly established a strong franchise as an internationally recognised (re)insurance group, with operations spanning across the UK, Bermuda, Luxembourg, and Guernsey, as well as a managing general underwriter in the United States. The group’s gross written premium exceeded USD 4 billion in 2023 and is expected to continue to expand rapidly over the medium term.

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 pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit

Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

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

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