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FOR IMMEDIATE RELEASE
LONDON - MAY 31, 2023 10:30 AM (EDT)
AM Best has upgraded the Financial Strength Ratings to A (Excellent) from A- (Excellent) and the Long-Term Issuer Credit Ratings to “a” (Excellent) from “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 outlooks of these Credit Ratings (ratings) have been revised to stable from positive.
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.
The rating upgrades reflect Convex’s improved business profile assessment, supported by continued enhancement of its product diversification, scale and profitability. Convex has demonstrated excellent market acceptance since its inception, exceeding USD 3 billion of consolidated gross written premium in 2022, its third full year of operation. Further profitable growth is expected by AM Best over the medium term.
Convex’s risk-adjusted capitalisation was comfortably at the strongest level at year-end 2022, as measured by Best’s Capital Adequacy Ratio (BCAR). Net required capital is expected to increase over the medium term as the group continues to grow its underwriting portfolio. 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; however, this is partially mitigated by a reinsurance panel of excellent credit quality.
Since inception, the group has demonstrated consistently improving underwriting results, with 2022 representing Convex’s first full year of underwriting profitability, evidenced by a 98% combined ratio. AM Best expects Convex’s underwriting performance to improve as its book of business gains further scale and diversification. The likelihood of the group’s successful execution of its business plan is enhanced by the strong record of senior management and underwriters that have extensive experience in the (re)insurance industry.
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.