LONDON--(BUSINESS WIRE)--AM Best has affirmed the Financial Strength Rating of A- (Excellent) and the Long-Term Issuer Credit Rating of “a-” of Convex Insurance UK Limited (Convex UK) (United Kingdom) and Convex Re Limited (Convex Re) (Bermuda). Both entities are wholly owned subsidiaries of Convex Group Limited (Convex) (Bermuda), the non-operating holding company of the Convex group. The outlooks of these Credit Ratings (ratings) are stable.
The ratings reflect Convex’s consolidated balance sheet strength, which AM Best categorises as very strong, as well as the group’s adequate operating performance, limited business profile and appropriate enterprise risk management, and factor in the strategic importance of Convex UK and Convex Re to the Convex group. Convex UK is the group’s U.K.-based specialty (re)insurer. Convex Re is the group’s Bermuda-based reinsurer. In addition to writing third-party reinsurance, it provides reinsurance protection to Convex UK.
Convex is expected to maintain the strongest level of consolidated risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), through a forecast period of five years, taking into account AM Best’s additional capital requirements for new company formations. An offsetting factor in the balance sheet strength assessment is the group’s material exposure to catastrophe risk and the dependence on reinsurance to manage this risk.
The adequate operating performance assessment considers the group’s five-year business plan, taking into account its competitive environment and heightened execution risk during the startup phase. Convex faces strong competition from well-established peers in its target markets and is highly reliant on brokers to access business. The group has senior management and underwriting teams in place that have extensive experience in the targeted classes of business. In AM Best’s view, this increases the likelihood of market acceptance and successful execution of the group’s business plan.
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