AM Best Assigns Credit Ratings to Subsidiaries of Convex Group Limited

LONDON–(BUSINESS WIRE)–AM Best has assigned a Financial Strength Rating of A-
(Excellent) and a Long-Term Issuer Credit Rating of “a-” to Convex Re
Limited (Convex Re) (Bermuda) and Convex Group UK Limited (Convex
UK) (United Kingdom). Both entities are wholly owned subsidiaries of
Convex Group Limited (Convex), the non-operating holding company of the
Convex group. The outlook assigned to these Credit Ratings (ratings) is
stable.

The ratings reflect the strategic importance of Convex UK and Convex Re
to the Convex group, 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. Convex UK will be the group’s U.K.-based
specialty insurer and will be the principal contributor of premium
income. Convex Re is the group’s Bermuda-based reinsurer. In addition to
writing third-party reinsurance, it will provide reinsurance protection
to Convex UK.

Convex is a new entrant in the competitive specialty (re)insurance
sector. The group has been capitalised initially with approximately USD
1.6 billion of common shareholders’ equity, drawn from a USD 1.8 billion
facility provided by a consortium of investors, including funds managed
by Onex Corporation, a private equity investor and manager with a track
record of investing in the insurance industry.

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 planned 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 start-up phase. AM Best expects
Convex to face strong competition from well-established peers in its
target markets and be highly reliant on brokers to access business. The
group has a senior management and underwriting team in place that has
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.

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 Understanding
Best’s Credit Ratings. For information on the proper media
use of Best’s Credit Ratings and AM Best press releases, please view Guide
for Media – Proper Use of Best’s Credit Ratings and AM Best Rating
Action Press Releases.

AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.

Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.

Contacts

Jessica Botelho-Young, CA
Senior Financial Analyst
+44
20 7397 0310
jessica.botelho@ambest.com

Catherine
Thomas, CFA
Senior Director
+44 20 7397 0281
catherine.thomas@ambest.com

Christopher
Sharkey
Manager, Public Relations
+1 908 439
2200, ext. 5159
christopher.sharkey@ambest.com

Jim
Peavy
Director, Public Relations
+1 908 439
2200, ext. 5644
james.peavy@ambest.com