Credit rating analysts have highlighted the underwriting prowess demonstrated over the years by the international specialty insurer and reinsurer Convex Group Ltd.

AM Best was affirming the credit ratings of the group’s subsidiaries when it said: “Convex has demonstrated consistently improving underwriting results since its inception in 2019.

“In 2024, the group generated an 87 per cent consolidated combined ratio [as calculated by AM Best], which represented the third consecutive year of sub-100 per cent combined ratios.

“Overall, earnings in 2024 benefited from improved investment income yields and robust underwriting performance despite being a relatively active catastrophe year.

“AM Best expects the group to manage performance over the underwriting cycle, supported by increasing scale and growing diversification of its underwriting portfolio, albeit subject to potential volatility given the elevated exposure to catastrophe risk.”

The rating agency noted that Convex established itself quickly as an internationally recognised [insurance and] reinsurance group, with operations spanning across Britain, Bermuda, Luxembourg and Guernsey, as well as a managing general underwriter in the United States.

The group’s gross written premium exceeded $5 billion in 2024 and is expected to continue to expand over the medium term.

AM Best has affirmed the financial strength rating of A (Excellent) and the long-term issuer credit ratings of “a” (Excellent) of Convex Re Ltd (Bermuda), Convex Insurance UK Ltd, Convex Europe SA and Convex Guernsey Ltd.

All four entities are wholly owned subsidiaries of Convex Group Ltd (Bermuda), the non-operating holding company of the group. The agency said the outlook of these credit ratings is stable.

It said: “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 balance sheet strength assessment is underpinned by its consolidated risk-adjusted capitalisation assessed at the strongest level, as measured by Best’s Capital Adequacy Ratio.

“The group’s balance sheet strength is supported further by good financial flexibility, evidenced by an equity capital raise of $1 billion in 2020 and the issuance of perpetual preference shares of $500 million that were drawn down fully in 2023.

“An offsetting rating factor is Convex’s material exposure to catastrophe risk and its dependence on reinsurance to manage this, although this risk is mitigated partially by a reinsurance panel of excellent credit quality.”