Convex Group given A- financial strength ratings from S&P

Operating entities of the Convex Group, which was formed by former Catlin Group Ltd. executives, have received “A-’’ financial strength ratings from Standard & Poor’s Global Ratings Inc., the rating agency said Wednesday.

Catlin founder Stephen Catlin and Paul Brand, previously Catlin’s chief underwriting officer, said in April that, backed by Canadian private equity firm Onex Corp., they had set up London- and Bermuda-based insurer and reinsurer Convex with $1.8 billion of capital.

S&P said in its statement that most of Convex Group’s management team were longtime executives at Catlin Group “and have significant experience.” Catlin was acquired by XL Group Ltd. in 2015 and the XL Group was acquired by Axa SA in 2018.

“We do not treat Convex as a start-up under our criteria,” said S&P in its statement. “It is, in our view, a ‘greenfield’ insurer that benefits from Catlin Group’s reputation and the shared management experience at Catlin.

The statement said while Convex has strong capital adequacy, it “is still relatively small and has limited diversification. It is likely to be exposed to catastrophe risk through the mix of business it writes and to execution risk through its ambitious business plan.”