Stephen Catlin launches re/insurance start-up Convex with $1.8bn capital raise; secures A- rating from AM Best
Insurance veteran Stephen Catlin and Paul Brand have launched a new specialty re/insurer focused on complex risks with an initial capital commitment of $1.8 billion, and an "exceptional group" of underwriting experts.
The new private equity-backed venture, called Convex Group, has received an AM Best rating of A- (Excellent) and regulatory approval to operate in London and Bermuda.
It will underwrite insurance and reinsurance for complex specialty risks across a diversified range of business lines.
The invested capital comes from Convex's management team, Onex Partners V, Onex Corporation’s large-cap private equity fund, PSP Investments and a consortium of co-investors.
Catlin, who founded the Catlin Group and is regarded as one of the biggest names in commercial insurance, believes that his latest venture is well equipped to prosper in a challenging market.
“The launch of Convex distils vast industry experience and client focus to create the insurance company of the future. We begin unencumbered by legacy but rich with expertise and the strength of independence," said Catlin. "There is evidence of pricing momentum in many classes and we are well equipped to prosper in a challenging market."
Catlin said the company will have access to further capital as the business expands. It will adopt a conservative investment strategy with a predominantly high-grade fixed income portfolio, and duration matched to the profile of the liabilities.
Convex brings together "an exceptional group of talented underwriters" who will focus on areas where they have a competitive advantage and aim to deliver top quartile, risk adjusted returns.
The company's management team will include Catlin as chairman and chief executive officer (CEO), Brand as deputy CEO, Benjamin Meuli as chief financial officer, Robina Malik as general counsel, Adrian Spieler as chief operating officer, Doug Howat as chief underwriting officer insurance, Matt Paskin as chief underwriting officer reinsurance, and Mark van Zanden as head of portfolio optimisation.
"Paul and I have worked together since the early Catlin days and the team we have assembled all bring exceptional skills to the table," Catlin commented. "Together we have a once in a lifetime opportunity and I look forward to the journey that lies ahead.”
"We are thrilled to have the support of Onex and our co-investors and believe they will be valuable partners to us as we build our business."
Brand added: “Convex is designed for the evolving insurance industry, and combines years of experience, knowledge and history in this market. Stephen and I see a great opportunity; there is demand for an insurer to bring a refreshed and enhanced offering to market, one that puts fairness and honesty at the centre of its singularly client focused proposition.
"Convex will challenge the status quo to create value across the chain and provide a differentiated service in a personal way. We are very excited to be launching Convex today and look forward to working with our team to create an innovative partner that drives results for our clients.”
Bobby Le Blanc, a senior managing director of Onex, said: “We believe Convex is well-positioned to become a leading specialty insurer. It has a well-respected and experienced management team with an exceptional track record in building value. We are delighted to partner with Stephen, Paul and the entire Convex team and look forward to the years ahead.”
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