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American International Group (AIG) and Onex Corporation have unveiled a $7 billion transaction to acquire specialty (re)insurer Convex Group, one of the largest insurance deals of 2025. Under the agreement, Onex will own ~63% and AIG ~35%, with the balance retained by Convex management – a structure designed to preserve the company’s independent operating model while deepening strategic ties with both buyers.
Highlights
- $7B equity valuation & ownership mix: Onex 63%, AIG 35%, management retains the rest – positioning Convex for long‑term independence.
- Strategic side‑deal: AIG will acquire a 9.9% stake in Onex (~$646M) and commit $2B to Onex private‑equity and credit funds over three years, with investments expected to be earnings‑accretive in year one post‑close.
- Premium valuation: Deal implies ~1.9× Q3‑2025 tangible book for Convex, reflecting outperformance and growth expectations.
- Rapid scale: Convex projects up to $6B gross premiums in 2025 with ~25% CAGR over the last three years and ~18% average ROE since 2022.
- Closing window: Expected H1 2026, subject to regulatory approvals.
- Market reaction: Onex shares jumped on the news amid expectations of higher fee‑related earnings.
- Advisers: Morgan Stanley (AIG), Goldman Sachs (Onex), Evercore (Convex).
What AIG and Onex Are Buying, and Why?
Convex is a 2019 de‑novo specialty (re)insurer founded by Stephen Catlin and Paul Brand. From Bermuda and London hubs (with Luxembourg and New Jersey operations), it writes complex specialty risks, earning ‘A’ financial strength ratings from A.M. Best and S&P. The premium multiple (1.9× tangible book) suggests buyers are underwriting continued growth and disciplined underwriting profitability rather than cost synergies.
For AIG, the move adds a complementary specialty portfolio while maintaining flexibility. Alongside the Convex stake, AIG will subscribe for 9.9% of Onex and allocate $2B to Onex funds – a capital‑light path to fee income and access to specialized deal flow.
For Onex, Convex becomes a core asset (expected to represent ~42% of investing capital post‑deal) while the AIG partnership accelerates fee‑related earnings and strengthens its insurance ecosystem footprint.
How the Capital Flows
- Into Convex: AIG invests ~$2.1B for 35%, Onex ~$3.8B for 63%; management retains the balance.
- Into Onex: AIG buys 9.9% of Onex for ~$646M and commits $2B across Onex funds over three years.
- Onex funding mix: Balance sheet cash and pending asset sales, $1.0B secured debt on existing assets, and proceeds from AIG’s equity subscription.
What Changes for Convex (and What Doesn’t)
Management retains a significant stake and the business remains independent, with AIG planning to participate in a whole‑account quota‑share of Convex’s underwriting from January 1, 2026, aligning economics without forcing integration. Post‑close, expect continued emphasis on specialty growth in Bermuda/London markets and potential expansion via Onex‑backed capital support.
Industry Context: Specialty Is the Profit Pool
The transaction extends 2025’s uptick in insurance M&A, where carriers and allocators pursue growth in higher‑margin specialty lines and fee‑bearing assets. For AIG, the deal follows the recent purchase of Everest Group renewal rights on key retail portfolios – a sign of an active repositioning under CEO Peter Zaffino . For Onex, the partnership secures sticky, long‑duration flows and strengthens its insurance investing franchise.
Key Risks and Milestones
- Regulatory approvals: Multi‑jurisdictional reviews in Bermuda, the UK, Luxembourg, and the U.S.
- Underwriting cycle: Specialty pricing adequacy and catastrophe volatility will test return assumptions.
- Execution watch‑outs: Timely close in H1 2026; seamless launch of the AIG quota‑share; realization of fee‑income uplift at Onex.
