AIG’s Strategic Minority Stakes in Convex Group and Onex Corporation
American International Group (AIG) has finalized its acquisition of significant minority stakes in both Convex Group and Onex Corporation. This strategic move aligns AIG’s balance sheet investments with a new reinsurance agreement involving Convex's specialty re/insurance portfolio, showcasing their commitment to robust regulatory compliance requirements and industry-leading risk management.
AIG invested approximately $2.1 billion to secure a 35% equity interest in Convex and around $642 million for a 9.9% stake in Onex. With the conclusion of these transactions, Onex emerges as the primary shareholder of Convex, securing a commanding 63% interest. This investment strategy by AIG reflects its aim to optimize underwriting profits and expand its footprint in the global insurance industry.
Strategic Investments and Long-Term Goals
Peter Zaffino, AIG’s Chairman and CEO, emphasized that these investments will bolster long-term earnings and enhance capital efficiency. He stated, "We could not be more pleased to announce the completion of our minority ownership stakes in Convex and Onex and are confident that these long-term investments will continue to strategically position AIG for growth in the future and will be accretive to AIG’s earnings and return on equity in 2026 and in future years."
In addition to these equity investments, AIG has initiated participation in a whole-account quota share of Convex's business, effective January 1. This move allows AIG to leverage its capital by accessing diversified specialty risk while increasing its reinsurance cessions in 2027 and 2028. Such a structure is optimal for managing underwriting risks and capital liquidity efficiently. Furthermore, AIG's 9.9% stake bolsters its connection with Onex's asset management capabilities, enhancing its regulatory and compliance capabilities.
Enhanced Return and Market Position
These strategic moves enable AIG to expand its involvement in the specialty re/insurance landscape and efficiently manage claims and risk through alternative assets without pursuing complete acquisition strategies. The related quota share arrangement with Convex supports AIG in acquiring additional specialty risk efficiently while managing catastrophe and tail risk within agreed parameters.
AIG anticipates that the integration of equity investments and reinsurance flows will enhance its return on equity from 2026 onwards. This introduction of specialty-focused revenue streams complements its existing commercial and personal lines offerings. The minority stake in Onex further strengthens AIG’s engagement with third-party capital and private markets, reflecting a strategic tilt towards asset management alliances and regulatory compliance requirements.
This development underscores broader industry trends where major insurers increasingly leverage minority stakes, quota shares, and capital-efficient structures. The transaction illustrates the converging interests of insurers, reinsurers, and alternative capital providers. Morgan Stanley & Co. LLC facilitated the transaction as the financial adviser to AIG, with legal counsel provided by Wachtell, Lipton, Rosen & Katz and Debevoise & Plimpton LLP.