Inside AIG’s bold specialty insurance play: Why the Convex‑Onex partnership could reshape underwriting and returns

American International Group, Inc. (NYSE: AIG) and Onex Corporation (TSX: ONEX) have announced a transformational USD 7 billion investment partnership that could reshape the trajectory of specialty insurance and alternative asset management. At the heart of the deal is Convex Group Limited, a high-growth global specialty insurer founded in 2019, which will now be jointly owned by Onex (63 percent) and AIG (35 percent). In parallel, AIG will also acquire a 9.9 percent equity stake in Onex for approximately USD 646 million and commit up to USD 2 billion to Onex investment funds over the next three years.

Expected to close in the first half of 2026, the strategic move gives AIG direct exposure to Convex’s high-performing underwriting portfolio, while also expanding its alternative investment footprint through Onex’s private equity and credit strategies. With Convex’s gross premium written expected to reach USD 6 billion in 2025 and an average return on equity of 18 percent over the past three years, the transaction is seen as a deliberate step by both firms to capture long-term earnings and margin growth from both underwriting and capital deployment strategies.

Convex, founded in 2019 by industry veterans Stephen Catlin and Paul Brand, has grown into a leading specialty insurer and reinsurer with an expected gross premium written of up to USD 6 billion in 2025. The deal marks a full-circle moment for Onex, which was an anchor investor in Convex through its Onex Partners V fund at inception and is now scaling up its commitment from a minority LP role to controlling shareholder status.

Why is American International Group doubling down on specialty insurance and alternative assets now?

For American International Group, the decision to invest over USD 2.7 billion across Convex and Onex appears to be a carefully timed shift toward scalable underwriting exposure and yield-enhancing asset management. The insurer is not merely acquiring a passive stake; it will also participate in Convex’s underwriting business via a whole account quota share agreement, giving it a direct share of Convex’s insurance portfolio starting January 1, 2026.

Peter Zaffino, Chairman and Chief Executive Officer of American International Group, described the Convex deal as a “very unique opportunity” to back what he characterized as a high-performing specialty insurer with a leadership team he has personally known and respected for over two decades. Zaffino emphasized that the deal posed “no operational, technical, or integration risks” and would enhance the company’s earnings and return on equity from year one post-closing.

Institutional investors appear to support the rationale. Convex’s complementary risk profile, combined with its strong track record in specialty property and casualty lines, aligns with American International Group’s goal of diversifying revenue streams and enhancing underwriting margins without the burden of fully integrating a new operating entity. Analysts broadly see this as a strategic pivot toward growth through capital partnerships rather than traditional M&A.

What are the terms of the Convex and Onex transactions and how will they be financed?

The Convex deal values the specialty insurer at approximately USD 7 billion in equity, representing a valuation of 1.9 times tangible book value as of Q3 2025. American International Group will pay about USD 2.1 billion for its 35 percent stake, while Onex will acquire 63 percent of the company for approximately USD 3.8 billion. The remaining equity will be retained by Convex’s management team, who will continue to run the company independently.

Onex’s contribution to the transaction includes a rollover of its existing USD 0.7 billion position in Convex and USD 1.5 billion in cash sourced from its balance sheet and planned asset sales. It will fund the remaining capital through USD 1 billion in debt secured on its existing private equity and credit portfolios and a USD 0.6 billion equity subscription from American International Group tied to its 9.9 percent stake in Onex.

For its part, American International Group will also commit an additional USD 2 billion to Onex-managed private equity and credit strategies over the next three years, providing Onex with new fee-generating assets under management. This diversified capital allocation ensures both underwriting and asset management upside while avoiding full consolidation of operations.

How does this structure impact American International Group’s investment strategy and financial flexibility?

The broader structure of the transaction signals a deliberate move by American International Group toward a more capital-efficient model of growth. By acquiring an ownership stake and participating in the underwriting returns of Convex, the insurer adds high-margin premium exposure without acquiring an entire operating entity. Simultaneously, its stake in Onex and capital commitment to investment funds aligns with its internal push to shift toward higher-yielding alternative assets.

This model mirrors a broader industry trend among large global insurers to allocate capital into differentiated specialty underwriters and to tap asset managers for yield-enhancing strategies in a prolonged low-rate environment. The preferred access American International Group gains to Onex’s fund lineup is particularly strategic, as Onex is widely known for targeting sectors such as insurance platforms, healthcare services, and mid-market industrials.

Zaffino’s comments indicated that the insurer views this capital partnership approach as a low-risk, high-yield alternative to direct acquisitions, one that preserves its operational agility while gaining meaningful exposure to both underwriting and asset management growth.

What are the long-term implications for Convex’s independence, performance, and leadership continuity?

Convex Group Limited, led by Executive Chairman Stephen Catlin and Chief Executive Officer Paul Brand, will remain operationally independent under the new ownership structure. Both American International Group and Onex will appoint board members, but the management team will continue to retain significant economic and decision-making authority. This ensures that Convex’s entrepreneurial culture and underwriting strategy remain intact even as it enters a new phase of capital-backed growth.

Stephen Catlin, a well-known figure in global reinsurance markets, noted that the deal “secures the long-term independence of Convex” while offering “a range of exciting strategic opportunities.” Paul Brand added that the Convex team views the transaction as the start of the company’s next chapter and a vote of confidence in their track record and future ambitions.

Convex’s three-year CAGR of 25 percent in gross premium written and an 18 percent average return on equity make it a standout performer in the global specialty market. By keeping leadership continuity and independence intact, Onex and American International Group aim to preserve the very elements that made Convex attractive in the first place.

How are investors interpreting AIG and Onex’s Convex deal as a signal of changing capital flows in the global insurance sector for 2026?

American International Group’s share price was stable in the immediate aftermath of the announcement, with investors broadly welcoming the deal’s accretive potential. The American insurer’s stock remains in a consolidation phase near the USD 78 level, reflecting a wait-and-see posture among institutional investors. Onex Corporation, listed on the Toronto Stock Exchange, saw modest upward pressure as markets priced in the strategic significance of the incoming USD 2 billion asset inflow and the transformation of Convex into a core balance sheet asset.

From a sentiment standpoint, institutional analysts are likely to view the transaction as a positive diversification move for both entities. American International Group gains underwriting upside and portfolio alpha without integration risk, while Onex boosts fee-related earnings and expands its profile in global insurance investing.

Investors should watch for updates on regulatory approvals, the rollout of American International Group’s quota share participation in Convex, and further details on how Onex intends to deploy the USD 2 billion capital commitment over the three-year window. Monitoring Convex’s underwriting profitability and premium growth trajectory under new ownership will also be key to gauging the transaction’s long-term success.

What are the most important takeaways from AIG’s $7 billion Convex–Onex strategic investment?

• American International Group, Inc. will acquire a 35 percent equity stake in specialty insurer Convex Group Limited for approximately USD 2.1 billion and begin underwriting participation via a whole account quota share in 2026.
• Onex Corporation will take majority control of Convex with a 63 percent stake valued at USD 3.8 billion, transitioning from a founding investor to primary owner, while Convex’s management team retains the remaining equity.
• American International Group will also purchase a 9.9 percent ownership stake in Onex Corporation for approximately USD 646 million and commit USD 2 billion to Onex’s private equity and credit strategies over three years.
• The transaction is expected to be accretive to American International Group’s earnings and return on equity in the first year post-closing, with no integration risks due to Convex’s retained independence.
• Convex is projected to write up to USD 6 billion in gross premiums in 2025, reflecting 25 percent compound annual growth and an 18 percent average return on equity over the past three years.
• Institutional sentiment is moderately positive, with analysts viewing the deal as a forward-looking move to align underwriting exposure with alternative investment income.
• The transaction is set to close in the first half of 2026, subject to regulatory approvals, and positions Convex as a core asset within both Onex’s and American International Group’s long-term strategic roadmaps.