According to Fortune, AIG is making a $5 billion investment in specialty insurer Convex Group and asset manager Onex Corporation, with the deal expected to close in the first half of 2026. The multi-stage transaction includes an initial $2.2 billion commitment for a 35% stake in Convex and approximately $640 million for a 9.9% stake in Onex, followed by an additional $2 billion deployment into Onex’s investment funds over three years. The move reflects CEO Peter Zaffino’s strategy to reposition AIG as a more dynamic institution, coming just days after the company announced a separate $2 billion deal with reinsurer Everest Group. Convex has demonstrated impressive metrics with a combined ratio of 87.6% and return on equity of 17%, significantly outperforming industry averages. This strategic pivot represents a fundamental rethinking of AIG’s approach to insurance and investment.
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The Allure of Specialty Insurance
The appeal of Convex lies in its positioning within the specialty insurance market, which represents a departure from AIG’s traditional mass-market approach. Specialty insurers focus on complex, non-standard risks that require sophisticated underwriting expertise but offer significantly higher margins. Convex’s 87.6% combined ratio—nine percentage points better than the overall U.S. property and casualty industry—demonstrates the profitability potential of this niche. Unlike standard insurance products that have become commoditized, specialty lines maintain pricing power and barriers to entry that protect margins. AIG’s move suggests recognition that future growth in insurance won’t come from competing on price in saturated markets, but from developing expertise in complex risk categories where fewer players can compete effectively.
Zaffino’s Multi-Year Transformation
This deal represents the culmination of Peter Zaffino’s five-year campaign to remake AIG following its near-collapse during the 2008 financial crisis. The company’s journey from hemorrhaging $30 billion in underwriting losses between 2008-2018 to reporting a $1.1 billion profit in Q2 2025 reflects one of the most dramatic turnarounds in financial services history. Zaffino’s strategy has consistently involved shedding non-core operations—including the divestiture of Corebridge Financial—while reducing AIG’s risk exposure by over $1 trillion. The Convex investment represents a shift from defensive restructuring to offensive growth, signaling confidence that the foundational work of stabilizing the company has been completed. As detailed in recent interviews, Zaffino has been methodically building toward this type of strategic move.
The Deal’s Structural Ingenuity
What makes this transaction particularly sophisticated is its multi-layered approach to value creation. The “whole-account quota share reinsurance agreement” provides AIG with immediate access to Convex’s underwriting profits while the equity stakes offer long-term appreciation potential. Meanwhile, the $2 billion commitment to Onex’s investment funds creates a virtuous cycle—AIG benefits from Onex’s asset management expertise while providing the firm with additional capital to deploy. This structure effectively gives AIG three separate avenues for returns: direct underwriting profits, equity appreciation, and investment fund performance. The timing is also strategic, as Convex’s financial statements show the company has reached critical mass with $3.67 billion in shareholder equity, making it large enough to move the needle for AIG but still early enough in its growth trajectory to offer substantial upside.
Implications for the Insurance Industry
AIG’s move signals a broader industry trend toward specialization and partnership models in insurance. Traditional insurers face mounting pressure from insurtech startups, climate-related losses, and compressed margins in standard lines. The Convex investment demonstrates that scale alone is no longer sufficient—expertise in specific risk categories and efficient operations are becoming the key differentiators. This could trigger similar moves by other major insurers seeking exposure to high-performing specialty segments without the time and risk of building capabilities organically. The deal also highlights the growing convergence between insurance and asset management, as evidenced by AIG’s simultaneous investment in Onex Corporation. This blurring of traditional financial services boundaries may become increasingly common as companies seek diversified revenue streams.
The Challenges Ahead
Despite the strategic logic, this ambitious deal carries significant execution risks. Integrating cultures between a 100-year-old insurance giant and a nimble specialty insurer founded in 2019 presents substantial challenges. Convex’s impressive return on equity of 17% significantly outperforms traditional insurers, but maintaining that performance at scale under partial AIG ownership remains uncertain. The regulatory approval process through 2026 creates timeline uncertainty, and market conditions could shift substantially before closing. Additionally, AIG’s simultaneous pursuit of multiple major transactions—including the Everest Group deal—tests the organization’s capacity for successful integration. The success of this strategy will ultimately depend on whether AIG can leverage Convex’s expertise without stifling the entrepreneurial culture that drove its outstanding performance metrics documented in AM Best ratings reports.
