Core Insights - Diamond Hill Capital's "Select Fund" underperformed the Russell 3000 Index in Q3 2025, returning 4.98% compared to the index's 8% gain [1] - The fund highlighted American International Group, Inc. (AIG) as a significant stock, which has seen a one-month return of -2.08% and a 52-week gain of 2.98% [2] - AIG's stock closed at $77.98 on October 29, 2025, with a market capitalization of $43.201 billion [2] Company Performance - AIG was among the bottom contributors to the fund's performance in Q3 2025, affected by broader industry challenges [3] - The company has experienced a decline in pricing benefits that have previously supported property and casualty insurers, impacting its recent performance [3] Hedge Fund Interest - AIG is not among the top 30 most popular stocks among hedge funds, although it saw an increase in hedge fund holdings from 49 to 52 in the second quarter [4] - Despite acknowledging AIG's potential, the analysis suggests that certain AI stocks may offer better upside potential with less downside risk [4]

Financial Performance - Adjusted operating income increased by 13% year-over-year, driven by a diversified business mix[7, 14] - Life Insurance operating income reached $54 million, benefiting from stable mortality and higher investment income[7, 14] - The leverage ratio improved by 320 basis points year-over-year to 252%, primarily due to equity growth[7, 14] Sales and Account Balances - Annuities total sales increased by 32% year-over-year to $45 billion[14, 21] - Retirement Plan Services achieved first-year sales of $24 billion, up almost 50% year-over-year[14, 30] - Group Protection sales increased by 38% year-over-year, diversified across segments and products[14, 27] - Annuities account balances grew 5% year-over-year, reaching a record $174 billion[7, 26] Capital and Risk Management - The estimated RBC ratio is greater than 420%, exceeding the 20 percentage point capital buffer above the 400% target[14] - The investment portfolio is well-diversified, with 97% of assets rated as investment grade[55, 58, 62] - New money yield achieved 59%, approximately 130 basis points above the portfolio yield[55]

Core Insights - Onex Partners announced an agreement to sell Convex Group Limited to Onex Corporation and American International Group for $7 billion [1] Company Overview - Convex was founded in 2019 as a de novo insurer in partnership with Onex Partners V and several independent investment partners [2] - Since its inception, Convex has grown into a significant specialty property and casualty (re)insurer, with gross premiums written expected to reach $6 billion in 2025, reflecting a 25% compound annual growth rate over the last three years and an 18% average return on equity during the same period [3] Transaction Details - The sale of Convex is part of Onex Partners' history of investing in the property and casualty insurance value chain, particularly in founder-led businesses [4] - This transaction, along with previous partial sales of WestJet and OneDigital, contributes to Onex Partners' record of returning capital to investors at targeted values [5] - The transaction is expected to close in the first half of 2026, pending customary closing conditions [5] Legal and Advisory - Kirkland & Ellis provided legal advice to Onex Partners, while UBS Investment Bank acted as a financial advisor for certain other investors in Convex [6]

AIG struck a deal to buy a stake in specialty insurer Convex and alternative-asset manager Onex in deals that total more than $2.7 billion https://t.co/Z0QZG3Ypm6 ...

Core Viewpoint - Convex Group Limited has established a new long-term ownership structure with Onex Corporation acquiring a 63% stake and AIG becoming a strategic minority investor with a 35% equity interest [1][2]. Ownership Structure - Onex Corporation will hold a leading 63% stake in Convex, while AIG will have a 35% equity interest as a strategic minority investor [1][2]. - Founding equity investors, excluding management, will sell their stakes, valuing Convex's common equity at $7 billion [2]. Strategic Investments - AIG will write a whole account quota share of Convex's business starting January 1, 2026, and will invest $2 billion over three years in Onex's diversified investment funds [2][3]. - AIG will acquire a 9.9% ownership stake in Onex Corporation for approximately $646 million [2]. Business Performance - Convex has achieved annual premium income of up to $6 billion and operates in various global jurisdictions, establishing itself as a major player in specialty insurance and reinsurance [4]. - The leadership and underwriting capabilities of Convex have been endorsed through this new relationship [3][5]. Management and Future Outlook - Both Onex and AIG will have representation on the Convex board, but Convex will maintain its independent strategy and underwriting approach [3]. - The transaction is expected to secure the long-term independence of Convex and present strategic opportunities for growth [5][6]. - AIG's investment reflects confidence in Convex's ability to deliver strong returns and sustained revenue growth [10][12].

Core Insights - Insurer AIG is set to acquire a 35% stake in privately held specialty insurer Convex Group for nearly $2.1 billion [1] Company Summary - AIG is making a significant investment in Convex Group, indicating a strategic move to enhance its portfolio in the specialty insurance market [1] - The acquisition reflects AIG's commitment to expanding its presence in the insurance sector through partnerships with specialized firms [1] Industry Summary - The transaction highlights ongoing consolidation trends within the insurance industry, as larger firms seek to diversify their offerings and tap into niche markets [1] - The investment in Convex Group may signal increased competition in the specialty insurance space, as companies look to innovate and meet evolving customer needs [1]

Group 1 - American International Group, Inc. (AIG) announced strategic investments in Convex Group Limited and Onex Corporation, acquiring minority stakes in both companies [1] - Convex Group, founded in 2019, is a privately held global specialty insurer, while Onex Corporation is a global asset manager [1] - The investments will allow AIG to participate in Convex's growth and invest in Onex's high-performing investment funds [1]

Core Insights - Onex Corporation announced a transformational investment and strategic relationship with AIG to enhance growth and enterprise value creation [1][5] - The acquisition of Convex, a leading specialty property and casualty (re)insurer, is valued at $7 billion, with Onex acquiring a 63% stake and AIG holding 35% [2][5] - AIG will also invest approximately $0.6 billion for a 9.9% interest in Onex' subordinate voting shares and commit $2 billion to Onex-managed strategies over three years [4][5] Transaction Overview - Onex and AIG will jointly acquire Convex, with Onex owning approximately 63% and AIG 35% post-acquisition [2][5] - The acquisition values Convex at a $7 billion equity valuation, which is 1.9 times its Q3 2025 tangible book value [2] Company Background - Convex was founded in 2019 and has rapidly grown into a significant player in the specialty property and casualty insurance market, with expected gross premium written of up to $6 billion in 2025 [3][6] - The management team of Convex will retain a significant economic interest, ensuring alignment with Onex and AIG [3] Financial Considerations - Onex will finance the acquisition through a combination of cash, debt financing, and proceeds from AIG's subscription, totaling approximately $3.8 billion for the 63% stake in Convex [9] - The transaction is expected to close in the first half of 2026, subject to regulatory approvals [10] Strategic Implications - The partnership with AIG is expected to enhance Onex' fee-related earnings and provide preferred access to AIG's investment funds [5][8] - Following the acquisition, Convex is projected to account for 42% of Onex' investing capital, contributing significantly to future shareholder value creation [10]

Financial Data and Key Metrics Changes - The company's insurance revenue reached ¥216 billion, reflecting a year-on-year increase of 3.6% [1] - Net profit rose to ¥45.7 billion, up 19.3% year-on-year, while OPAT stood at ¥28.4 billion, an increase of 7.4% [2][6] - Investment assets approached ¥3 trillion, marking an 8.8% year-on-year growth, with an annualized net investment yield of 2.6%, down 0.3 percentage points [6] Business Line Data and Key Metrics Changes - CPIC Life's total premium income was ¥263.8 billion, up 14.2%, with new business value increasing by 31.2% to ¥15.3 billion [2] - The agency channel's premium income was ¥184.3 billion, a 2.9% increase, while the bank channel delivered ¥58.3 billion in gross written premiums, up 63.3% [3][4] - CPIC P&C recorded gross written premiums of ¥160.2 billion, a slight increase of 0.1%, with auto insurance premiums at ¥80.46 billion, up 2.9% [5] Market Data and Key Metrics Changes - The share of mid to high-end customers in the agency channel grew by 4.8% year-on-year [3] - The bank channel's regular premium new business reached ¥15.9 billion, up 43.6% year-on-year [4] - The combined ratio for CPIC P&C was 97.6%, down 1 percentage point year-on-year [5] Company Strategy and Development Direction - The company aims to enhance its capabilities to create value and focus on five financial priorities in China's financial market [6] - CPIC Life plans to diversify its product offerings, including unit-linked products for high net worth customers [10] - The bank channel will continue to focus on wealth management and health and retirement needs, empowered by digitization [3][4] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive growth in regular premium business, projecting a growth rate of 5% to 10% for 2026 [9] - The company anticipates that the health insurance segment will see significant growth due to strong customer demand and supportive government policies [22] - The investment strategy will remain cautious, focusing on high-dividend stocks and innovative fixed income assets to enhance yields [14][19] Other Important Information - The agency channel's total headcount remained stable at 181,000 agents, with a monthly average first-year premium per agent of ¥71,000, up 16.6% year-on-year [3] - The company issued ¥15 billion in convertible bonds to support capital needs and maintain a strong solvency ratio [31] Q&A Session Summary Question: Outlook for liability side and agency channel performance - Management expects regular premium business to grow by 5% to 10% next year, with agency new business value also projected to grow positively [9][10] Question: Investment strategy and future yield outlook - The company plans to maintain a balanced strategy between TPL and OCI, focusing on high-quality growth and prudent investment in equities [19][20] Question: Growth in health insurance products - The company will enhance its health insurance offerings, driven by government support and customer demand, with a focus on critical illness and long-term care products [22][23] Question: Combined ratio breakdown and challenges - The combined ratio was impacted by new energy vehicle uncertainties and credit guarantee business, with expectations for improvement in the overall year [25] Question: Agency headcount and productivity - The agency channel's headcount is expected to stabilize, with productivity improvements noted among core agents [26][27] Question: Bond investment strategy and duration management - The company is extending its allocation into long-term bonds and exploring innovative fixed income assets to manage duration risks effectively [36][37]

Investment Overview - AIG is investing nearly $5 billion in specialty insurer Convex Group and asset manager Onex Corporation, aiming to transform into a more agile, capital-aligned institution under CEO Peter Zaffino's leadership [1][2] - The deal includes an initial $3 billion commitment followed by an additional $2 billion investment over the next three years, with regulatory review expected to conclude in the first half of 2026 [1][2] Deal Structure - The terms of the Convex deal involve a $2.2 billion commitment for a 35% stake in Convex Group, alongside a $640 million investment for a 9.9% stake in Onex, Convex's majority shareholder [2] - Post-transactions, Onex will own 63% of Convex, while AIG will hold minority interests in both Convex and Onex [2] Company Performance - Convex, established in 2019, has rapidly grown to over $5 billion in premiums, with a combined ratio of 87.6%, outperforming the U.S. property and casualty industry by nine percentage points [3] - Convex's return on equity (ROE) stands at 17%, placing it in the top quartile of global reinsurers, with shareholder equity increasing to $3.67 billion, a 16% year-over-year rise from $1.76 billion in 2022 [3] Additional Agreements - AIG is negotiating a "whole-account quota share reinsurance agreement" with Convex, which will provide AIG with a share of Convex's underwriting profits [4] - Over the next three years, AIG plans to invest $2 billion into Onex's investment funds, gaining preferred access to high-return platforms [4]