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Conduit Re upbeat on January renewals performance

(Sharecast News) - Bermuda-based reinsurer Conduit Re reported 38% growth in estimated ultimate premiums written in an update on Thursday, which now stood at $582.4m, compared to $421.2m during the January 2023 renewals season. The company attributed the increase to strong renewing business relationships with key partners, as well as the addition of high-quality new business opportunities.

Notably, the company identified attractive underwriting prospects in the property and specialty segments, leading to a shift in focus towards those areas while maintaining a selective approach to casualty lines.

Conduit Re said it experienced a further hardening of its portfolio rate, with a 3% risk-adjusted rate change, net of inflation.

It said the successful securing of the outwards retrocession programme had ensured no significant alterations in net probable maximum losses as at 1 January.

The breakdown of estimated ultimate premiums written by class of business at the start of 2024 showed property rising 58% to $311m, or a 54% share.

Casualty decreased 10% to $101.4m for a 17% share, and specialty grew 29% to $170m for a 29% share.

As a result, total pricing was up 38% year-on-year at $482.4m.

Conduit Re's year-on-year renewal business written at the start of 2024 reflected an overall risk-adjusted rate change of 3%, considering the net effects of inflation, with property at 5%, compared to 39% in January 2023.

Casualty was at -2%, compared to 1% a year earlier, while specialty was at 2%, compared to 14% at the start of 2023.

That made for a weighted average of 3%, compared to 19% year-on-year.

Looking ahead, Conduit said the January renewals demonstrated the company's ability to thrive in a challenging environment, with ongoing risk-adjusted rate improvements in an already hard market.

With a well-capitalised position, Conduit anticipated continued year-on-year growth.

"We are pleased to report a very strong January renewal season with estimated ultimate premiums written up 38% year-on-year," said chief executive officer Trevor Carvey.

"The quality and structure of the business being written is exactly where I want it to be, and our business platform is readily supporting our continued growth.

"We look forward to capitalising on the high quality growth opportunities in this market with much optimism."

Gregory Roberts, Conduit's chief underwriting officer, added that the 2024 renewals season was again characterised by a high level of renewing business and positive rates in its property and specialty books.

"We continue to see high submission levels of attractive business and, being selective around lines, rates and structure, we continue to grow the portfolio significantly without sacrificing quality," Roberts added.

"We saw more attractive risk versus reward in the property and specialty segments and therefore we focused growth in these classes over casualty."

Conduit said it would announce its 2023 year-end financial results on 21 February.

At 1255 GMT, shares in Conduit Holdings were down 0.09% at 465.6p.

Reporting by Josh White for Sharecast.com.

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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