Conduit Holdings reports full-year financial results

How did its reinsurance business perform in the past 12 months?

Conduit Holdings reports full-year financial results


By Kenneth Araullo

CHL, the holding company for Bermuda-based reinsurer Conduit Re, has disclosed its preliminary financial outcomes for the fiscal year ending on December 31, 2023.

In 2023, Conduit Re reported income of $190.8 million, marking a 22.0% return on equity. The year also saw a change in its combined ratio, dropping to 72.1% from the previous year’s 103.0%. The company’s gross premiums written surged to $931.4 million, up 49.6% from 2022.

The risk-adjusted rate change of the overall portfolio, net of claims inflation, was reported at 16% for the year. Operational efficiencies were evidenced by a total reinsurance and other operating expense ratio of 13.9%, down from 14.6% in the prior year.

Conduit Re also maintained a high-quality investment portfolio, it stated, with an average credit quality of ‘AA’ and yields of 3.7% for books and 5.1% for the market.

The firm’s total net investment return stood at $70.6 million for the year, a rebound from a net investment loss of $52.8 million in 2022, including a net unrealized gain of $30.6 million. Conduit Re declared a final dividend of $0.18 per common share, maintaining its dividend policy with a total 2023 dividend of $0.36 per common share.

As of December 31, 2023, Conduit Re’s Bermuda solvency capital ratio coverage was estimated at 381%, a slight decrease from 404% in 2022.

Where does Conduit Re go next?

Looking ahead, Conduit Re’s disciplined underwriting approach is expected to facilitate continued growth into the 2024 renewal season, with estimated ultimate premiums written of $582.4 million, a 38% increase from the previous renewal season. The portfolio’s year-on-year risk-adjusted rate change, net of claims inflation, saw a 3% increase at the start of 2024.

The company highlighted its strong renewal business with key partners, enhanced by high-quality new business acquisitions. There is a strategic shift towards property and specialty lines, identified for their attractive underwriting opportunities, while maintaining a selective stance on casualty lines to ensure a stable combined ratio.

The successful placement of its outwards retrocession program and the issuance of a $100 million three-year catastrophe bond in June 2023 were noted as strategic achievements.

“2023 was an outstanding year for Conduit Re,” CEO Trevor Carvey said. “Across all three divisions, the underwriting teams navigated the market well, being focused in choosing their preferred spaces to play and allocating our capacity to those where we saw the best opportunities and returns. Entering our fourth year, we continue to deliver on our plans and the market landscape out there is offering up plenty of good opportunities for continued growth.”

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