AM Best has revised its outlooks on Conduit Reinsurance (Conduit Re) to stable from positive while affirming the company’s Financial Strength Rating of A- (Excellent) and Long-Term Issuer Credit Rating of “a-” (Excellent).
The ratings continue to reflect what AM Best describes as very strong balance sheet strength, adequate operating performance, a limited business profile and appropriate enterprise risk management.
The move to a stable outlook indicates the agency’s expectation that these fundamentals will remain in line with the current rating level over the near to medium term as Conduit Re operates under a refreshed senior management team.
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The assessment also factors in capital without financial leverage, a conservative investment portfolio focused on fixed-maturity securities and a reinsurance program placed with counterparties of high credit quality.
The operating performance assessment is driven by AM Best’s expectation of robust underwriting profitability over the coming years. That view is supported by pricing the agency considers adequate and by low expense ratios, although 2025 profitability has been affected by outsized net exposure to the California wildfires.
In its first-quarter update, Conduit estimated an ultimate net loss of between US$100 million and US$140 million from the California wildfires, net of reinsurance and reinstatement premiums, and outlined additional reinsurance cover for US and global secondary perils, higher aggregate protection, and a share buyback program of up to US$50 million, alongside guidance for a full-year return on equity in the high single-digit to low double-digit range.
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AM Best noted that Conduit Re has adjusted its retrocession strategy during 2025 to improve protection against secondary peril events. Conduit Holdings reported a loss of US$13.5 million for the first six months of 2025, compared with a profit of US$98.1 million in the same period of 2024, reflecting the impact of catastrophe activity on group earnings.
More recent trading figures show how those dynamics are feeding through the topline. In an update for the nine months to Sept. 30, 2025, Conduit Holdings reported that Conduit Re grew premiums by 8.5% as it recovered from significant natural catastrophe and risk losses earlier in the year.
Conduit Re, which began underwriting in 2021, has built relationships with key distributors and writes a diversified portfolio by line of business and geography. AM Best said it expects the company to generate about US$900 million in reinsurance revenue in 2025.
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