Some financials from Conduit Re;
CHL, the parent company of Conduit Re, a pure-play global reinsurance business based in Bermuda, has issued a trading update in relation to the key 1 January 2023 renewal season where it has seen a strong start to the year.
Trevor Carvey, Chief Executive Officer, said:
“This has been an exceptional renewal season. 60% premium growth is the true indication of the underwriting conditions we have experienced. This is manifesting itself across pricing and rates, terms and deductibles, and the strong increase in new business that we have enjoyed. From a capital perspective, we have plenty of room to execute our plan and the growth we anticipate.“
Key highlights of 1 January renewals:
• Estimated ultimate premiums written of $421.4 million:
• Increase of circa 60% on 2022 ($262.6 million)
• Extremely strong Property and Specialty market conditions provided the opportunity to grow those classes more
• Continued selective growth in Casualty lines which continue to provide attractive underwriting opportunities
• Business continues to trend towards a mid-80’s combined ratio in the medium term, further supported by:
• Significantly enhanced terms and conditions
• Reduced acquisition costs on renewed business
• Exceptional pricing environment
• 19% risk-adjusted rate change net of inflation across the portfolio, comprising:
• 39% risk-adjusted rate change on Property
• 1% risk-adjusted rate change on Casualty
• 14% risk-adjusted rate change on Specialty
• Conduit Re continues to have a strong, legacy-free balance sheet and is well placed to continue to grow in the current market conditions.
Gregory Roberts, Chief Underwriting Officer, commented:
“We experienced a busy and rewarding start to the year. In the 1 January renewals we increased our weighting towards Property and Specialty business, capitalising on an exceptional shift in pricing, while balancing it against our Casualty book, which is still attractively priced. A highlight was that we successfully secured our retrocession programme in line with our objectives. As a team, we are absolutely delighted in the way that we executed the renewals period and feel that we have developed a reputation as being a responsive, reliable and disciplined counterparty. We expect market conditions to continue to offer opportunities for further growth as the year develops.“
The significant movement in pricing and terms and conditions is evidence of a structural shift in the market-place caused by a fundamental re-pricing of risk and an imbalance in the supply and demand of capital. We see this as an enduring environment creating the opportunity for improved margins in our business across the rest of 2023 and beyond.
We will announce our 2022 year-end financial results on 22 February 2023.