Conduit Re Posts Q3 Trading Update

Some info from Conduit, as they post a trading update;

CHL, the ultimate parent company of Conduit Re, a multi-line Bermuda-based reinsurance business, today presents its trading update for the nine months ended 30 September 2024.

Trevor Carvey, Chief Executive Officer, commented: “Our increase in premiums written of 25% year-on-year reflects continued growth into our capital base, in what we view as a strong market with healthy rate adequacy. We have seen an active quarter from an event perspective, notably natural catastrophe events across the US, Canada and the Caribbean, and as a well-diversified, predominantly quota share reinsurer we pick up our fair share of these, as we expect to do so. Looking forward and into 2025, we remain committed to risk selection and growing our business in a measured and balanced manner.”

Key highlights:

•   Gross premiums written of $957.3 million, a 25.2% increase over the first nine months of 2023

•   Reinsurance revenue of $588.2 million, a 30.3% increase over the first nine months of 2023

•   Overall portfolio risk-adjusted rate change for the nine months ended 30 September 2024 was 1%, net of claims inflation

•   Activity across smaller and mid-size natural catastrophe and risk events has been elevated, and in aggregate our estimated undiscounted net loss recorded in the third quarter was approximately $50 million, net of reinsurance and reinstatement premiums

•   Following the loss events of the third quarter, our undiscounted combined ratio was in the mid-90s on a year to date basis through 30 September 2024

•   High quality investment portfolio with average credit quality of AA; duration 2.5 years; book yield of 4.2% and market yield of 4.5% as at 30 September 2024 (respectively AA, 2.4 years, 2.8% and 5.0% as at 30 September 2023)

Outlook:

•   Market conditions remain stable across the business classes we target, with Property and Specialty lines in particular providing continued opportunities for growth

•   In October, Hurricane Milton made landfall in Florida and while we are in the early stages of assessing the loss we expect our undiscounted net loss to be in the range of $30-50 million, net of reinsurance and reinstatement premiums

•   Recent natural catastrophe and risk events, as well as pre-2020 industry legacy reserve development, are expected to support a resilient pricing outlook

•   The market outlook supports good risk / return dynamics, and our portfolio is well positioned to respond to market conditions. Rates in loss exposed classes, such as marine liability and civil unrest, are likely to respond positively

•   Conduit Re’s single location and efficient structure allow the team to be responsive to quickly changing market conditions

•   Our partnership is valued in the market, and clients are engaging early in January renewal conversations

•   Conduit Re remains well capitalised and positioned to deploy capacity to the classes it finds most attractive across its multi-line platform at upcoming renewals