Latest Trading Update From Conduit Holdings

Here’s the latest update from Conduit Holdings;

Conduit Holdings, the ultimate parent company of Conduit Re, a Bermuda-based multi-line reinsurance business, today presents its trading update for the nine months ended 30 September 2026.

Neil Eckert, Chief Executive Officer, commented: “Throughout 2026, we have executed our underwriting strategy as planned, with continued progress in rebalancing the portfolio towards excess of loss, growing with core clients where pricing and margins remain adequate, and maintaining a robust retrocessional programme to manage underwriting volatility and reduce PMLs. As market conditions soften, we expect to carry this fundamental strategy into the upcoming renewal season.

2026 has been marked by relatively benign insured losses from natural catastrophes, elevated frequency of Specialty losses and volatile investment markets. Our investment performance has been impacted by rising treasury yields and unrealised losses during the year, but our asset portfolio remains high quality and our investment income will benefit from higher reinvestment rates over time.

We are pleased to have secured our leadership succession plans with the arrival of Mark Pickering as CFO on 30 November and Christian Dunleavy as CEO on 1 March 2027. These appointments, along with other executive hires over the last 18 months, position Conduit with a strong leadership team to build on our progress and take the business forward with confidence.”

Key highlights

•     Gross premiums written have declined modestly as we continued to execute our underwriting strategy to rebalance the Property portfolio towards higher margin excess of loss business in a softening market, while Casualty premiums have increased 8.9% due to growth with preferred clients.

•     Reinsurance revenue of $673.2 million increased 1.6% over the first nine months of 2025.

•     Market conditions have softened as expected but pricing remains broadly adequate on the business we are targeting; overall portfolio risk-adjusted rate change of (6)% for the nine months ended 30 September 2026, net of claims inflation, reflects stable conditions in Casualty, balanced with softening prices in Property and Specialty.

•     The first nine months of 2026 was a relatively benign period for insured natural catastrophes but experienced elevated frequency of Specialty losses; additionally, our undiscounted ultimate loss estimates, net of ceded reinsurance and reinstatement premiums, for previously reported loss events remain stable.

•     Total managed investments and cash of $2.3 billion increased approximately 14% or $280 million compared to 30 September 2025, despite unrealised losses related to a significant increase in treasury yields during 2026.

•     As a result of unrealised losses, Conduit generated a net investment return of (0.4)% for the nine months ended 30 September 2026, while net investment income continued to grow and book yield on the portfolio increased to 4.3% at 30 September 2026.

Outlook

•     Record global reinsurance capital levels and strong recent returns have led to softening rates, particularly in Property and Specialty lines, which is expected to continue.

•     We will continue to manage our underwriting appetite and capital deployment carefully as market conditions continue to soften, focusing on preferred clients and classes with more stable conditions.

•     Rising market yields and reinvestment rates during the nine months ended 30 September 2026 are expected to support increasing investment income as cashflow is invested.

•     In keeping with a commitment to active capital management, the Board intends to continue to distribute excess capital to shareholders, in line with the company’s capital management strategy and applicable legal and regulatory requirements.

Underwriting update

Premiums

Gross premiums written for the nine months ended 30 September1:

During the nine months ended 30 September 2026, Casualty continued to grow as we identified select opportunities to align with preferred partners, with the rate of growth versus the prior year moderating as the year progressed, reflecting the writing profile of the underlying business and strong growth in the second half of 2025. Property and Specialty premiums declined as we continued to rebalance towards excess of loss business and maintained a disciplined approach to new and renewal business. Premium changes compared to the prior-year quarter and year-to-date periods were also impacted by a more conservative view of premium estimates given current market conditions.

Reinsurance revenue

Reinsurance revenue for the nine months ended 30 September:

Pricing

Following significant pricing increases over the past several years, pricing levels softened during the first nine months of 2026 with some expansion in terms and conditions. Strong industry returns and record global reinsurance capital levels have contributed to softening rates, primarily in Property and Specialty lines. In Casualty, pricing remains more stable, although some moderate increases in competition have been observed.

Conduit Re’s overall risk-adjusted rate change for the nine months ended 30 September 2026 was (6)%. Risk-adjusted rate change reflects management’s assessment of rate changes of our renewal business net of the impact of claims inflation, exposure changes and changes in other terms and conditions. The risk-adjusted rate change by segment was:

Net reinsurance losses and loss related amounts

The first nine months of 2026 was a relatively benign period for insured natural catastrophes but has experienced elevated frequency of Specialty losses. However, no individual event loss had a material impact on Conduit Re, including losses related to the Middle East conflict. Initial loss estimates associated with the Middle East conflict were recognised in prior quarters, with no changes to those estimates in the third quarter. As the conflict is ongoing, there remains uncertainty in estimating the ultimate losses.

The first nine months of 2025 were a highly active period of natural catastrophe and risk losses for the industry. Our undiscounted ultimate loss estimates, net of ceded reinsurance and reinstatement premiums, for previously reported loss events remain stable.

Our loss and reserve estimates have been derived from a combination of reports and statements from brokers and cedants, modelled loss projections, pricing loss ratio expectations and reporting patterns, all supplemented with market data and assumptions. We continue to review these estimates as additional information becomes available.