Conduit increases property exposure in January 1 renewals

Conduit Re increased its exposure to property and specialty risks while pulling back on casualty in the January 1 renewals, the Bermuda-based re/insurer said.  

Overall, Bermuda-based Conduit increased its renewal book by 38% on a 3% risk-adjusted rate change, with a 58% increase in ultimate premiums in its property book leading the way, the company said. 

“The quality and structure of the business being written is exactly where I want it to be,” CEO Trevor Carvey (pictured) said. “We look forward to capitalising on the high quality growth opportunities in this market.”

“Attractive” risk-reward balances in property and specialty drove growth selection, CUO Gregory Roberts added. 

Conduit management said the company is “well capitalised” and “anticipates continued year-on-year growth” through the upcoming 2024 renewals. 

The outwards retrocession renewal was said to have been secured “successfully” with no material changes to the net PMLs tallies which still show “a balanced risk versus reward profile”.

In the property book, estimated ultimate premiums rose 58% to $311 million on a 5% risk-adjusted rate gain after the 39% 2023 gain, increasing their allocation in the overall January 1 book by 7 percentage points to 54%.  

Conduit likes momentum and growth opportunities in E&S and D&F property portfolios, rate gains in European XoL and overall US margins despite some increase in price competition in higher layers. 

Specialty took the next strongest increase at 52% year on year to $170 million in estimated premium on a 2% blended risk-adjusted rate gain. Speciality rose slightly to 29% of the total book. 

Conduit Re's called out concerns in political risk classes and aviation.  

To secure segment growth, Conduit went for “new strategic partner specialty deals” that gave the book “lower embedded volatility and broad mix of attractive sub classes,” management said. 

Casualty was trimmed outright but management said it had held margins in the book. Loss ratios on the book will likely be higher, but Conduit believes it has fully protected margins via lower acquisition costs. 

Estimated ultimate premiums in casualty came down 10% following outright reductions in D&O and “close review” of other underlying portfolios, taking 10 percentage points out of the casualty portfolio allocation to a mere 17%. Average risk adjusted rates in the class were down 2% year on year with a call out for softening in professional lines. 

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