Conduit reports 71% rise in first-half GWP

Conduit Holdings recorded a more than 70% increase in gross written premium (GWP) in the six months to 30 June, to $359 million. It estimates that ultimate written premium will be just over $333 million, a year-on-year increase of over 49%.

Its combined ratio deceased by over 22% in the period, to 105.1 from 127.2.

It posted an H1 comprehensive loss of $61.4 million. This was partly due to an $24.6 million estimated loss in relation to Ukraine, including an estimate of the impact of potential aviation claims. It was also owing to a net unrealised loss on investments of $54.3 million reflecting the mark to market adjustment driven by expectations of rising interest rates.

Trevor Carvey, group chief executive officer, said: “We are seeing strong demand for our offering and we continue to take a highly selective approach to our underwriting in a market which is exhibiting increasingly strong fundamentals. The business is normalising, our combined ratio will be trending towards our target of mid-80s steady state and the business is in an excellent position to continue to capitalise in our chosen markets.”

About 70% of the company’s portfolio is non-cat business. Its “robust” risk selection and contract structuring process means it has experienced relatively low levels of catastrophe losses in H1 despite higher than average levels of insured catastrophe losses in the market.

Weighting towards quota share business allows Conduit to participate in the “significant” price rises and improved terms and conditions experienced in the primary markets at this point in the cycle, whilst reducing volatility.

Market conditions remain strong, it said, with continuing rate increases and improvements in terms and conditions; 2022 year-to-date indicative renewal rate increase of 4% net of inflation.

The reinsurance market is “significantly capacity constrained”, which is driving strong demand for Conduit’s unencumbered capacity and strong balance sheet.

Neil Eckert, executive chairman added: “We have built a quality underwriting operation which is perfectly positioned at a time where there is a shortage of reinsurance capacity in the market–Conduit’s business model was constructed for precisely these circumstances. The continued hardening of the market provides Conduit with a substantial opportunity for profitable growth to build out the business.”