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Trevor Carvey, CEO, Conduit Re
22 February 2023News

Bullish Conduit Re highlights strong growth, hard market

Bermuda-based Conduit Re posted another loss in 2022, but the company highlighted its rapid growth, with gross premiums written (GPW) increasing by 68%, and what it described as a structural shift in the marketplace as causes for optimism.

“The significant movement in pricing and terms and conditions is evidence of a structural shift in the marketplace 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 throughout 2023 and beyond,” it stated in its 2022 results.

The company’s GPW increased by 68% to reach $637.5 million last year; its net premiums earned increased by 148.4% to reach $482.3 million. It posted a loss, however, of $89.7 million, worse than the $42 million loss it posted in 2021. Its combined ratio last year was 107%, an improvement on the 119.4% it posted a year earlier.

It stressed that last year was notable for extreme natural catastrophe and man-made losses for the industry. Its balanced and diversified portfolio recorded a small underwriting profit of $0.3 million. It also made a net investment loss of $52.8 million which includes net unrealised losses of $67.8 million.

The company gave several causes for optimism. It noted that it has a significant pipeline of unearned premium of approximately $355 million which will flow through in subsequent years. It also stressed the advantage of having a single office location that “enables dynamic decision making in response to market opportunity”. It added that it has “developed a reputation for being a responsive, reliable and relevant counterparty”.

It terms of market conditions, it noted that the January 1 renewal exhibited significant hardening of pricing and terms and conditions. It estimates it wrote premiums of approximately $421.4 million (2022: $262.6 million) in that renewal, an annual increase of 60.5%.

Trevor Carvey, CEO, said: “Our planned growth path has continued over the last 12 months while all the time we have maintained our same disciplined approach to risk selection. We have seen exceptional growth, supported by our legacy-free balance sheet and a strong capital base. In a year where the industry has experienced extreme natural and man-made losses, the resilience of our results validates our business model.

“Looking forward, we are perfectly positioned to take advantage of the current exceptional market conditions. As the business grows, we will see the benefit from increasing efficiencies of scale and the significant pipeline of revenue we have in place which will continue to flow through to earnings. We are excited by our business prospects for 2023.”

Neil Eckert, executive chairman, commented: “We have delivered outstanding premium growth in 2022 and have continued that trajectory at the 1 January 2023 renewals.

“More importantly, we have delivered our first underwriting profit in a year notable for its elevated catastrophe activity. Our business has capital to continue its planned growth and to take advantage of the opportunities that we see.”




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