Conduit Re faces headwinds in the first year since launch

Conduit Holdings Limited has reported a comprehensive loss of $42 million after its first year of underwriting.

The Bermuda-based P&C and speciality reinsurance underwriting business that completed its IPO in December 2020 reports gross written premiums of $378.8m for the year ending 31 December 2021. Its combined ratio for the year was 119.4%.

The loss reflects the difficulties posed by the fourth costliest catastrophe loss year on record. The reinsurer’s net natural catastrophe related losses in 2021 were $53.8 million, which contributed 27.7% of its reported loss ratio and combined ratio.

The biggest impact was from Hurricane Ida and the European floods, both in the third quarter of the year. Its ultimate loss estimate, net of reinsurance and reinstatement premiums, for the two events is $27.1m: $15.0m for Ida and $12.1m for the floods.

However, from a standing start, the company reports $460m of estimated ultimate premiums written, in line with its first-year plan. January 2022 renewals ultimate premiums written are estimated at $268.2 million, up 74% on 2021.

Despite the loss, group executive chairman Neil Eckert was upbeat.

“Market conditions are attractive, and we are anticipating further rate hardening during 2022,” he said. “Our CEO Trevor Carvey and his team have achieved a huge amount in our first year of operations and built a well-balanced underwriting portfolio. As we enter our second year, our January 2022 premiums were ahead of management expectations.

“I am confident that Conduit Re will deliver on its long term objectives.”