Conduit Re confident after strong year

Conduit Holdings reported a comprehensive income of $190.8m in its preliminary results on Wednesday, reflecting a solid return on equity (RoE) of 22% for 2023.

The company said that was underpinned by a strong year-on-year growth in gross premiums written, which surged by 49.6% to reach $931.4m.

Conduit Re exhibited a remarkable improvement in its combined ratio, recording 72.1% for 2023 compared to 103.0% in the previous year, showcasing enhanced underwriting efficiency.

Moreover, Conduit Re maintained a prudent approach to expenses, with the total reinsurance and other operating expense ratio decreasing to 13.9% for 2023 from 14.6% in the prior year.

The company's investment portfolio remained robust, with an average credit quality of AA, contributing to a total net investment return of $70.6m for the year.

In line with its commitment to shareholder value, Conduit announced a final dividend of 18 cents, consistent with its stated dividend policy, resulting in a total 2023 dividend of 36 cents per common share.

Additionally, as of 31 December, Conduit Re's estimated Bermuda solvency capital ratio coverage ratio stood at 381%.

Looking ahead, Conduit Re said it anticipated continued growth and favourable market conditions in 2024.

The company said its disciplined underwriting approach has positioned it well for further expansion, with estimated ultimate premiums written of $582.4m at the 1 January renewal season, marking a significant increase of 38% compared to the previous year.

Conduit Re said it remained focussed on selective underwriting, with a strategic emphasis on property and specialty lines, leveraging attractive opportunities in these segments while maintaining stable combined ratio expectations.

The successful placement of outwards retrocession programs and catastrophe bond issuances further enhanced its risk management capabilities.

With a substantial pipeline of unearned premium of $500m, Conduit Re said it was for sustained growth in subsequent years.

“2023 was an outstanding year for Conduit Re, delivering a comprehensive income of $190.8m and an RoE of 22.0%,” said chief executive officer Trevor Carvey.

“Across all three divisions, the underwriting teams navigated the market well, being focused in choosing their preferred spaces to play and allocating our capacity to those where we saw the best opportunities and returns.

“We continue to benefit from a lack of legacy issues and our clean balance sheet has given us tremendous freedom to deploy exactly where we wish to.”

Carvey said strong investment performance, particularly in the last quarter of the year, supported the firm’s underwriting efforts.

“Entering our fourth year, we continue to deliver on our plans and the market landscape out there is offering up plenty of good opportunities for continued growth.”

At 0922 GMT, shares in Conduit Holdings were up 3.98% at 483.5p.

Reporting by Josh White for Sharecast.com.