Bermuda-headquartered property and casualty reinsurance group Conduit Holdings, owner of Conduit Re, has reported continued expansion at the recent January renewals, adding 60% in premiums and now looking forward to more rate momentum through 2023.
The reinsurer said this growth has been secured through a combination of new business and renewals, while higher pricing and improved terms and conditions have also been achieved across the underwritten reinsurance portfolio.
Trevor Carvey, Chief Executive Officer, commented, “This has been an exceptional renewal season. 60% premium growth is the true indication of the underwriting conditions we have experienced. This is manifesting itself across pricing and rates, terms and deductibles, and the strong increase in new business that we have enjoyed. From a capital perspective, we have plenty of room to execute our plan and the growth we anticipate.”
Conduit Re now estimates its ultimate premiums written at $421.4 million at January 2023, up roughly 60% on 2022 ($262.6 million).
The reinsurer has cited “extremely strong Property and Specialty market conditions”, which provided the opportunity to expand across these classes of underwriting business.
At the same time, Conduit Re has been more selective in how it grows in Casualty lines, but notes that these also “continue to provide attractive underwriting opportunities.”
The company claims a continued trend towards a mid-80’s combined ratio, across the medium term.
This is supported by improved terms and conditions, lower acquisition costs on renewed business, and the current exceptional pricing environment, the reinsurer said.
Conduit Re cites a significant 19% risk-adjusted rate change, net of inflation, across its January renewal portfolio, with property running at a 39% risk-adjusted rate change, casualty 1% and Specialty 14%.
The company believes it is “well placed to continue to grow in the current market conditions” given it has a legacy-free balance-sheet.
Property business comprised 47% of the premiums written at 1/1 2023, an 81% increase in premium volume on the prior year, Conduit Re said.
Casualty risks made up 27%, while specialty lines were 26%, growing by 31% and 65% respectively.
Gregory Roberts, Chief Underwriting Officer, said, “We experienced a busy and rewarding start to the year. In the 1 January renewals we increased our weighting towards Property and Specialty business, capitalising on an exceptional shift in pricing, while balancing it against our Casualty book, which is still attractively priced. A highlight was that we successfully secured our retrocession programme in line with our objectives.
“As a team, we are absolutely delighted in the way that we executed the renewals period and feel that we have developed a reputation as being a responsive, reliable and disciplined counterparty. We expect market conditions to continue to offer opportunities for further growth as the year develops.”
Conduit Re says that the pricing environment is evidence of a “structural shift in the market- place caused by a fundamental re-pricing of risk and an imbalance in the supply and demand of capital.”
A situation that the reinsurer believes will endure, “creating the opportunity for improved margins in our business across the rest of 2023 and beyond.”
Neil Eckert, Executive Chairman, added, “This has been an exciting January renewals. Premium up, conditions improving, and our team has had a really good start to 2023.
“We are continuing to see reserve strengthening across the reinsurance industry, which gives Conduit Re with its legacy-free balance sheet, competitive edge. Conduit Re is now truly through its start-up phase.”
