Bermuda-based reinsurer Conduit Re recorded a rise in gross premiums written (GPW) in 2023 to $931.4 million, as reinsurance revenue increased 61% year-on-year to $633 million and the company’s combined ratio strengthened considerably to 72.1%.
Conduit Re has today reported a strong set of results for the year, with CEO Trevor Carvey describing 2023 as an “outstanding year” for the company.
Estimated ultimate premiums written for 2023 rose 50% to $966.6 million from $644.8 million, with 58% growth in property, 20% growth in casualty, and 95% growth in specialty.
In total, GWP increased 50% year-on-year to more than $931 million compared with $623 in 2022, with growth of 63% in property, 17% in casualty, and strong growth of 91% in specialty.
Reinsurance revenue increased from $392 million in 2022 to $633 million in 2023, driven by continued growth in the business plus the earn-out of premiums from prior underwriting years. After ceded reinsurance expenses, the net reinsurance revenue result hit $556 million, an increase of 62% on the $344 million reported in 2022.
Year-on-year, ceded reinsurance expenses increased to $77 million from $49 million, driven by the additional limits purchased due to the growth of the inwards portfolio exposures plus price increases on renewals.
In terms of losses and loss related amounts, less ceded reinsurance recoveries, the total was $328 million for Conduit Re in 2023, compared with $333 million in 2022. The reinsurer states that despite another year for catastrophe activity, no major event loss, individually or in aggregate, had an outsized or material impact on the company during the year.
The firm’s discounted net loss ratio for 2023 was 58.2% compared with 88.4% for the 2022 year, while the undiscounted net loss ratio was 68.0% and 94.7%, respectively.
All in all, the reinsurance service result jumped from $10.4 million in 2022 to $183.6 million in 2023.
For 2023, Conduit Re has recorded a year-on-year 30.9 percentage point improvement in its discounted combined ratio to 72.1%, while the undiscounted combined ratio strengthened by 27.4 percentage points to 81.9%.
On the asset side of the balance sheet, the reinsurer has today reported a net investment result of $70.6 million for 2023 compared with a loss of $52.8 million in 2022.
Comprehensive income for the year ended December 31 2023 hit $190.8 million at Conduit Re, a huge improvement from the loss of $43.9 million seen in 2022.
“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. Strong investment performance, particularly in the last quarter of the year, supported our 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,” said CEO Carvey.
Turning to Conduit Re’s 1.1 2024 reinsurance renewal outcome, and the firm highlights an ongoing focused and disciplined approach to underwriting, which led to continued growth at the renewals.
Estimated premiums written increased 38% from the 1.1 2023 renewals to $582.4 million, as the overall portfolio year-on-year risk-adjusted rate change, net of claims inflation, increased by 3%.
Conduit Re highlights “very strong levels” of renewing business with key partners, complemented by high quality new business, and an increased weighting towards property and specialty on the back of attractive underwriting opportunities.
The firm maintained a selective approach to casualty lines to keep a stable combined ratio expectation.
Additionally, Conduit Re successfully placed its outwards retrocession programme with a diverse and high quality panel, complementing the June 2023 sponsored issuance of its $100 million catastrophe bond, Stabilitas Re Ltd. (Series 2023-1).
“Conduit had an excellent 2023. The team’s experience and deep market knowledge has delivered a fantastic performance and gained enduring support from clients and brokers alike. Market conditions remain attractive to support strong organic growth while maintaining a robust capital position,” said Neil Eckert, Executive Chairman.
