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Conduit Re secures AM Best ratings following $1.1bn IPO

8th December 2020 - Author: Charlie Wood

Newly-launched property and casualty reinsurer Conduit Re has secured a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” from AM Best.

Conduit ReThe outlook assigned to these Credit Ratings (ratings) is stable.

Led by founders Neil Eckert and Trevor Carvey, Conduit Re completed its initial public offering of 164,129,996 shares on the London Stock Exchange earlier this month, raising approximately $1.1 billion.

AM Best says these ratings reflect Conduit Re’s balance sheet strength, which it categorises as very strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management (ERM).

AM Best expects Conduit Re to maintain the strongest level of risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), over its five-year start-up phase, taking into account AM Best’s additional capital requirements for new company formations.

Conduit Re’s adequate operating performance assessment is based on its well-defined business plans, and takes into account its competitive environment and heightened execution risk during the start-up phase.

Given its lack of competitive position and established distribution network in a competitive reinsurance marketplace, AM Best views Conduit Re’s business profile as limited.

However, the experience of senior management and underwriters in the targeted classes of business increases the likelihood of market acceptance and successful execution of the company’s business plans.

AM Best also notes that Conduit Re has a clearly defined ERM framework in advance of writing business, which includes plans to control key risks.

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