Conduit Holdings Limited, a new property and casualty (P&C) and specialty reinsurance underwriting business, led by founders Neil Eckert and Trevor Carvey, has announced its intentions to float on the London Stock Exchange (LSE).
Conduit looks set to be the latest edition to the Class of 2021 reinsurers and has been established to capitalise on what the company’s founders feel is an exceptional market opportunity.
The new reinsurance company will focus on producing strong risk-adjusted returns from a diversified and focused business plan, and expects to write property, casualty, and specialty lines of business.
It’s no secret that current market dynamics are more favourable for reinsurers after a prolonged softened market state, underpinned by consecutive years of elevated losses, low interest rates, fading reserves, and more recently the impacts of the ongoing COVID-19 pandemic.
As a result, insurance and reinsurance markets are hardening alongside the tightening of terms and conditions, and against this backdrop, Conduit enters the market with no legacy issues. Furthermore, following its plans to proceed with an initial public offering (IPO), the firm’s strong and unencumbered balance sheet will be fully available to write new business in what Eckert and Carvey see as an attractive market landscape.
“The business plan has a balanced approach to catastrophe risk exposures, generating profit and franchise value through the quality of its underwriting and its select portfolio of high-quality business,” explains the company.
Commenting on the announcement, Eckert said: “Trevor and I have traded in hard markets before, but we believe these are exceptional times by any standards and a really opportunistic time to launch a new reinsurance company bringing fresh capital and a very focused business plan to the market. We are enthused by the industry support we have had whilst developing our ideas for Conduit and look forward to opening for business.”
Carvey added: “We will be targeting an Excess of Loss and Quota Share book of treaty reinsurance business across Property, Specialty and Casualty lines. We are excited by a market where there is so much price improvement across so many classes. For the first time in a long while we think a well-capitalised new entrant can come into the market and successfully target quality business in scale and at historically attractive rates.”
Regarding the Conduit IPO, it’s expected that $1.1 billion of new shares are to be issued by the company, the proceeds of which will be used to write reinsurance in line with its business plan. Additionally, the net proceeds will be used to capitalise the firm to a level such that its capitalisation will meet the levels required for the purposes of its targeted A.M. Best rating of A- (Excellent).
Co-founder, Director and proposed Executive Chairman of the new reinsurance entity, Eckert, became a reinsurance broker in 1980. In 1995 he founded Brit Insurance Limited and served as CEO until 2005. He was also the co-founder and CEO of Climate Exchange plc until its sale to Intercontinental exchange in 2010.
Following this, he founded Aggregated Micropower which was sold in January 2020, and currently serves as Chairman of Incubex and is also on the board of Ebix.
Co-founder, proposed Director and proposed Group CEO, Carvey, previously led the consolidation and subsequent profitable turnaround of the GE Frankona Marine & Energy Global portfolio. In 2002 he joined Arch Re Bermuda as a founding underwriting leader, and played a key role in the development of the reinsurance business.
Carvey then joined Harbor Point Re in the UK in 2007 to lead the build out of the European operation. Subsequently, he held the role of CUO Europe in Alterra RE business and was part of the team responsible for the successful integration of the Alterra Global Re unit into Markel.
In 2015 he joined Hamilton to assist in building out a new treaty reinsurance strategy in the UK and subsequently took on the overall role for leading the Lloyd’s approval of the syndicate business plan as an active underwriter.
Alongside the two co-founders, Conduit has announced Mark Heintzman as Director and proposed Chief Financial Officer (CFO). Most recently, Heintzman served as CFO for Ironshore Insurance Limited.
In his new role with Conduit, he will be based in Bermuda and takes on responsibility for managing all financial aspects of the Group’s business activities, including its outsource partner relationships, all aspects of internal and external financial reporting (including A.M. Best), and the execution and oversight of the Group’s Investment Management strategy.
Charles Collis, a director in the Corporate department in the Bermuda office of Conyers Dill & Pearman and Head of the Bermuda Insurance Practice, has also joined Conduit as a Director. However, he is only a Director for the purposes of the incorporation of the firm which occurred on October 6th, 2020, and for the purposes of the Registration Document only; he will not have an ongoing role on the Board, explains the firm.
