TIDMCRE
RNS Number : 8825Y
Conduit Holdings Limited
19 January 2022
Conduit Holdings Limited January 2022 Trading Update
Conduit Holdings Limited ("CHL" or "Conduit") (Ticker: CRE)
Pembroke, Bermuda - 19 January 2022
Trading Update regarding 1 January 2022 renewals
CHL is today providing a trading update regarding business
written in the important 1 January 2022 renewal season.
Key highlights:
The highlights of the 1 January 2022 renewal season for
Conduit's main operating subsidiary Conduit Reinsurance Limited
("Conduit Re") are as follows:
-- Estimated ultimate premiums bound of approximately $262.6
million (2021: $154.4 million), an annual increase of approximately
70%.
-- Overall portfolio year on year renewal net rate change of
+5%; reflecting favourable improvement in both pricing and terms
& conditions, in line with management expectations. Positive
momentum expected to continue in 2022.
-- Maintaining a hit rate of approximately 20% reflecting our
strong submission flow and our disciplined and selective
approach.
-- Continued focus on attractive primary market business via
Quota Share business (64%) with an increase also seen in Excess of
Loss business (36%) with measured improvements in attachments and
terms.
-- Balanced portfolio diversified across Property (41%),
Casualty (33%) and Specialty classes (26%) in line with management
expectations.
-- Conduit Re's 1 January outwards reinsurance programme
successfully placed in line with management expectations, with some
further planned purchases expected to be made during the year as
our exposures build.
-- Strengthening the Conduit Re brand in the reinsurance market,
building further on established trading relationships with all
leading reinsurance broking intermediaries and demonstrating strong
client renewals and acceptance on new business.
Neil Eckert, Group Executive Chairman, commented:
"Conduit Re is benefiting from some of the most attractive
market conditions seen in a generation. Our second successful
January renewals season reflected the fact that 2021 was the fourth
costliest catastrophe year in history for the reinsurance industry
and total catastrophe losses for the insurance market over the last
five years now amount to over $500 billion. As a new market entrant
with a strong capital base, an unencumbered balance sheet and a
forward-looking approach to underwriting, we are well positioned to
benefit from continued favourable market conditions."
Trevor Carvey, Group Chief Executive Officer, commented:
"In a very late renewal season characterised by a tough
stand-off between brokers and underwriters, we saw continuing rate
improvements and tightening of terms and conditions across our core
classes. This has allowed us to take another big step forward in
achieving our long-term goal of building a market-leading
reinsurance underwriting franchise."
Underwriting activities
Conduit Re underwrote approximately $262.6 million of estimated
ultimate premiums bound on the important 1 January 2022 renewal
date (2021: $154.4 million), an annual increase of approximately
70%. We maintained a hit rate of approximately 20%. The business
written at 1 January was approximately 64% Quota Share business and
approximately 36% Excess of Loss business.
The split of our estimated ultimate premiums written by class of
business was:
Type of business 2022 % 2021 % Year on Year increase %
$m $m
Property 109.3 41 79.7 52 +37
------ ---- ---------- ---- ------------------------
Casualty 85.5 33 24.7 16 +246
------ ---- ---------- ---- ------------------------
Specialty 67.8 26 50.0 32 +36
------ ---- ---------- ---- ------------------------
Total 262.6 100 154.4 (1) 100 +70
------ ---- ---------- ---- ------------------------
(1) The 1 January 2021 estimated ultimate premiums bound figure
of $160.1 million has been adjusted to $154.4 million to reflect
management discounts applied plus adjustments for final signed
lines.
Pricing
Both pricing and terms and conditions improved in most of our
core markets. Conduit's overall year on year renewal net rate
changes for business written at 1 January 2022 were estimated to
be:
Type of business 2022 Year on Year change
Property 8%
-------------------------
Casualty 4%
-------------------------
Specialty 2%
-------------------------
Total weighted +5%
-------------------------
As Conduit Re is now in a position to compare the pricing and
terms and conditions of our renewal business to previous years, we
have provided rate change information on a "net" basis. These net
rate changes reflect management's assessment of rate changes net of
the impact of claims inflation, exposure changes and changes in any
other terms and conditions.
Outlook
We anticipate the momentum of the 1 January 2022 renewals to
continue into the other key renewal dates throughout the year which
will further support Conduit Re in delivering on its objective of
building a high quality reinsurance underwriting franchise.
We expect to announce our 2021 year-end financial results on 24
February 2022.
Conference call & presentation
Conduit management will host a live analyst and investor
videoconference, including a question-and-answer session, on
Wednesday, 19 January 2022 at 12pm (midday) UK time / 8am Bermuda
time.
The video conference will be available at:
https://conduitreinsurance.zoom.us/j/86758308003?pwd=YWNHV1cwUldtTmNuMVN0Tm8yeWtwdz09
Meeting ID: 867 5830 8003
Passcode: 750225
One tap mobile
8335480282,,86758308003#,,,,*750225# US Toll-free
8778535257,,86758308003#,,,,*750225# US Toll-free
Dial by your location
833 548 0282 US Toll-free
877 853 5257 US Toll-free
888 475 4499 US Toll-free
833 548 0276 US Toll-free
0 800 260 5801 United Kingdom Toll-free
0 800 358 2817 United Kingdom Toll-free
0 800 456 1369 United Kingdom Toll-free
0 800 031 5717 United Kingdom Toll-free
866 237 6875 Bermuda Toll-free
Meeting ID: 867 5830 8003
Passcode: 750225
Find your local number:
https://conduitreinsurance.zoom.us/u/koApAYYeE
An archive of the conference call will be available together
with the presentation slides through the Investors section of CHL's
website at www.conduitreinsurance.com from approximately 4:00 p.m.
BST on 19 January 2022.
--
Media contacts
Haggie Partners - David Haggie, Caroline Klein
+44 (0) 207 562 4444
conduitre@haggie.co.uk
Investor relations and other enquiries:
info@conduitreinsurance.com
About Conduit Re
Conduit Re is a pure play global reinsurance business based in
Bermuda. Conduit Reinsurance Limited is licensed by the Bermuda
Monetary Authority as a Class 4 insurer. A.M. Best has assigned a
Financial Strength Rating of A- (Excellent) and a Long-Term Issuer
Credit Rating of a- (Excellent) to Conduit Reinsurance Limited. The
outlook assigned to these ratings is stable.
Learn more about Conduit Re:
Website: https://conduitreinsurance.com/
LinkedIn: https://www.linkedin.com/company/conduit-re
Twitter: https://twitter.com/Conduit_Re
Important Information
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements may be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "estimates",
"may", "will", "aims", "could" or "should" or, in each case, their
negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or
intentions. Forward-looking statements include statements relating
to the following: (i) future capital expenditures, expenses,
revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects;
and (ii) business and management strategies and the expansion and
growth of Conduit's operations. Forward looking statements may and
often do differ materially from actual results. Any forward-looking
statements reflect Conduit's current view with respect to future
events and are subject to risks relating to future events and other
risks, uncertainties and assumptions relating to Conduit's
business, results of operations, financial position, liquidity,
prospects, growth and strategies. Forward looking statements speak
only as of the date they are made. No representation or warranty is
made that any forward-looking statement will come to pass. These
forward-looking statements speak only as at the date of this
announcement. Conduit disclaims any obligation or undertaking to
update or revise any forward-looking statements contained herein to
reflect actual results or any change in the assumptions, conditions
or circumstances on which any such statements are based unless
required to do so by law or regulation.
"Estimated ultimate premiums bound" is the estimated total gross
premiums written that is expected to be earned assuming all bound
contracts run to the end of the period of cover.
"Hit rate" is the percentage contracts written as a proportion
of the submissions received.
The Conduit Re renewal year on year pricing change measure is an
internal methodology that management intends to use to track trends
in premium rates of a portfolio of reinsurance contracts. The
change measure reflects management's assessment of relative changes
in price, exposure and terms and conditions. It is also net of the
estimated impact of claims inflation. The calculation involves a
degree of judgement in relation to comparability of contracts and
the assessment noted above, particularly in Conduit Re's initial
years of underwriting. To enhance the methodology, management may
revise the methodology and assumptions underlying the change
measure, so the trends in premium rates reflected in the change
measure may not be comparable over time. Consideration is only
given to renewals of a comparable nature so it does not reflect
every contract in the portfolio of Conduit Re contracts. The future
profitability of the portfolio of contracts within the change
measure is dependent upon many factors besides the trends in
premium rates.
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END
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