TIDMCRE
RNS Number : 7546F
Conduit Holdings Limited
09 November 2022
Pembroke, Bermuda - 9 November 2022
Conduit Holdings Limited
("Conduit Re")
Third Quarter 2022 Trading Update
Strong premium income growth; positive future earnings benefits
from embedded Quota Share premium pipeline; balance sheet strength
and underwriting focus put Conduit Re in an excellent position to
take advantage of exceptional market conditions
Conduit Re, a pure-play global reinsurance business based in
Bermuda, is today presenting its trading update for the nine months
ended 30 September 2022.
Key highlights:
-- Successful build out of market-leading reinsurance platform
-- $600.9 million of estimated ultimate gross premiums written
for the nine months ended 30 September 2022, a 55% increase on the
nine months ended 30 September 2021
-- Underlying business trending towards a mid-80's combined ratio in the medium term
-- Strong, legacy-free balance sheet; AM Best A- (Excellent)
rating; well placed to write additional business into highly
attractive market conditions
-- High quality book of business with embedded pipeline of
premium income and strengthening renewal experience
-- $1.1 billion of estimated ultimate premiums written since launch in December 2020
-- Year-to-date overall renewal price change of 4%, net of estimated claims inflation
-- High-quality quota share business contracted since December
2020 provides an embedded pipeline of premium which is flowing
through to income
-- Exceptionally attractive market conditions exhibiting
accelerating improvement in risk-adjusted rate and terms and
conditions
-- Shortage of reinsurance capacity and increasing demand for
reinsurance protection combine to make this a very exciting market
for reinsurers
-- Underlying inflation dynamic is generating increasing demand
for reinsurance as asset values increase whilst the supply of
reinsurance has been constrained by withdrawal of capital and
capital depletion across the industry
-- The 1 January renewal season remains a primary indication
point for pricing in the reinsurance market and all signals
currently point to a significant acceleration in risk-adjusted rate
improvements in an already hardening market
-- Conduit Re's strategy, the team's market reputation and
Conduit Re's strong and legacy-free balance sheet put it in an
excellent position to take advantage of these highly attractive
market conditions
-- Q3 Trading
-- Estimated ultimate premiums written up 55% on the nine months
ended 30 September 2021, to $600.9 million; gross premiums written
up 81% to $528.1 million for the same period
-- In a high catastrophe loss year for the industry, Conduit
Re's focused risk selection restricted the impact from major loss
events; current estimated loss, net of reinsurance and
reinstatement premiums, of approximately $40 million from Hurricane
Ian and $24.6 million (unchanged) from the Ukraine crisis
-- High-quality (AA average credit) investment portfolio with
short average duration of 2.3 years; unrealised investment losses
driven by rising rates are expected to unwind as the securities
mature; opportunity to reinvest at attractive yields
Neil Eckert, Conduit Re Executive Chairman, commented:
"As we move towards the industry-important 1 January renewals,
the existing capacity shortage in the reinsurance sector is turning
into a capacity crunch.
Hurricane Ian and a deteriorating macro-economic situation have
further impacted balance sheets and risk appetite on both sides of
supply and demand for reinsurance. I believe this hardening
environment is the best the industry has seen in decades."
Trevor Carvey, Conduit Re Chief Executive Officer,
commented:
"The creation and development of Conduit Re has been perfectly
timed. In the past two years, we have built a lean and efficient
reinsurance business, with an excellent underwriting team that is
ideally positioned to take full advantage of current market
conditions. The growth we have shown in our premium income,
together with the high-quality book of business we have assembled,
which will continue to earn through to our income statement in
future periods, gives us great confidence for the rest of this year
and beyond."
Premiums written for the nine months ended 30 September:
2022 2021 Year on year change %
$m $m
Estimated ultimate premiums written 600.9 387.7 55.0%
Gross premiums written 528.1 291.2 81.4%
Business update
During the first nine months of 2022, Conduit Re continued to
show growth across all segments thanks to improving rates and,
primarily, to new business. Client count and submission numbers
have increased in line with Conduit Re's growth strategy. Rate
change continues to be positive, outpacing inflation.
Underwriting activities
Our estimated ultimate premiums written for the nine months
ended 30 September 2022 and 30 September 2021 were as follows:
Segment 2022 % of total 2021 % of total Year on year change %
$m $m
Property 292.8 48.7% 193.5 49.9% 51.3%
Casualty 200.8 33.4% 126.8 32.7% 58.4%
Specialty 107.3 17.9% 67.4 17.4% 59.2%
Total 600.9 100.0% 387.7 100.0% 55.0%
Our gross premiums written for the nine months ended 30
September 2022 and 30 September 2021 were as follows:
Segment 2022 % of total 2021 % of total Year on year change %
$m $m
Property 262.3 49.7% 162.9 55.9% 61.0%
Casualty 181.1 34.3% 77.2 26.5% 134.6%
Specialty 84.7 16.0% 51.1 17.6% 65.8%
Total 528.1 100.0% 291.2 100.0% 81.4%
The split of our estimated ultimate premiums written between
quota share and excess of loss for the nine months ended 30
September 2022 and 30 September 2021 remains broadly unchanged, at
approximately 70%-30% respectively, with the quota share portion of
gross premiums written being 68% and 63% respectively.
Pricing
Both pricing and terms and conditions continue to improve in
most of the markets we are targeting, particularly at the primary
level, hence our focus remains towards ground-up quota share
business.
Conduit Re's overall indicative renewal price changes by class
of business, net of claims inflation, in the year-to-date were
estimated to be:
Property Casualty Specialty
+7% +1% +2%
Losses
Hurricane Ian made landfall in the US state of Florida as a
strong category 4 hurricane on 28 September 2022. It continued its
path north-east across Florida before making a second landfall in
South Carolina. Based on current information, our ultimate loss
estimate, net of reinsurance recoveries and reinstatement premiums,
for this event is approximately $40 million. While reserves have
been recorded for this recent event, significant uncertainty exists
in relation to the ultimate losses.
As regards the ongoing crisis in Ukraine resulting from the
Russian invasion on 24 February 2022, Conduit Re has potential
exposure across its property and specialty reinsurance books, via
classes such as aviation, war on land and marine war. There is
significant uncertainty in estimating losses emanating from the
conflict, not least as it is an ongoing event. Based on current
information, Conduit Re's estimated ultimate losses, net of
reinsurance recoveries and reinstatement premiums, in relation to
the conflict are unchanged at $24.6 million.
Our loss and reserve estimates have been derived from a
combination of market data and assumptions, modelled loss
projections and reports from brokers and cedants. We will continue
to keep these estimates under review as more detailed information
becomes available.
Our ultimate loss estimates, net of reinsurance and
reinstatement premiums, for the previously reported 2021 loss
events remain relatively stable.
Investments
In line with our stated strategy, we continue to maintain our
conservative approach to managing our invested assets with a strong
emphasis on preserving capital and liquidity. Our strategy remains
maintaining a short duration, highly-rated portfolio, with due
consideration of the duration of our liabilities.
The Federal Reserve has raised rates six times thus far in 2022,
and has indicated further increases before year-end. As a result,
the portfolio return is negative 6.2%, mostly due to unrealised
losses, for the nine months ended 30 September 2022. While we
expect market volatility to remain elevated in the near term,
Conduit Re expects to be able to reinvest at higher rates as the
existing portfolio rolls over.
The managed portfolio is as follows:
30 September 2022
Fixed maturity securities 90.5%
Cash and cash equivalents 9.5%
Key investment portfolio statistics for our fixed maturities and
managed cash were:
30 September 2022
Duration 2.3 years
Credit Quality AA
Book yield 1.8%
Market yield 4.8%
Conduit Re does not have any direct exposure to Russian or
Ukrainian assets in its investment portfolio.
Capital and dividends
Strong capital position with total capital and tangible capital
available to Conduit Re at 30 September 2022 of $0.8 billion.
During the third quarter of 2022, Conduit Re's Board of
Directors declared an interim dividend of $0.18 (approximately
GBP0.15) per common share (in respect of the first half of 2022)
which was paid in pounds sterling on 9 September 2022 to
shareholders of record on 19 August 2022, resulting in an aggregate
payment of $29.6 million.
Details of Webcast and Conference Call
Conduit Re's management team will host a live presentation for
investors and analysts, including a question and answer session,
via a live webcast and conference call on 9 November 2022 at 12pm
(midday) UK time / 8am Atlantic time.
To access the live webcast, please register in advance here:
https://www.lsegissuerservices.com/spark/ConduitHoldingsLtd/events/73973512-6a2a-40de-a2e1-722a409c425f
To access the live conference call, please register to receive
unique dial-in details here:
https://cossprereg.btci.com/prereg/key.process?key=PTHJ9QKYR
A recording of the presentation together with the presentation
slides will be made available on the Investors section of Conduit
Re's website at www.conduitreinsurance.com from approximately 4:00
p.m. BST on 9 November 2022.
-END-
Media contacts
H/Advisors Maitland - Vikki Kosmalska / Alistair de
Kare-Silver
+44 (0) 207 379 5151
conduitre@h-advisors.global
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.
Conduit Holdings Limited is the ultimate parent of Conduit
Reinsurance Limited and is listed on the London Stock Exchange
(ticker: CRE).
Learn more about Conduit Re:
Website: https://conduitreinsurance.com/
LinkedIn: https://www.linkedin.com/company/conduit-re
Twitter: https://twitter.com/Conduit_Re
Market abuse regulation: This announcement contains inside
information for the purposes of Article 7 of Regulation (EU) No
596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018.
Important Information
This announcement includes 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",
"goals", "objective", "rewards", "expectations", "projects",
"anticipates", "expects", "achieve", "intends", "tends", "on
track", "well placed", "estimated", "projected", "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,
pricing rate changes, terms and conditions, earnings, synergies,
economic performance, indebtedness, financial condition, dividend
policy, claims development, losses and loss estimates and future
business prospects; and (ii) business and management strategies and
the expansion and growth of Conduit Re's operations.
Forward-looking statements may and often do differ materially
from actual results. Forward-looking statements reflect Conduit
Re'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 Re's business, results of
operations, financial position, liquidity, prospects, growth and
strategies. These risks, uncertainties and assumptions include, but
are not limited to: the possibility of greater frequency or
severity of claims and loss activity than Conduit Re's
underwriting, reserving or investment practices have anticipated;
the reliability of catastrophe pricing, accumulation and estimated
loss models; the actual development of losses and expenses
impacting estimates for claims which arose as a result of recent
loss activity such as the Ukraine crisis, Hurricanes Ian and Ida,
and the European storms and floods in 2021; the impact of complex
causation and coverage issues associated with attribution of losses
to wind or flood damage; unusual loss frequency or losses that are
not modelled; the effectiveness of Conduit Re's risk management and
loss limitation methods, including to manage volatility; the
recovery of losses and reinstatement premums from our own
reinsurance providers; the development of Conduit Re's technology
platforms; a decline in Conduit Re's ratings with A.M. Best or
other rating agencies; the impact that Conduit Re's future
operating results, capital position and ratings may have on the
execution of Conduit Re's business plan, capital management
initiatives or dividends; Conduit Re's ability to implement
successfully its business plan and strategy during 'soft' as well
as 'hard' markets; the premium rates which are available at the
time of renewals within Conduit Re's targeted business lines;
increased competition on the basis of pricing, capacity or coverage
terms and the related demand and supply dynamics as contracts come
up for renewal; the successful recruitment, retention and
motivation of Conduit Re's key management and the potential loss of
key personnel; the credit environment for issuers of fixed maturity
investments in Conduit Re's portfolio; the impact of swings in
market interest rates, currency exchange rates and securities
prices; changes by central banks regarding the level of interest
rates and the timing and extent of any such changes; the impact of
inflation or deflation in relevant economies in which Conduit Re
operates; Conduit Re becoming subject to income taxes in the United
States or in the United Kingdom; and changes in insurance or tax
laws or regulations in jurisdictions where Conduit Re conducts
business. Forward-looking statements contained in this trading
update may be impacted by the escalation or expansion of the
Ukraine conflict on Conduit Re's clients, the volatility in global
financial markets and governmental, regulatory and judicial
actions, including coverage issues.
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
Re 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 written" 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, after
management discount for prudence.
The Conduit Re renewal year on year indicative 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.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFFFSFLDLTIIF
(END) Dow Jones Newswires
November 09, 2022 02:00 ET (07:00 GMT)
Conduit (LSE:CRE)
과거 데이터 주식 차트
부터 6월(6) 2024 으로 7월(7) 2024
Conduit (LSE:CRE)
과거 데이터 주식 차트
부터 7월(7) 2023 으로 7월(7) 2024