New reinsurer Conduit joins London market with £826m fundraise through IPO

Conduit Holdings, a new property and casualty (P&C) and specialty reinsurance underwriting business, has started trading in the London market with a £826 million (approximately $1.1 billion) initial public offering (IPO), said to be the largest ever start-up IPO on the London Stock Exchange (LSE).

Conduit raised its targeted capital based on the offer price of 500 pence per share.

The start-up will begin writing business on January 1. Conduit expects to write reinsurance in the property, casualty and specialty classes, and is targeting a dividend payout of 5 percent to 6 percent of equity capital in 2021.

The company will operate as a Bermudian reinsurer with a class IV license issued by the Bermuda Monetary Authority.

Insurance executives Neil Eckert and Trevor Carvey have formed Conduit to capitalise on what they believe to be an "exceptional market opportunity". The company plans to build a strong underwriting franchise focusing on strong risk adjusted returns and a balanced approach to catastrophe risk exposures.

Ratings agency AM Best has assigned a preliminary financial strength assessment of A- to Conduit Re.

Eckert said: “We are delighted that Conduit’s business proposition has been strongly received by a group of high-quality investors. Business conditions in our targeted reinsurance markets have continued to improve during our journey to IPO and we now move on to the launch of the business with confidence.”

Carvey added: “Conduit is well set for a successful launch and we have been positively received across the reinsurance community. We may be a new company but our team has many decades of underwriting experience trading across multiple market cycles, and I am excited to lead a legacy free business into these exceptional market conditions.”