Conduit Re grows 60% at 1.1 on 19% rate gain, sees ‘structural shift’ in market
Conduit Re secured 60% growth in estimated ultimate premiums written to $421.4 million at the January renewals on a 19% risk-adjusted rate change net of inflation across the portfolio, including a 39% jump for property.
“Extremely strong property and specialty market conditions provided the opportunity to grow those classes more,” Conduit said.
January renewals show “a structural shift” in the market stemming from “a fundamental re-pricing of risk and an imbalance in the supply and demand of capital.”
“We see this as an enduring environment creating the opportunity for improved margins across the rest of 2023 and beyond,” management said in a presentation ahead of an afternoon conference call.
Conduit Re has “plenty of room to execute our plan and the growth we anticipate,” CEO Trevor Carvey (pictured) added in a statement.
The expanded property book will deliver an 81% year on year gain in premium, rendering a 6-percentage point increase in its weight in the portfolio to 47%.
In specialty, Conduit rode a 14% risk-adjusted rate change to a 65% increase in estimated premium, enough to keep the segment flat at a 26% share of the Conduit Re portfolio.
Casualty lines moved more modestly, with Conduit claiming a 1% increase in risk-adjusted rate. Management cited "continued selective growth" among "attractive underwriting opportunities." The premiums estimate is up 31% year on year to fall to 27% of total, down 6 percentage points from a year ago.
Conduit claims to have expanded its retrocession provider panel to "successfully secure our retrocession programme in line with our objectives," chief underwriting officer Gregory Roberts added.
The sum of "exceptional" pricing, "significantly enhanced" terms and conditions and reduced acquisition costs on renewed business puts the group on trend towards a mid-80's combined ratio in the medium term, management claimed.
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