The allure of supporting the creation of a pure-play reinsurer from scratch is what drew Conduit Re’s chief risk and sustainability officer Andrew Smith (pictured) to join the business at its launch. An accountant by training, he served as a consultant with PwC and later EY in both London and Bermuda before joining Qatar Re – one of the companies he had supported in establishing their Bermuda base.
When Conduit Re first emerged on his radar, Smith liked that it was based in a single location, a trait that he’d come to appreciate after years in the market. Most of the time in Bermuda, you have a situation where companies have small teams on the ground. That could be in a head office or a satellite office, he said, but they also have substantial teams in other places such as London, Zurich or New York.
“There’s real strength in having everybody in one office, sharing the same experience and pointing in the same direction,” he said, and he believes it’s a structure that helps companies make decisions more quickly. The team at Conduit Re has grown rapidly since it completed its IPO in December 2020, now comprising 60 colleagues. Yet, while the business has had to take out additional office space, the team still work on the same floor in the interests of communication and collaboration.
“That single location was an important factor for me in deciding this was the right place to come to,” he said. “I like the environment we have in Bermuda where you can get an awful lot done very easily because it’s easy to access people, whether that’s the regulator, or brokers, or market experts. I think the rest of the world has changed a lot in the post-COVID world where you have so much more remote work.
“When I go to other places, they just don’t have the same buzz that they used to have. Whereas in Bermuda, despite a flexible working policy, everyone’s in the office pretty much all the time. Bermuda still has the piece that a lot of other places have lost, which is part of what makes it such an enjoyable place to work.”
Smith noted that another part of the appeal of joining Conduit Re – and a core element of its appeal in the reinsurance market – is its pure-play reinsurance model. From his perspective, he said, that means the partners the reinsurer does business with can afford to be very open and transparent, because Conduit Re is not going to try and use any of their information to compete with them on other business.
That’s been a key differentiator, he said, Particularly as other reinsurers have morphed into insurance players as well, something Conduit Re has no plans to do. The way Conduit Re is structured both operationally and geographically means the firm is founded on the principles of accessibility, transparency and rapidity of decision-making.
“In organisations that are more disparate, decision-making tends to happen in a different way,” he said. “Whereas I feel the way we make decisions is very integrated, clear and in most cases quick, which is something the market likes. Also, we came to the market at a time when there was a need for increased capacity. We were new capacity, with no legacy issues of any variety and an unencumbered balance sheet.
“Being a public company from day one takes away some of the noise that you might have if you’re PE-backed which invites questions about whether you’ll eventually IPO. So, when they’re looking to build a long-term relationship with a counterparty, other companies may face questions about timelines and objectives and how those will change over time. With us, we’re not faced with those distractions and we can focus on building a sustainable long-term business.”
Conduit Re launched with a clean slate, unencumbered with the legacy platform concerns weighing down many other market players, particularly in the context of how rapidly technology has advanced in recent years. Being able to go to market with the latest technology and clean data has been a huge benefit, which was evidenced this year during the transition of IFRS-17.
Moving to the new standard was a different beast for Conduit Re, he said, because it was able to avoid using any of the black box solutions that companies with significant legacy systems had to use. Conduit Re’s systems are straightforward and well understood, having been built by the team. Conduit Re was able to enter, trace and work the data right the way through its systems – which serves as a broader reflection of the transparent approach the business looks to take to data and outcomes.
As to what’s next for Conduit Re, Smith highlighted that its key theme for 2024 is one of continuing its present momentum and building on the backdrop of a successful 2023. 2021 and 2022 were also strong years for the business, he said, albeit tempered by elevated losses in the wider market, but 2023 was the year that Conduit Re really started to see its hard work pay off, evidenced by its comprehensive income of $190.8 million, a very strong pipeline of unearned premium, and strong growth in gross premiums written.
“2023 was a very good year,” he said. “We’ve built a strong platform and we’re operating well, so our focus is on building on that up further and making sure we capitalise on that momentum. That’s the key for this year.”
