CHL, the parent company of Conduit Re, a Bermuda-based multi-line reinsurance business, has released its trading update for the nine months ending September 30, 2024, reporting a rise in gross premiums and reinsurance revenue despite an active period for natural catastrophe losses.
Conduit Re reported gross premiums written of $957.3 million, marking a 25.2% increase compared to the same period in 2023. Reinsurance revenue reached $588.2 million, reflecting a 30.3% increase. The portfolio’s risk-adjusted rate change for the nine-month period was 1%, adjusted for claims inflation.
CEO Trevor Carvey (pictured right) said that the growth reflects continued expansion within the company’s capital base, supported by what he described as a strong market with adequate rates.
“We have seen an active quarter from an event perspective, notably natural catastrophe events across the US, Canada and the Caribbean, and as a well-diversified, predominantly quota share reinsurer we pick up our fair share of these, as we expect to do so. Looking forward and into 2025, we remain committed to risk selection and growing our business in a measured and balanced manner,” Carvey said.
Natural catastrophe and risk events were elevated during the third quarter, with an estimated undiscounted net loss of approximately $50 million, net of reinsurance and reinstatement premiums.
As of Sept. 30, the year-to-date undiscounted combined ratio stood in the mid-90s. Conduit Re maintains a high-quality investment portfolio with an average credit rating of AA and a duration of 2.5 years. As of Sept. 30, the book yield was 4.2%, with a market yield of 4.5%.
In October, Hurricane Milton made landfall in Florida, and while early estimates are still being assessed, Conduit Re expects its net losses from the storm to range between $30 million and $50 million, net of reinsurance and reinstatement premiums.
Carvey commented on the group’s forward outlook, emphasizing Conduit Re’s focus on risk selection and balanced growth.
Chief underwriting officer Gregory Roberts highlighted that, even with two months left in the year, the reinsurance sector has already seen considerable natural catastrophe and large loss events.
“Pricing conditions remain broadly stable and benefit from several years of compounding rate increases. As a trusted partner, our underwriting team engages with clients in what is a dynamic marketplace as we continue to grow while maintaining the balance of our overall portfolio,” Roberts said.
Conduit Re expects the market for property and specialty lines to present growth opportunities, with rates in loss-exposed sectors such as marine liability and civil unrest likely to respond positively to recent events.
The company’s single-location, streamlined structure allows it to quickly adapt to evolving market dynamics. Additionally, Conduit Re remains well-capitalized, positioned to allocate capacity to attractive classes during the upcoming renewals.
The company's loss and reserve estimates for the third quarter were based on data from brokers and cedants, as well as modelled loss projections and industry assumptions. While reserves have been set aside, there is continued uncertainty in ultimate loss estimates, and the company will update its estimates as further data becomes available.
Conduit Re’s ultimate loss estimates, net of ceded reinsurance and reinstatement premiums, for prior years’ loss events remain stable.
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