CHL, the parent company of Bermuda-based reinsurance firm Conduit Re, has released its preliminary financial results for the year ending Dec. 31, 2024.
The company reported growth in gross premiums written (GPW) and net reinsurance revenue but experienced a decline in its reinsurance service result and comprehensive income.
Gross premiums written increased by 24.8% to US$1.16 billion, up from US$931.4 million in 2023. Reinsurance revenue rose 28.5% to US$813.7 million, while net reinsurance revenue climbed 29.4% to US$720 million.
The reinsurance service result fell 28.3% to US$131.6 million, while comprehensive income declined 34.2% to US$125.6 million.
It is worth noting that reinsurance revenue in the third quarter of the same year reached US$588.2 million, which is a 30.3% increase. GPW in the period also reached US$957 million, 25.2% higher than the same period in 2023.
The company also acknowledged the recent wildfires in California, with Trevor Carvey (pictured above), chief executive officer, noting that it represented a significant industry loss, impacting both communities and insurers, including Conduit Re.
He noted that the wildfires are expected to influence property portfolio rates, leading to an improved underwriting environment and potential opportunities for the company.
While acknowledging that a major event has already occurred early in the year, he said that the company's current forecast anticipates a return on equity in the low to mid-teens for 2025, assuming normal loss activity and investment performance.
CHL said that it expects the financial impact from the California wildfires to be reflected in the interim results for the half year ending June 30, 2025.
For the full year 2024, the company saw a risk-adjusted rate increase of 1%, net of claims inflation, in what it described as an attractive market.
The discounted combined ratio stood at 86.0%, compared to 72.1% in 2023, reflecting a year with high catastrophe losses, including Hurricanes Helene and Milton and other elevated risk losses.
Operating leverage improved, with the total reinsurance and other operating expense ratio decreasing to 12.7% from 13.9% in 2023. Net investment income reached US$65 million, representing a 57.4% increase from the previous year. The company reported a 12.7% return on equity despite the high catastrophe year.
A final dividend of US$0.18 per common share, approximately 14 pence, was declared, bringing the full-year 2024 dividend to US$0.36 per share, or approximately 28 pence, in line with the company’s dividend policy.
Tangible net assets per share stood at US$6.70 as of Dec. 31, 2024, reflecting a 12.9% increase, including dividends paid during the year.
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