TIDMCRE
RNS Number : 4572Y
Conduit Holdings Limited
13 May 2021
Conduit Holdings Limited ("CHL" or "Conduit Re"), CRE
Hamilton, Bermuda - 13 May 2021
Trading Statement - Q1 2021
CHL is today presenting its trading statement for the three
months ended 31 March 2021.
Key highlights:
-- Successful initial quarter of trading with strong broker and client support;
-- Estimated ultimate premiums written of $199.1 million versus
approximately $160.0 million announced in our 14 January 2021
trading statement;
-- Gross premiums written of $82.6 million;
-- Estimated loss from Winter Storm Uri is minimal with a net
incurred loss of $6.0 million, including the impact of
reinstatement premiums;
-- Industry-leading investment managers appointed to manage our invested assets;
-- Continued build-out of underwriting portfolio and development of teams and technology.
Neil Eckert, Group Executive Chairman, commented:
"There appears to be rating discipline in primary markets that
is not necessarily born out of capital constraints, but from the
results the market has experienced over the last few years and the
perceived need for fundamental improvement in pricing. We expect to
see this trend continuing. We are well positioned, with our
legacy-free balance sheet, to take advantage of these attractive
market conditions."
Trevor Carvey, Group Chief Executive Officer, commented:
"We continue to make good progress and remain on track across
all operational areas of the Group. Our underwriting teams moved
straight on from 1 January business and have continued to enjoy
outstanding support and approval from both brokers and customers
alike. The dual forces of rate and market sentiment are still
pushing strongly in our classes, which further strengthens our
opinion - expressed at the time of the IPO - that the rising tide
would be lifting many boats across the industry."
Underwriting activities:
Given the start-up nature of the business and the higher
proportion of quota share business in our book, we are presenting
both estimated ultimate and gross premiums written:
Segment Estimated ultimate premiums Percentage of total Gross premiums written $m Percentage of total
written $m
Property 85.7 43% 44.2 54%
Casualty 60.6 30% 15.9 19%
Specialty 52.8 27% 22.5 27%
--------------------------------- --------------------------
Total 199.1 82.6
================================= ==========================
In Q1, Conduit Re bound contracts with total expected ultimate
premiums written of $199.1 million, marginally ahead of the
business plan presented in our IPO Prospectus. While we wrote more
than plan, we also wrote a higher proportion of quota share
business than plan and therefore there will be a lag in the
accounting recognition of gross written and earned premiums.
Pricing
Q1 2021 saw further momentum in both pricing and terms and
conditions in most markets we are targeting, particularly at the
primary level. We have initiated our own renewal year on year
pricing change measures which we intend to publish on a quarterly
basis. For Q1 2021 these were: Property +12%; Casualty +14%;
Specialty +8%.
Claims
Our exposure to the Winter Storm Uri event is relatively small
and the financial impact would not typically be considered material
to Conduit Re. Our net aggregate loss recorded in relation to
Winter Storm Uri, including the impact of reinstatement premiums,
is estimated to be $6.0 million. However, with a lack of reported
claims to date, there is a degree of uncertainty around an early
loss estimate such as this. We will continue to keep the estimate
under review as more detailed information becomes available.
Investments
During Q1 2021, we have appointed three industry leading third
party investment managers to manage our invested assets. Funding of
the portfolios commenced in April and, as a result, we have avoided
much of the market volatility that occurred in the quarter. We
expect full deployment of our funds by 30 June 2021. Our investment
guidelines are in line with the strategy communicated in our IPO
Prospectus, which is to pursue a low risk approach with a view to
protecting our solvency capital.
Operations
The development of Conduit Re's technology platform and
recruitment of the wider Conduit Re team is ongoing and in line
with our plan and expectations.
Outlook
Conduit Re has had a successful first trading quarter and we
have laid the foundations that we set out in our IPO Prospectus.
The market continues to develop very much in line with our
expectations and we remain confident that we will deliver on our
plan.
Conference Call & Presentation
As announced on 6 May 2021, CHL will be hosting an analyst and
investor conference call at 12:00 noon UK time / 8:00 am Bermuda
time on Thursday 13 May 2021.
An archive of the conference call will be available together
with the presentation slides through the Investors section of CHL's
website at www.conduitreinsurance.com from approximately 4:00 p.m.
BST on 13 May 2021, through midnight BST on 13 June 2021.
-END-
Media contacts
Haggie Partners - David Haggie, Caroline Klein
+44 (0) 207 562 4444
conduitre@haggie.co.uk
Investor relations and other enquiries:
info@conduitreinsurance.com
About Conduit Re
Conduit Re is a pure play global reinsurance business based in
Bermuda. Its main operating subsidiary Conduit Reinsurance Limited,
is licensed by the Bermuda Monetary Authority as a Class 4
reinsurer. A.M. Best has assigned a Financial Strength Rating of A-
(Excellent) and a Long-Term Issuer Credit Rating of "a-" to Conduit
Reinsurance Limited. The outlook assigned to these Credit Ratings
(ratings) is stable.
Learn more about Conduit Re:
Website: https://conduitreinsurance.com/
LinkedIn: https://www.linkedin.com/company/conduit-re
Twitter: https://twitter.com/Conduit_Re
Important Information
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements may be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "plans",
"projects", "anticipates", "expects", "intends", "estimates",
"may", "will", "aims", "could" or "should" or, in each case, their
negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or
intentions. Forward-looking statements include statements relating
to the following: (i) future capital expenditures, expenses,
revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses and future prospects;
and (ii) business and management strategies and the expansion and
growth of Conduit Re's operations. Forward looking statements may
and often do differ materially from actual results. Any
forward-looking statements reflect Conduit Re's current view with
respect to future events and are subject to risks relating to
future events and other risks, uncertainties and assumptions
relating to Conduit Re's business, results of operations, financial
position, liquidity, prospects, growth and strategies. Forward
looking statements speak only as of the date they are made. No
representation or warranty is made that any forward-looking
statement will come to pass. These forward-looking statements speak
only as at the date of this announcement. CHL disclaims any
obligation or undertaking to update or revise any forward-looking
statements contained herein to reflect actual results or any change
in the assumptions, conditions or circumstances on which any such
statements are based unless required to do so by law or
regulation.
The Conduit Re renewal year on year pricing change measure is an
internal methodology that management intends to use to track trends
in premium rates of a portfolio of reinsurance contracts. The
change measure reflects management's assessment of relative changes
in price, terms, conditions and limits. The calculation involves a
degree of judgement in relation to comparability of contracts and
the assessment noted above, particularly in Conduit Re's initial
years of underwriting. To enhance the methodology, management may
revise the methodology and assumptions underlying the change
measure, so the trends in premium rates reflected in the change
measure may not be comparable over time. Consideration is only
given to renewals of a comparable nature so it does not reflect
every contract in the portfolio of Conduit Re contracts. The future
profitability of the portfolio of contracts within the change
measure is dependent upon many factors besides the trends in
premium rates.
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END
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