Reinsurer Conduit Re sees underwriting business surge as clean balance sheet offers ‘tremendous freedom’

Pure-play reinsurance firm Conduit Re has reported a surge in business underwritten for 2023 and said its strong balance sheet offers “tremendous freedom.”

The news sent shares up five per cent to their highest level in seven months on Wednesday morning.

The London-listed company, based in Bermuda, saw a comprehensive income of $191m (£151m) for the full year, representing a 22 per cent return on equity.

Conduit Re posted a 50 per cent jump in gross premiums written to $931m (£737m) between 2022 and 2023, with a combined ratio of 72 per cent.

The firm reported strong investment performance, especially in the final quarter of 2023, with its net investment results swinging into the black at $71m (£56m), compared to a loss of £53m in 2022.

Conduit Re’s chief executive Trevor Carvey said: “Across all three divisions, the underwriting teams navigated the market well, being focused in choosing their preferred spaces to play and allocating our capacity to those where we saw the best opportunities and returns.

“We continue to benefit from a lack of legacy issues and our clean balance sheet has given us tremendous freedom to deploy exactly where we wish to.”

Looking forward, Conduit Re expected ultimate premiums written to rise 38 per cent to $582m (£461m) in 2024.

Carvey said: “Entering our fourth year, we continue to deliver on our plans and the market landscape out there is offering up plenty of good opportunities for continued growth.”

Broker Panmure Gordon raised its price target on Conduit Re’s stock to 630p from 615p.

Analyst Abid Hussain added: “Management beat expectations on earnings despite already having flagged strong performance in a recent unscheduled trading update.

“The reinsurance market conditions have clearly been excellent over 2023 and 2024 started out with compound price increases on a book that has already benefited from significant price rises.”