Trading update and further key hires
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Conduit Holdings Limited ("Conduit Holdings")
Conduit Reinsurance Limited ("Conduit Re")
Hamilton, Bermuda - 14 January 2021
Trading update and further key hires
Conduit Holdings today announces the following shareholder update:
1st January renewal season
The highlights of the 1st January 2021 renewal season for Conduit Holdings' main operating subsidiary Conduit Re are as follows:
Gross Written Premium of c$160 million being in line with our plan and consisting of a targeted series of January attaching contracts;
Specific focus on key quota share contracts to deliver a balanced start to our trading;
Pricing and terms and conditions in line with management expectations;
Conduit Re benefited from management's relationships with leading reinsurance broking intermediaries, delivering on the intended mix of business and diversification;
Brokers and clients welcomed a new, professional reinsurance carrier with a strong and unencumbered balance sheet;
Formal trading agreements now established with 12 of the world's leading reinsurance broking firms;
Conduit Re's own initial catastrophe reinsurance programme has been successfully placed within plan with further purchases expected during the year as the account develops.
2021 financial year
Following a strong start, we go into the 2021 financial year with confidence:
Senior underwriting team now complete;
Quota share contracts are expected to represent over half our written premium in 2021, allowing us to access ground-up rate rises in the direct insurance market in our targeted classes;
Market conditions continue to show improvements across our targeted property, specialty and casualty lines;
In its IPO prospectus, Conduit Holdings stated that it would be targeting a dividend as early as during the 2021 financial year of approximately 5 to 6 per cent of equity capital, allocated between an interim and final distribution. Conduit Holdings reaffirms its intention to pay a dividend at these levels for the 2021 financial year;
A further update and the 2020 year-end financial statements will be released in late February 2021. Our 2021 interim results are due for publication in late July 2021.
Further key hires
We are also delighted to announce that Elaine Whelan has joined as Chief Financial Officer and director, a significant hire which broadens and adds a depth of experience to the finance function of Conduit. Elaine replaces Mark Heintzman, who has left the company.
Also, Angus Hampton will be joining as Head of International Casualty, which completes our senior underwriting team as set out in our Prospectus.
Neil Eckert, Executive Chairman, said, "Conduit Re is off to a strong start and we are on track to deliver on the business plan we set out to our IPO investors in December. The hiring of Elaine is obviously a major step for the business and she brings enormous experience from her previous role at Lancashire where she was CFO for nine years. She replaces Mark Heintzman, who has done a very good job in helping take Conduit Re through all of the milestones in its start-up phase. We would like to extend our deepest thanks to Mark for his contribution."
Trevor Carvey, CEO and Chief Underwriting Officer, said, "We are very pleased with our first renewal season's trading which has met our expectations and we believe addresses any concerns that may have been raised over our ability to gain traction in the market in a responsible manner. We have been extremely well supported by brokers, clients and our reinsurers and we look forward to continuing to execute on our business plan through the rest of the year. In addition, I'm delighted to welcome Angus Hampton to Conduit Re to lead our International Casualty business which completes our senior underwriting team."
Media: David Haggie, Caroline Klein, Haggie Partners
+44 (0) 207 562 4444
Other: [email protected]
Further details of the Conduit Group can be found at its website: https://conduitreinsurance.com/
Notes to Editors
Elaine is a highly accomplished and experienced public company CFO who has worked in the insurance industry for over 20 years. She is a member of The Institute of Chartered Accountants of Scotland, a member of The Institute of Chartered Accountants of Bermuda and a member of The Institute of Directors.
Elaine joined PwC in Bermuda in 1997. From 2001 to 2006 she held a number of positions at Zurich Insurance Company, Bermuda Branch, ending up as Chief Accounting Officer. In 2006 she joined the Lancashire Group as Financial Controller. She subsequently performed various financial and management roles for the Lancashire Group, including as CEO, Lancashire Insurance Company Limited. From January 2011 to February 2020 Elaine was Group CFO, Lancashire Holdings Limited, and she was also a main board director from 2013 to February 2020.
Elaine will be responsible for all aspects of Conduit Re's financial management and reporting and will sit as an executive director on the boards of Conduit Holdings Limited and Conduit Reinsurance Limited.
Angus is a highly regarded international casualty and specialty treaty reinsurance specialist with a successful underwriting track record. He started his career in 2012 as a graduate trainee at Ascot Underwriting where he learned his trade as an assistant casualty treaty underwriter with some of the best in the business. He then joined Liberty Mutual as a senior casualty treaty underwriter. At Conduit Re, Angus will be responsible for building and managing our international casualty and long tail specialty underwriting activities where he will work alongside Erik Soria and Marc Bearman in building and managing our overall risk portfolio.
*Application has been made to the Bermuda Government for work permit approval
About Conduit Re
Conduit Re is a newly established reinsurance underwriting business focusing on producing strong risk-adjusted returns from a diversified and focused business plan. The business has been formed to capitalise on what the Company's founders, Neil Eckert and Trevor Carvey (the "Founders") believe to be an exceptional market opportunity.
Conduit Re writes reinsurance in the property, casualty and specialty classes. Years of high insured losses, diminished reserves and the more recent losses and industry strain caused by Covid-19 and severe capacity shortages in certain classes of insurance and reinsurance have produced major corrections in reinsurance pricing and policy Terms & Conditions.
Against the industry background of losses, litigation and capacity constraint, as a new business, Conduit has no legacy exposure and its strong and unencumbered balance sheet is available to write new business in what the Founders believe to be an attractive market environment.
Conduit Re is led by two highly successful, experienced and networked industry executives, Neil Eckert and Trevor Carvey.
Conduit Re has been established to build a strong underwriting franchise which will target strong cross-cycle returns on equity in the mid-teens. The business plan has a balanced approach to catastrophe risk exposures, generating profit and franchise value through the quality of its underwriting and its select portfolio of high quality business.
Conduit Re expects to generate significant returns for its shareholders and to provide an ongoing and progressive dividend. The Company is targeting a dividend as soon as during the 2021 financial year of approximately 5% - 6% of equity capital, allocated between an interim and final distribution. Conduit will manage its balance sheet efficiently and in the long term may return excess capital through special dividends or share buybacks where appropriate.
Following years of de-listings, in weak industry conditions and upon industry consolidation, Conduit Re offers investors the opportunity to take advantage of prevailing, highly positive industry conditions through investment in a listed business which is legacy free and focused only on reinsurance.
Conduit Re believes that sound ESG principles should be strongly embedded across the business and that this promotes better risk management, innovation, sustainable outperformance and positive community engagement. Conduit Re intends to be a carbon neutral business. Conduit Re will target a Net-Zero position through a combination of sound business practices and strategically chosen offset initiatives.
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.
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", "may", "will" 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 may and often do differ materially from actual results. Any forward-looking statements reflect Conduit'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 the Conduit Group'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. Conduit 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 the Financial Services and Markets Act 2000, the Listing Rules or Prospectus Regulation Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.