Conduit Re claims 115% y/y Q1 GWP growth; focus on casualty & quota share

Upstart property, casualty and specialty reinsurer  Conduit Re continued to write new business at a hectic pace, pushing its young book towards better balance with continued drive into previously under-represented casualty lines.

Gross written premiums rose 115% year on year to $177.5 million, leading to an estimated ultimate written premium tally for Q1 of $297 million, a 49.1% year on year increase from the founding prior-year period, the Q1 trading statement indicated.

“ Conduit Re continued to show growth across all segments thanks to improving rates and, primarily, to new business,” management wrote in its Q1 trading statement. “Client count and submission numbers have increased in line with the Group's growth strategy.”

GWP growth proved strongest in casualty at 275.5% where  Conduit is playing catch-up to a stronger start in property. GWP in property rose 90% year on year to $84 million and still represents 47% of the new business written. Some 70% of  Conduit Re’s portfolio remains non nat cat, management claimed.

Rates on renewals rose by 4.9% net in what management said reflected a “plan to selectively grow our diversified portfolio.” Renewal rates grew 7.8% in property, 2.7% in casualty and 2.1% in specialty, still outpacing inflation, management said.

“Market conditions remain strong with continuing rate increases and improvements in terms and conditions,” management said of the environment.

Quota share increased as a portion of first quarter ultimate written premium by 6.3 percentage points to 67.6% of the whole in Q1 2022. Quota share of excess of loss treaties were pinched down.

“Pricing and terms and conditions continue to improve in our target markets, particularly at the primary level, hence the focus towards ground-up quota share,” management said.

Conduit Re booked $24.6 million in impact from Russia's invasion of Ukraine on an estimated ultimate loss range of $15 to $30 million after anticipated reinsurance recoveries and reinstatement premiums.

Management claims “confidence” in the estimate despite “significant uncertainty” in ongoing conditions given the “relatively small number of contracts” across property and specialty reinsurance books, via classes such as aviation, war on land and marine war.  Conduit Re does not underwrite trade credit or political risk, nor active in cyber, management said.

Conduit Re claimed to have built its reserve estimates on a combination of market data and ground-up assumptions, modelled loss projections, reports from cedants and market determination of loss events, tempered by “typical” treaty structures with event limits and aggregate caps.

Conduit Re further claimed “minimal” first quarter losses from natural catastrophe, but provided no numbers in its statement.

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