Conduit Holdings Limited First Quarter 2022 Trading Update
Conduit Holdings Limited ("CHL" or "Conduit Re") (Ticker:CRE)
Pembroke, Bermuda - 11 May 2022
CHL is today presenting its trading update for the first quarter of 2022.
"Our position as a pure-play reinsurer, with a strong balance sheet and no legacy, allows the team to take advantage of the best market conditions for a decade.
Neil Eckert Group Executive Chairman
As the discipline in primary markets continues, Trevor and his team are successfully executing the strategy put forward in the IPO plans and our earned premium recognition is building."
Key highlights of the first quarter:
|
|
2022 $m |
2021 $m |
Year on year change % |
|
Estimated ultimate premiums written |
296.9 |
199.1 |
49.1 |
|
Gross premiums written |
177.5 |
82.6 |
114.9 |
• Continued build of a high quality reinsurance franchise
• Market conditions remain strong with continuing rate increases and improvements in terms and conditions
• Diversified and balanced portfolio growth with a renewal net rate change of 4.9%
• Net ultimate incurred losses related to the Russian invasion of Ukraine are estimated at between $15.0 million and $30.0 million, with net impact for the first quarter of $24.6 million, after reinsurance and reinstatement premiums, predominantly driven by the classes of aviation, war on land and marine war
• Investment return at (2.9)% driven by unrealised losses of $32.6 million from increase in yields due to interest rate hike expectations; conservative approach to invested assets maintained
• Final dividend of 18c (approximately 14p) per common share (in respect of the second half of 2021) paid in the second quarter of 2022
"The first quarter of 2022 has seen significant year-on-year growth as we execute on our plan to selectively grow our diversified portfolio. We continue to enjoy the benefits of strong reinsurance market conditions and the continuing excellent support from our clients and brokers.
Trevor Carvey Group Chief Executive Officer
Turning to the situation in Ukraine, we have estimated the ultimate potential losses for the first quarter derived primarily from our property and specialty books via classes such as aviation, war on land and marine war. Given the typical structure of the reinsurance treaty contracts that we underwrite, with event and aggregate limitations in place, we have been able to arrive at a loss estimate for the relatively small number of contracts we write across these classes for Ukraine and Russia, and this gives us confidence in our estimate at this time."
Business update
During the first quarter of 2022, Conduit Re continued to show growth across all segments thanks to improving rates and, primarily, to new business. Client count and submission numbers have increased in line with the Group's growth strategy. Rate change continues to be positive, outpacing inflation.
Underwriting activities
Our estimated ultimate premiums written for the three months ended 31 March 2022 and 31 March 2021 were as follows:
|
Segment |
2022 $m |
% of total |
2021 $m |
% of total |
Year on year change % |
|
Property |
120.8 |
40.7% |
85.7 |
43.1% |
41.0% |
|
Casualty |
99.0 |
33.3% |
60.6 |
30.4% |
63.4% |
|
Specialty |
77.1 |
26.0% |
52.8 |
26.5% |
46.0% |
|
Total |
296.9 |
100.0% |
199.1 |
100.0% |
49.1% |
Our gross premiums written for the three months ended 31 March 2022 and 31 March 2021 were as follows:
|
Segment |
2022 $m |
% of total |
2021 $m |
% of total |
Year on year change % |
|
Property |
83.8 |
47.2% |
44.2 |
53.5% |
89.6% |
|
Casualty |
59.7 |
33.6% |
15.9 |
19.3% |
275.5% |
|
Specialty |
34.0 |
19.2% |
22.5 |
27.2% |
51.1% |
|
Total |
177.5 |
100.0% |
82.6 |
100.0% |
114.9% |