Conduit Re will expand its ILS activities over time, as it is “expected of our industry to not only look after your own shareholders, but to invite others in” as those third parties “really do add value”, according to Nick Pritchard, interim CUO.
Pritchard said the firm’s current ILS activity is “extremely accretive to what we do”, adding that the firm was “looking to build that over time”.
“Expect some further developments at some point,” he said.
Pritchard joined Conduit Re in an alternative capital role last September, moving from Aon in Bermuda, before taking on the interim CUO role after Greg Roberts’ departure in April.
Neil Eckert, who was named CEO of Conduit Re on a permanent basis today, added: “ILS is something we have always had in and around our strategy. It’s a relative trade, in terms of where we think we’re getting the best value, the best support, the best structure.”
The firm has in the past purchased retro coverage from the cat bond market through its Stabilitas Re transactions.
This came after London Stock Exchange-listed Conduit Re today released Q1 trading figures showing reinsurance revenue climbed 17.6% to $213mn in Q1 over the prior-year quarter.
Reinsurance revenue across the property segment was up 13.1% to $111.7mn, casualty grew 9.7% to $53mn and specialty rose by 42.1% to $48.3mn.
GWP was up by 15.0% to $410.2mn quarter over quarter, with growth across all segments. Property GWP grew by 9.6% to $237.9mn, casualty GWP was up 21.9% to $84.1mn and specialty GWP rose by 24.8% to $88.2mn.
The firm announced in March that it would be topping up its reinsurance for 2025 due to a $100mn-$140mn impact from the Los Angeles wildfires, reducing its 2025 return on equity expectation from low- to mid-teens to high single to low double digits.
In discussing its Q1 results, the carrier said it has since secured additional reinsurance for both US and global secondary perils, alongside increased aggregate cover.
The additional cover was introduced to mitigate earnings volatility rather than to accommodate increased exposure or growth ambitions.
As Eckert explained, the Bermudian purchased each-and-every-loss coverage for secondary perils and aggregate cover for the whole account. “It wasn’t about increasing capacity. It wasn’t capital protection,” he said.
“It was actually about secondary perils, frequency.”